Khadim India Ltd Q2 FY26 Results: The Footwear Player That’s Trying To Lace Up After a Demerger Hangover

1. At a Glance

Welcome to the world ofKhadim India Ltd, the footwear veteran that’s been walking India’s streets since 1981 — sometimes sprinting, sometimes limping, and lately, trying to find its balance after a demerger marathon. With amarket cap of ₹379 croreand the stock chilling around₹206 per share, Khadim’s current sprint seems more like a Sunday stroll. Thestock is down 35% over the last year— yes, even your old Bata sneakers have seen better traction.

Despite its long retail legacy, the company’s latestQ2 FY26results show a struggle to find rhythm. Sales for the quarter came in at₹101.6 crore, down36.7% YoY, and net profit managed a slim₹1.68 crore, down28.8% YoY. TheP/E ratio stands at 26.4x, which in footwear-speak means Khadim is priced like a mid-tier sneaker but running with slipper-like speed. Debt remains heavy at₹255 crore, whileROE limps at 2.2%.

The company’sdistribution business demerger became effective in April 2025, so these numbers represent the “new” Khadim — lighter, nimbler, but still figuring out how to tie its laces right.

2. Introduction

Once upon a time, Khadim was the undisputed king of “value footwear.” If you wore sandals with socks in college, chances are they were Khadim. Today, it’s thesecond-largest footwear retailer in India, but its financial jog has turned into a treadmill session — lots of motion, little progress.

With864 branded stores(221 company-owned and 643 franchised) and747 distributors, Khadim’s network looks impressive. But like many large Indian families, managing all these “relatives” comes with drama.

Khadim’stwo-segment model— Retail and Distribution — gave it both glamour and grunt work. Retail gave brand visibility; Distribution gave volume. But the recentdemerger of the Distribution businesshas left investors wondering if the glamour alone can pay the bills.

Still, Khadim continues to make moves — fromexpanding its Bangladesh subsidiaryto introducing quirky new sub-brands likeProandFitnxt. Yet, its financial story reads like an old shoe catalog: lots of models, but not enough buyers.

3. Business Model – WTF Do They Even Do?

In plain Hindi: Khadim sells shoes — from hawai chappals to leather formals — through two main channels:

1. Retail Segment– This is where the brand flexes. Think premium sandals, semi-formals, and urban lifestyle products under labels likeBritish Walkers,Lazard,Softouch,Cleo, andAorianna. Retail stores cater to the value-conscious middle class who want “style on EMI.”
   • Around91% of retail products are outsourced, meaning Khadim acts as the middleman in stylish packaging.
   • Roughly74% of stores are franchise-run, which saves Khadim the headache of managing rent and operations — a smart asset-light move.
2. Distribution Segment (now demerged)– Earlier, Khadim used to manufacture and supply affordable footwear to distributors under brands likeKalypse,Wash n Wear, andPugo. These guys sold to multi-brand outlets (MBOs) across India. The segment was volume-heavy but margin-light — think “hawai chappal with an MBA.”

Now, post-demerger, the retail segment stands alone — smaller in revenue but higher in brand control. It’s like divorcing your practical spouse to chase your influencer dreams.

4. Financials Overview

Quarterly Results Lock: Q2 FY26

Commentary:Khadim’s revenue drop is sharper than a new pair of leather formals on wet marble. A36.7% YoY declinepost-demerger shows the scale lost from cutting out the Distribution segment. EBITDA margins at13.6%remain decent, but net profit margins are as thin as their insole foam.

Still, QoQ improvement hints the company may be stabilizing — or just adjusting to its post-demerger shoe size.

5. Valuation Discussion – Fair Value Range Only

Let’s