Footwear stocks plunge 20% due to valuation gaps and weak demand

Footwear stocks have been struggling to gain momentum on Dalal Street despite front-line indices reaching record highs. Leading the downturn, Khadim India saw a 20 percent drop over the past month, followed by Liberty Shoes with a 17.3 percent slump. Shares of Campus Activewear, Metro Brands, and others also fell by 14 percent, 13 percent, and 12 percent respectively, while Relaxo Footwear and Bata India experienced corrections of approximately 8 percent each.

Many stocks in the sector have experienced these sharp declines as investors reacted to disappointing June quarter results, which missed analysts' expectations. Various factors, including elections, fewer weddings, heatwaves, and a shift in consumer spending, have influenced this downturn. In response to the weak performance, analysts have downgraded their earnings forecasts, further exacerbating the sell-off. Additionally, high valuations have led some investors to take profits, contributing to the further slump in stock values as the sector awaits a revival in demand.