💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment (Footwear and Leather). Revenue from operations for H1 FY26 reached INR 124.81 Cr, representing a 12.08% YoY growth compared to INR 111.36 Cr in H1 FY25. Q2 FY26 revenue was INR 74.77 Cr, up 19.33% from INR 62.66 Cr in Q2 FY25.

Geographic Revenue Split

Not disclosed in available documents; however, the company is headquartered in Kolkata, West Bengal, which serves as its primary operational hub.

Profitability Margins

Net Profit Margin for FY25 was 10.26%, a decline from 12.33% in FY24. Operating Profit Margin also decreased to 14.70% in FY25 from 16.98% in FY24, indicating rising operational costs or pricing pressures in the retail footwear market.

EBITDA Margin

Operating Profit Margin stood at 14.70% for FY25, reflecting a 13.43% YoY decrease from 16.98%. This compression suggests that while sales are 'satisfactory,' the cost of goods sold or administrative overheads are growing faster than top-line revenue.

Capital Expenditure

Total Property, Plant, and Equipment (including Right of Use Assets) was valued at INR 148.84 Cr as of September 30, 2025, compared to INR 149.27 Cr in March 2025, suggesting minimal new net CapEx during the half-year period.

Credit Rating & Borrowing

The company maintains a very low Debt-Equity Ratio of 0.01 (with leases considered as debt). Interest Coverage Ratio improved to 143.01 in FY25 from 123.28 in FY24, indicating extremely high capacity to meet interest obligations from earnings.

⚙️ Operational Drivers

Raw Materials

Leather, rubber, and synthetic materials used for footwear and accessories. Specific percentage of total cost for each material is not disclosed.

Import Sources

Not specifically disclosed in the documents, though the company notes that availability and pricing of raw materials are crucial factors for operational stability.

Capacity Expansion

Not disclosed in available documents; however, the company maintains a significant asset base with Property, Plant, and Equipment valued at INR 148.84 Cr.

Raw Material Costs

Raw material costs are a 'crucial factor' impacting operations. While specific YoY % changes for procurement are not listed, the decline in Net Profit Margin from 12.33% to 10.26% suggests higher input or procurement costs.

📈 Strategic Growth

Expected Growth Rate

12%

Growth Strategy

Growth is driven by maintaining 'satisfactory' sales performance and leveraging a strong balance sheet with INR 473.89 Cr in equity. The strategy involves managing cyclical demand trends and focusing on society-centric contributions (CSR) to build brand equity, alongside maintaining a nearly debt-free status to allow for flexible capital allocation.

Products & Services

Footwear (shoes, sandals), leather bags, belts, and other leather accessories.

Brand Portfolio

Sreeleathers

🌍 External Factors

Industry Trends

The industry is subject to cyclical demand and pricing trends. The company is positioning itself by maintaining high liquidity, with Current Assets of INR 343.28 Cr as of September 2025, to navigate market fluctuations.

Competitive Landscape

The company faces competition in the primary footwear markets, evidenced by the pressure on margins (Net Profit Margin down to 10.26%).

Competitive Moat

The company's moat is built on its strong brand recognition in the leather footwear segment and a robust, debt-free balance sheet (Debt-Equity 0.01), which provides a significant margin of safety against industry downturns.

Macro Economic Sensitivity

Highly sensitive to economic developments in India and changes in consumer spending patterns, as footwear is a consumer-discretionary item.

Consumer Behavior

Demand is cyclical, meaning revenue is likely tied to festive seasons and wedding periods in India.

⚖️ Regulatory & Governance

Industry Regulations

Operations are impacted by alterations in government regulations and tax regimes related to the leather and footwear industry.

Taxation Policy Impact

The company is subject to Indian corporate tax laws and GST regimes. Current Tax Assets stood at INR 0.33 Lakhs as of September 2025.

Legal Contingencies

The company has disclosed the impact of pending litigation on its financial position as of March 31, 2025, though specific case values were not detailed in the summary.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility and cyclical demand are the primary risks. A 25% or greater change in key ratios like Inventory Turnover (which increased 27.83%) indicates potential risks in working capital efficiency.

Geographic Concentration Risk

Not disclosed, but likely concentrated in Eastern India based on the Kolkata headquarters.

Third Party Dependencies

Dependency on raw material suppliers is noted as a 'crucial factor,' though no specific vendor names are provided.

Technology Obsolescence Risk

The company uses accounting software with database-level logging to prevent unauthorized data changes, indicating a focus on digital integrity for financial reporting.

Credit & Counterparty Risk

Trade receivables are low at INR 77.88 Lakhs (Sept 2025) compared to revenue, indicating a primarily cash-and-carry retail model with low credit risk. Debtors to Sales ratio is only 0.68 days.