1. At a Glance
Redtape Ltd is India’s homegrown fashion-footwear juggernaut, strutting across malls and minds alike with over 435 stores. Once a shoe-only brand, it’s now a full-blown lifestyle label. But behind the catwalk glam, is the balance sheet wearing stilettos on a tightrope?
2. Introduction with Hook
If Bata is your dad’s brand and Metro is your fancy friend’s pick, Redtape is your Gen Z cousin who just walked out of a GQ shoot… in Kanpur.
- ₹2,020 Cr in sales FY25 (up from ₹303 Cr in FY22)
- ROE a fashionable 24%, even as cash flows say otherwise
- Demerged from Mirza International in 2023 and now strutting solo
3. Business Model (WTF Do They Even Do?)
Redtape designs, manufactures, and sells fashion-forward footwear and apparel for all age groups. Think:
- Shoes (men, women, kids)
- Apparel (shirts, denim, jackets, etc.)
- Accessories (belts, socks, wallets)
Revenue streams: - Exclusive Brand Outlets (435+ and counting)
- E-commerce: Amazon, Flipkart, Myntra, and their own site
- International exports (UK, Middle East)
Essentially, they’re India’s answer to H&M… but with better chappals.
4. Financials Overview
Income Statement Summary (₹ Cr):
| Year | Sales | EBITDA | PAT | OPM | EPS |
|---|---|---|---|---|---|
| FY22 | 303 | 47 | 29 | 16% | 2.57 |
| FY23 | 1,468 | 244 | 142 | 17% | 3.19 |
| FY24 | 1,843 | 319 | 176 | 17% | 3.08 |
| FY25 | 2,020 | 335 | 170 | 17% | 3.08 |
🧠 Financials say “scale up,” but cash flow is giving “slow down, cowboy.”
5. Valuation
Let’s attempt a red-carpet-worthy valuation walkthrough:
- P/E Based: FY25 EPS ₹3.08
- Industry avg P/E: 60 (Metro: 91, Campus: 72)
- Redtape’s current P/E: ~44
- FV Range: ₹120–₹185
(The market expects growth, but the company is still lacing its boots post-demerger.)
- DCF Fair Value Estimate:
Assuming 15% growth for 3 years, tapering to 8%, and 12% discount rate:
FV Range: ₹130–₹160
Bottom Line: Stock looks “reasonably hip,” but not dirt cheap.
6. What’s Cooking – News, Triggers, Drama
- 🔥 Tie-ups with ONDC & Daraz (Bangladesh) — digital and export expansion
- 🧨 Huge bonus issue & dividend payout in Dec 2024
- 🏗️ Store expansion blitzkrieg — 500 stores in sight
- 👠 Increasing clothing & accessories mix — higher-margin category
- 🚨 Inventory Days spike (413 days in FY25) = fashion pile-up?
7. Balance Sheet
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Equity Capital | 0.01 | 28 | 28 | 111 |
| Reserves | 336 | 449 | 621 | 678 |
| Borrowings | 28 | 260 | 480 | 724 |
| Other Liabilities | 461 | 502 | 460 | 712 |
| Total Liabilities | 826 | 1,239 | 1,588 | 2,224 |
| Fixed Assets | 304 | 368 | 646 | 717 |
| CWIP | 17 | 71 | 17 | 46 |
Key Take: Borrowings doubled, but asset creation is visible. Equity capital increase likely linked to bonus/rights issuance.
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| CFO | 44 | 127 | 84 | 14 |
| CFI | -49 | -127 | -116 | -107 |
| CFF | -17 | 12 | 26 | 99 |
| Net | -22 | 12 | -5 | 5 |
Cash Flow Crisis or Just a Phase?
Operations generated cash but not enough to fund expansion. Hence, borrowings & equity raise.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE (%) | 37% | 29% | 22% |
| ROE (%) | 29% | 28% | 24% |
| Debtor Days | 21 | 18 | 20 |
| Inventory Days | 308 | 298 | 413 |
| CCC (days) | 164 | 208 | 262 |
Verdict: ROCE falling as company over-indexes on growth. Inventory days need a diet plan, ASAP.
10. P&L Breakdown – Show Me the Money
| ₹ Cr | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Sales | 303 | 1,468 | 1,843 | 2,020 |
| Expenses | 256 | 1,224 | 1,524 | 1,685 |
| OPM % | 16% | 17% | 17% | 17% |
| Net Profit | 29 | 142 | 176 | 170 |
| EPS (₹) | 2.57 | 3.19 | 3.08 | 3.08 |
Steady Margins, but net profit flattened despite higher topline = margin stress building?
11. Peer Comparison
| Company | P/E | ROE | OPM | PAT (Cr) | Sales (Cr) | CMP |
|---|---|---|---|---|---|---|
| Metro Brands | 91 | 20% | 30% | 351 | 2,507 | ₹1,182 |
| Bata India | 66 | 15% | 21% | 240 | 3,489 | ₹1,236 |
| Campus Activewear | 73 | 17% | 15% | 121 | 1,593 | ₹289 |
| Redtape | 44 | 24% | 17% | 170 | 2,020 | ₹135 |
Interpretation: Redtape has strong profitability but lower valuation — could be underdog, or undervalued due to low liquidity or post-demerger confusion.
12. Miscellaneous – Shareholding, Promoters
| Stakeholder | Jun ’24 | Mar ’25 |
|---|---|---|
| Promoters | 71.79% | 71.80% |
| FIIs | 3.17% | 3.53% |
| DIIs | 8.89% | 10.25% |
| Public | 16.16% | 14.44% |
- Smart money is moving in. FII + DII increased every quarter.
- Shareholder count rising = retail catching the whiff of alpha.
13. EduInvesting Verdict™
Redtape Ltd is not your old-school leather boot anymore — it’s become a full-blown brand beast straddling footwear and fashion. The growth from ₹303 Cr in FY22 to ₹2,000+ Cr in FY25 is nothing short of a ramp walk on steroids. But like every model, it has baggage — bloated inventory, low cash flows, and high leverage.
The narrative? A demerger-baby that’s growing fast but needs discipline. Keep an eye on margin stability, working capital, and how the fashion-to-finance walk plays out.
Metadata
– Written by EduInvesting Team | 15 July 2025
– Tags: Redtape, Fashion Stocks, Smallcap Retail, Footwear Stocks, Demerger Analysis, Lifestyle Brands India, Value Unlocking
