Multiple price hikes could impact demand of footwear companies, say experts

The increase in product prices are on account of higher input costs, GST hike

From the start of May to their 52-week highs in November, listed footwear majors such as Bata India (Bata) and Relaxo Footwears (Relaxo) have outperformed the BSE 500 companies gaining 40-66 per cent during this period. The unlock process led to a rise in discretionary spends helping the companies reach sales close to the pre-pandemic levels.

The gains were also on expectations that expansion, higher operational leverage and premiumisation would boost the revenue growth and margins of the two companies. While the street is bullish about the prospects of these companies in the medium term, there are some near-term headwinds