The Hindu Business Line : Leather stocks may catch fancy of investors

Kolkata, Sept. 12 Stocks of leather goods and footwear makers are in the news, thanks to the accumulation that is said to be taking place in some of them.

Companies such as Bata India, Crew B.O.S. Products and Liberty Shoes figure in this list, market sources indicate, while referring to trends they say are becoming evident. The sector is in the news for a variety of reasons, it is also pointed out.

While Bata is now in the thick of its real estate project (in Kolkata), Crew B.O.S. has announced plan to set up a subsidiary outfit. Developments such as these are expected to act as triggers for the investment fraternity.

Leatherware, it is felt, will be a happening area in future, especially so in the context of increasing demand for branded products within the country. The domestic leather industry, sections of which are concentrating on creating capacities and using new technology, is keen to step up exports as well. Accessing newer markets abroad is being seen as a key input for achieving growth targets.

On the other side, the industry is said to be constrained by inadequate investments. Foreign investment in the sector is markedly low, a trend that needs to be countered on several fronts. Players operating in the sector need to step up their designing abilities, improve branding campaigns and bring about greater competitiveness, it is felt. In this context, listed leather goods/footwear companies are expected to pursue their growth strategies aggressively.

On Wednesday, the Bata stock closed at Rs 178.05 on NSE, where it recorded trades in 9.59 lakh shares. Its 52-week high and low stand at Rs 237 and Rs 125 respectively. Foreign promoters, it may be mentioned, hold 51 per cent of the stake, while the public holding (at the close of the last quarter) is 48.9 per cent. A leading insurance company holds over seven per cent of the equity.

In the case of Liberty Shoes, the scale of trading is limited — fewer than 8,000 shares making up the volume on BSE. The stock, which closed at Rs 129.40, has its 52-week high and low at Rs 179.75 and Rs 110.10 respectively. Here, the promoters control nearly 62 per cent of the company’s equity.

Liberty Shoes, it may be mentioned, had earlier informed the exchange that its board has been permitted to go ahead with a fund raising programme, in favour of institutional investors.

Crew B.O.S., which (besides leather) dabbles in the manufacture of fashion accessories made from fabrics and metals, also did not command large volumes. Fewer than 14,000 shares constituted trades in the counter. The latter closed at Rs 147.35 on NSE. Its 52-week high and low are Rs 294.90 and Rs 115.20 respectively.

The company, it may be mentioned, had entered into an MoU with a Chennai-based venture, Leather Crafts, for establishing a joint venture named Crew MAG Exports Pvt Ltd. It plans to manufacture and export footwear and other products. On another front, Crew B.O.S. has declared that it has recently started to make watch straps – with a view to widen its basket of products.