Khadim India Q2 FY26 Concall Decoded: When GST met Grit – Footwear found its sole again (almost)
1. Opening Hook
Remember when your mom told you to buy Bata because “it lasts longer”? Well, Khadim just told investors that “durability” might not apply to margins. After a flood in Kolkata, a GST shuffle, and a marketplace that’s more moody than your ex, Khadim’s management pulled off a decent show — complete with Skechers collabs, double-digit premium brand growth, and COCO store closures. The footwear maker is clearly trying to lace up again after tripping over sluggish demand. Read on — because what they said next could either make you buy new shoes or throw your old financial model out the window.
2. At a Glance
Revenue INR 1,016 mn – Sales walked, didn’t run; still recovering from soggy Kolkata and soggier sentiment.
Gross Margin 47.1% – Held its ground better than expected; CFO says “discounts did it.”
EBITDA INR 137.9 mn (13.6%) – The cost monster tamed, but not slain.
PAT INR 16.8 mn (1.7%) – Profit’s still shy; maybe it’s camera conscious.
Stock: TBD – Waiting for KSR Footwear’s listing bounce to add some spring.
3. Management’s Key Commentary
Rittick Roy Burman (MD): “Urban and semi-urban markets are showing recovery. Footfalls are improving.” (Translation: People are window-shopping again, not necessarily buying yet 😏*)
Indrajit Chaudhuri (CFO): “GST reduction came in the last 9-10 days of the quarter. We expect full benefits next quarter.” (Translation: Don’t judge us yet; the GST fairy came late to the party.*)
Rittick: “Our partnership with Skechers is progressing well, early response is strong.” (Translation: Finally, a collab that might make our shoes cool enough for Instagram.*)
Indrajit: “We’ve shut 30 loss-making COCO stores. It impacted sales but improved health.” (Translation: We’re dieting on revenue for a fitter balance sheet.*)
Rittick: “British Walkers and Sharon grew double digits; mid-price range still a pain point.” (Translation: Either go cheap or go chic — middle-class shoes are out of fashion.*)
Indrajit: “Working capital is high, but we’re reducing debtors and obsolete stock.” (Translation: The shoes are moving, but the cash is still waiting for a lift.*)
Rittick: “We want British Walkers to have its own zone in stores.” (Translation: It’s not a section, it’s a vibe.*)
4. Numbers Decoded
Metric
Q2 FY26
Q1 FY26
Commentary
Revenue (INR mn)
1,016
957
Slight uptick, festivals helped.
Gross Profit (INR mn)
478.7
456
Discounts still haunting margins.
Gross Margin (%)
47.1
47.6
Flat — discounts ate GST gains.
EBITDA (INR mn)
137.9
123.3
Marginal improvement; rent & ad costs stable.
EBITDA Margin (%)
13.6
12.9
Some breathing room.
PAT (INR mn)
16.8
8.6
Doubled — still baby steps.
Stores
893
856
Franchise-heavy, COCO-light.
Comment: GST 5% cut could finally move sales from “meh” to “maybe.” If footfalls hold, Q3 might just step up.
5. Analyst Questions
Q: “Why are margins not improving despite lower discounts?” A: “GST came late; discounts stayed longer than expected.” (Translation: Old habits die hard, especially in retail.*)
Q: “When’s KSR Footwear listing?” A: “Early next week.” (Translation: For real this time — fingers crossed.*)
Q: “Inventory and receivables look bloated.” A: “We’re on a workout plan; 90 days cycle is the dream.” (Translation: The treadmill has started, but no weight loss yet.*)
6. Guidance & Outlook
Management expects a full-quarter benefit of GST reduction in Q3 FY26 — the first real tailwind in years. The festive and wedding season should bump up demand, especially in mid-range shoes now cheaper by ~10-15%. They’re bullish on premium categories via British Walkers and Sharon,
