A global brokerage has taken a bullish stance on two footwear stocks, underpinned by what it sees as a structural trend in the sector.

What Happened: Goldman Sachs highlighted in a recent research report that sports and athleisure (S&A) penetration stands as the most significant structural trend in Indian footwear.

This trend is fuelled by the increasing adoption of an active lifestyle, the country’s burgeoning sports culture and the growing acceptance of casual clothing in workplaces.

The research firm anticipates the value of India’s branded S&A footwear category to grow at a compound annual growth rate (CAGR) of 13% over FY25-45.

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Factors Behind Thesis: This growth will likely be driven by rising income levels, growing brand consciousness and improved availability of branded footwear, leading to a rise in branded footwear penetration to 75% from 85% over the past decade, while the market for unbranded or small brands has shrunk, the firm said.

Initiating coverage on Indian footwear companies, Goldman Sachs gave Metro Brands a “buy” rating and Bata India a “neutral” rating, citing optimistic growth prospects.

Goldman Sachs has set a target price of ₹1,450 for Metro Brands, implying a potential upside of 29% from current levels. For Bata India, the target price of ₹1,470 suggests a 7% increase.

Price Action: Metro Brands’ share price was up 0.98% at ₹1,133.05 near the end of trade on Tuesday, while Bata India’s share price shrank 0.78% to ₹1,371.85.

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