Listed entities analysed under footwear sector are :

• Relaxo Footwear
• Mirza International
• Liberty Shoes
• Superhouse
• Lehar Footwears

In this post, I have calculated the economic profit of the companies mentioned above with the help of ROIC i.e Return on Invested capital & WACC i.e Weighted Average Cost of Capital.

• Relaxo Footwear – CMP 750, Market Capitalization – Rs18,351Cr

ROIC= 24.55%, WACC= 12.28% hence the Economic profit of the company is 12.27%

• Mirza International – CMP 57, Market Capitalization – Rs682Cr

ROIC= 32.36%, WACC= 11.62% hence the Economic profit of the company is 20.74%

• Liberty Shoes – CMP135, Market Capitalization – Rs228Cr

ROIC= 10.45%, WACC= 12.41% hence the Economic Profit of the company is -1.96%

• Superhouse – CMP90, Market Capitalization – Rs102Cr

ROIC= 10.11%, WACC= 11.49% hence the Economic Profit of the company is -1.38%

• Lehar Footwears – CMP32, Market Capitalization – Rs43.50

ROIC= 8.81%, WACC= 13.01% hence the Economic profit of the company is -4.20%

Economic profit of the footwear sector is 5.09% which indicated the average profitability of the companies in the industry. Economic profit can surely help to identify growing sector/industry. I consider this as one of the major indicator during Top-down analysis as it gives a overview of the sector & its profitability.

‘Not An Ace,but you should always Aspire to be’

The only thing that inspires me for the best of my efficiency is the quoted sentence above, I Yash Shah feel privilege to welcome everyone to my page Hippie Investor. The reason for this blog page is to create Financial Literacy as well as to make people understand the power of investing towards equity segment unlike those TIPS (Text message that pops at your phone to Buy/Sell a share & make you a force investor) I would be sharing my analysis either by Bottom-Up i.e Specific Company or else Top-down Approach i.e Industry as a whole via this blogging page.

Thanks as well as heartily welcoming everyone.