Mirza International Ltd Leather Stocks Surge 15% After Nirmala Sitharaman Unveils Scheme to Boost Industry
Leather Industry Gets a Major Push in Union Budget 2025-26
Mirza International Ltd: The Indian leather industry received a significant boost as Finance Minister Nirmala Sitharaman announced a Focus Product Scheme in the Union Budget 2025-26. Following this development, leather stocks surged up to 15%, with Mirza International Ltd. leading the rally. The scheme aims to enhance domestic production, create employment, and increase exports, strengthening India’s position in the global leather and footwear markets.
Leather Stocks Rally as Budget Announcement Sparks Optimism
On Monday, February 3, 2025, shares of Mirza International Ltd., a leading manufacturer and exporter of finished leather, witnessed a sharp increase of 14.5%, reaching a high of ₹43.80 per share from its previous closing price of ₹38.25.
The surge in stock price reflects investor optimism after the government’s announcement of a growth-oriented scheme aimed at revitalizing the leather industry.
The market capitalization of Mirza International now stands at ₹584.87 crores, highlighting growing investor confidence in the company’s future prospects.
What’s Driving the Leather Industry Boom?
The Focus Product Scheme introduced in the Union Budget is set to revolutionize the leather sector by:
✅ Generating employment for 22 lakh individuals
✅ Increasing total industry turnover to ₹4 lakh crore
✅ Boosting leather exports beyond ₹1.1 lakh crore
This initiative is expected to not only strengthen domestic manufacturing but also make India a dominant player in the global footwear and leather industry.
The Indian leather sector has been striving to compete with global leaders like China, Italy, and Vietnam, and this scheme is seen as a crucial step in achieving that goal.
About Mirza International Ltd.
Mirza International Ltd. is a prominent player in the Indian leather industry, specializing in the manufacturing, marketing, and exporting of leather footwear and accessories.
The company operates across multiple segments, including:
- Footwear Division (86.52% of revenue)
- Tannery Business (13.05% of revenue)
- Other Segments (0.42% of revenue)
With a robust presence in both domestic and international markets, Mirza International is recognized as one of the top producers of finished leather and leather shoes in India.
Financial Performance: Mixed Signals for Investors
Despite the positive market sentiment, Mirza International Ltd. has been facing financial challenges.
The company reported a decline in total revenue by 19.7% in Q3 FY24-25, falling from ₹143.22 crore to ₹114.92 crore.
Additionally, the company slipped into the red, reporting a net loss of ₹5.69 crore, compared to a profit of ₹4.4 crore in the previous quarter.
Financial Overview of Mirza International Ltd.
| Metric | Value |
|---|---|
| Market Cap | ₹584 Cr. |
| Current Price | ₹42.2 |
| 52-Week High/Low | ₹56.0 / ₹30.6 |
| Stock P/E | 286 |
| Book Value | ₹40.0 |
| Dividend Yield | 0.00% |
| ROCE (Return on Capital Employed) | 4.87% |
| ROE (Return on Equity) | 2.22% |
| Face Value | ₹2.00 |
| Debt-to-Equity Ratio | 0.07 |
| Industry P/E | 70.9 |
| Total Debt | ₹38.6 Cr. |
| PEG Ratio | -11.8 |
| Intrinsic Value | ₹7.73 |
| Graham Number | ₹11.5 |
| Piotroski Score | 6.00 |
Should You Invest in Leather Stocks?
With the government’s renewed focus on the leather industry, investors are eyeing stocks like Mirza International Ltd. for potential gains.
However, challenges remain, including:
- Declining revenue and profitability
- High stock P/E ratio (286), making valuation expensive
- Low ROE (2.22%) and ROCE (4.87%) indicating weak efficiency
Despite these concerns, long-term investors may see value in the company, given its strong market presence and the positive impact of the new government scheme.
If the company can capitalize on export opportunities and improve operational efficiency, it could emerge as a major beneficiary of the industry’s growth.
Conclusion: A New Dawn for the Leather Industry?
The Focus Product Scheme is expected to be a game-changer for the Indian leather industry, driving higher employment, production, and exports.
While Mirza International Ltd. has seen a short-term boost in its stock price, investors should carefully analyze its financials and growth prospects before making investment decisions.
With the right government support and strategic execution, the leather industry in India could soon become a global powerhouse, and companies like Mirza International Ltd. stand to gain significantly.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.