MIRZAINT - Mirza Internatio

📊 NSE: MIRZAINT 🏢 Leather / Leather Products 📅 Last Updated: 12/14/2025 9:53

💰 Financial Performance

Revenue Growth by Segment

Overall revenue declined 7.8% YoY from INR 630.36 Cr in FY24 to INR 581.23 Cr in FY25. In Q1FY25, the footwear segment (77% of revenue) grew 14% YoY, while the tannery business (23% of revenue) grew 8% YoY.

Geographic Revenue Split

Exports account for approximately 85-86% of total revenue. The UK and US markets are the primary regions, together constituting ~70% of total revenue in FY24.

Profitability Margins

Operating margins have seen a steady decline from 10.2% in FY23 to 7.7% in FY24, and further to 6.6% in the first nine months of FY25. The company reported a Profit Before Tax (PBT) loss of INR 3.55 Cr in FY25 compared to a PBT of INR 16.60 Cr in FY24.

EBITDA Margin

Operating margin stood at 7.7% in FY24, a decline from 10.2% in FY23. The margin further compressed to 6.6% in 9M FY25 due to operating deleverage and increased freight costs.

Capital Expenditure

The company maintains a regular annual maintenance capex of INR 10-15 Cr (some reports suggest INR 15-20 Cr), which is entirely funded through internal cash accruals of INR 45-55 Cr.

Credit Rating & Borrowing

Ratings reaffirmed at [ICRA]A- (Stable) and [CRISIL]A- (Negative). Interest coverage ratio is estimated at 4.1x for FY25, down from 4.79x previously. Working capital limits of INR 120-185 Cr are utilized at an average of 42%.

⚙️ Operational Drivers

Raw Materials

Cow hide and finished leather are the primary raw materials. Raw material costs (Cost of Materials Consumed) were INR 254.25 Cr in FY25, representing 43.7% of total revenue.

Import Sources

Cow hide is specifically imported as it is not available in India; specific countries are not named but the company relies on global sourcing for ~85% of its business needs.

Capacity Expansion

Current focus is on improving utilization rather than expansion; the tannery business is currently making losses due to low utilization of its large plant capacity.

Raw Material Costs

Raw material costs decreased 5.1% YoY from INR 267.85 Cr in FY24 to INR 254.25 Cr in FY25. Stabilization in leather prices in Q1FY25 has started to improve gross margins.

Manufacturing Efficiency

Manufacturing efficiency is currently hampered by low capacity utilization in the tannery division, leading to operating deleverage where fixed costs like employee benefits (INR 86.27 Cr) remain high despite lower revenue.

Logistics & Distribution

Freight costs increased significantly due to geopolitical issues in the Red Sea, contributing to the 110 bps decline in operating margins during FY25.

📈 Strategic Growth

Expected Growth Rate

6.7-6.8%

Growth Strategy

Growth will be driven by increasing online sales of owned brands and targeting large-scale orders from 'big customers.' The company currently holds an order book of INR 260-270 Cr to be executed within 5-6 months.

Products & Services

The company manufactures and sells leather footwear (shoes) and finished leather.

Brand Portfolio

Thomas Crick, Off The Hook London, and Oaktrak.

New Products/Services

Focus is shifting toward synthetic leather shoes to counter competition, though specific revenue contribution percentages for new launches are not disclosed.

Market Expansion

Expansion is focused on digital channels and online sales for private label brands in the international market.

Strategic Alliances

The company operates through subsidiaries including RTS Fashion Limited (Dubai) and Mirza (UK) Limited to manage international distribution.

🌍 External Factors

Industry Trends

The industry is shifting toward synthetic leather footwear; Mirza is adapting by focusing on online brand presence and cost efficiency to counter 4% YoY degrowth in the export market.

Competitive Landscape

Faces intense competition from low-cost manufacturing hubs like China and Bangladesh and the rising popularity of synthetic footwear brands.

Competitive Moat

Moat is based on integrated operations (tannery to footwear) and established private labels like Thomas Crick. However, this is challenged by the global shift toward non-leather alternatives.

Macro Economic Sensitivity

Highly sensitive to global consumer spending power, particularly in the UK and US, and fluctuations in global leather commodity prices.

Consumer Behavior

Shift in consumer preference toward synthetic/vegan leather and online shopping is forcing a change in the company's distribution and product strategy.

Geopolitical Risks

The Red Sea crisis is a primary risk, increasing logistics costs and transit times for exports to Western markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental norms for tanneries and international trade regulations for footwear exports to the UK and US.

Taxation Policy Impact

The company recognized a deferred tax income of INR 57 Lakh in FY25 compared to a tax expense of INR 42 Lakh in FY24.

Legal Contingencies

The company has outstanding liabilities for employee benefits of INR 26.80 Lakh and export expenses payable of INR 33.95 Lakh as of March 31, 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the duration of the export demand slowdown in Europe and the US, which could keep operating margins below the 8% threshold.