Established in 1981, Khadim Indian Ltd (KIL), a leading footwear brand has
emerged as the third largest retailer in the Indian market. The company has
a strong presence in eastern India and has positioned itself as an affordable
brand. It has 853 branded exclusive retail stores in 23 states and one Union
Territory. KIL has manufacturing facilities at Panpur and Kasba (in West
Bengal) and 4 distribution centers across India.
Outlook & Valuation: In terms of valuations, the pre-issue P/E works out to 42.2x
its FY2017 earnings (at the upper end of the issue price band), which is slightly
lower compared to its peers like Bata. However, Bata has strong presence across
India with well-established brand and its entire revenue comes from retail
business. On other hand, KIL’s most of the revenue comes from East geography
mainly from Kolkata and retail revenue is only 70% and balance from distribution
Despite the above positives factors and lower valuations compared to Bata, we
however, believe that the current valuation for this company is fully factored in the
price, which doesn’t provide further upside for investors. Hence, we recommend
Neutral rating on the issue.

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