Indian footwear stocks stumble as polls, heatwaves and spending shifts hit sales

Indian footwear brands have seen their share prices tumble over the past month, with some major brands losing as much as a fifth of their market value. Despite India’s broader stock market indices reaching record highs, the footwear sector has bucked the trend as investors react to a disappointing June quarter that missed analyst expectations.

The sell-off has been led by Khadim India, which saw a 20 per cent drop in its share price, while Liberty Shoes fell by seventeen point three per cent. Other significant declines were recorded by Campus Activewear, down fourteen per cent, and Metro Brands, which fell thirteen per cent. Industry heavyweights Relaxo Footwear and Bata India also saw their valuations correct by approximately eight per cent.

Market analysts have attributed the slump to a perfect storm of external factors that dampened consumer appetite. A combination of intense heatwaves, the disruption of the general election period, and a quieter wedding season has led to a noticeable shift in consumer spending. These factors, combined with high stock valuations, prompted many investors to lock in profits and led brokerages to downgrade their earnings forecasts for the coming months.

Bata India, Metro Brands, and 5 others plunge up to 20 per cent in a month.

The sector is also navigating a significant regulatory shift following the implementation of new Bureau of Indian Standards (BIS) requirements, which became fully effective on August 1, 2024. While most companies have completed the transition, they face a June 2025 deadline to liquidate older inventory that does not meet the new criteria. Industry leaders hope the move will eventually curb the influx of low-cost imports from China, though they have warned that India still lacks the advanced manufacturing capabilities needed to produce high-end technical footwear without further government support.

Despite the immediate market pressure, major retailers are maintaining their aggressive expansion targets. Metro Brands added 17 new stores in the last quarter and remains committed to opening one hundred more this year. Similarly, Bata India is pushing ahead with a plan to add up to fifty exclusive outlets per quarter, pivoting its strategy toward "sneakerization" and casual fashion, which it expects to account for sixty to sixty-five per cent of its sales within three years.

While analysts at firms like Kotak Institutional Equities remain cautious, citing expensive valuations and potential earnings risks if demand does not recover shortly, the long-term outlook for the sector remains largely positive. Firms such as Motilal Oswal have maintained ‘buy’ ratings on several stocks, anticipating a stronger performance in the second half of the financial year driven by the upcoming festive season and a resurgence in wedding-related spending.