Lehar Footwear FY26: Rapid scale-up, lower leverage, and a new cash engine

Lehar Footwear ended FY26 with a sharp step-up in scale. Revenue rose to INR 431.1 crore, up 56% year on year. Profitability also expanded in absolute terms, with EBITDA at INR 38.9 crore and PAT at INR 20.8 crore. The presentation also reports operating cash flow of INR 25.2 crore and RoCE of 18%, pointing to a year where growth was paired with improving capital efficiency.

What stands out in the company’s narrative is that FY26 was not positioned as a one-off spike. It was described as an outcome of multiple growth levers moving together: an expanding non-leather footwear portfolio, deeper channel reach across India, exports, and a fast-scaling toolkit supply business under the PM Vishwakarma Scheme.

Two businesses: footwear as the core, toolkits as a cash generator

The presentation describes Lehar as an emerging non-leather footwear manufacturer with an EVA, PVC, and PU portfolio across men, women, and kids. It reports 1,300+ SKUs and a manufacturing footprint of five facilities, including a sports shoe and athleisure facility at Kundli.

Alongside the core footwear business, the toolkit vertical is positioned as a cash engine. The company states it started toolkit supply under the PM Vishwakarma Scheme in FY24-25. The model is described as asset-light, with negligible working capital requirements and high RoCE generation, supported by tech-enabled delivery-based payment disbursals. The FY26-27 budget outlay for the PM Vishwakarma Scheme is cited at INR 3,861 crore, which the company frames as supportive for scaling the toolkit business further.

A key limitation for investors is that the presentation does not provide an explicit revenue or profitability split between footwear and toolkits. That makes it difficult to independently quantify how much of FY26’s surge was driven by each vertical. Still, the company’s positioning is clear: footwear is the brand and manufacturing platform, and toolkits are intended to fund growth with strong cash flow characteristics.

Financial performance: growth with improving capital metrics

The company’s longer-term trend data indicates a strong climb from INR 95 crore revenue in FY20 to INR 431 crore in FY26, with RoCE rising from 5% in FY20 to 18% in FY26. EBITDA also increased from INR 8 crore in FY20 to INR 39 crore in FY26, while PAT grew from INR 0.1 crore to INR 20.8 crore over the same period. The presentation states revenue CAGR of 29% (FY20 to FY26), EBITDA CAGR of 31%, and PAT CAGR of 66%.

The balance sheet trend is presented as a positive. Debt is shown as near negligible in FY25 and about INR 1 crore in FY26, while debt-equity declined to 0.3 in FY26 from higher levels earlier in the cycle. The company attributes this to growth capex funded largely through internal accruals and cash flows.

Working capital metrics show a mixed picture. Inventory velocity improved to 86 days in FY26 from 119 days in FY25, indicating leaner inventory management. However, debtor days increased to 121 in FY26 from 97 in FY25, suggesting receivables stretched in the latest year. The company states that further improvement is expected with ERP implementation from April 2026.

Note: FY25 CFO and FY25 debt are not explicitly provided as absolute values in the text excerpt, while FY26 CFO and FY26 debt are explicitly stated.

Operating strategy: premiumisation, new categories, and wider channels

Lehar’s growth enablers list shows an intention to move up the value curve. The company highlights entry into high-value non-leather closed footwear, focus on branding and celebrity endorsements, premiumisation, launch of fashion footwear, and expanded reach in large format stores and modern retail. It also calls out government business as a key cash generating segment.

On the operating side, the company emphasizes a strong manufacturing base. It cites fully automatic injection moulding machinery for EVA footwear and a rotary type PU injection machine for PU footwear. It also notes continuous product innovation, including single mould EVA footwear and sports shoes.

Distribution is positioned as a key advantage. The company reports 520+ distributors across 27 states and presence on e-commerce platforms such as Flipkart and Bijnis. It also references large format store presence including Reliance and D-Mart. Exports were reported at INR 30 crore in FY26, up from INR 11 crore in FY20, indicating international expansion albeit still a small portion of overall scale based on the limited disclosure.

Capacity and execution: the Kundli athleisure buildout

A major initiative highlighted is a phased 5x capacity expansion at the Kundli sports shoe facility, from 1 lakh to 5 lakh pairs per month. The stated purpose is to support future demand, scale up, and align manufacturing standards with leading international footwear brands.

The presentation also notes that the new athleisure facility at Kundli is expected to commence commercial operations from Q2 FY27 onwards. This is one of the few explicit time-bound statements and provides investors a milestone to track.

The company’s athleisure strategy combines OEM manufacturing and building its own brand. It states that it has started OEM supply in athleisure and onboarded Spykar, Red Chief, Cult Sport, Yoho, Shein, Lee Cooper, Pleato, and Exelerate. Separately, it launched the in-house brand RANNR to target affordable mass-to-mid segment price points.

The combination of OEM partnerships and an in-house brand can broaden addressable demand, but it also brings execution complexity. OEM manufacturing requires consistent quality and on-time delivery, while building an in-house brand requires sustained channel investments and product differentiation. The presentation does not quantify the revenue contribution from OEMs or from RANNR, so monitoring subsequent disclosures becomes important.

What to track from here

The presentation frames Lehar as being positioned for structural tailwinds in Indian footwear, citing an industry size of INR 1.8 trillion in FY26 and an expected 13% CAGR to INR 3.36 trillion by FY31. It links this to drivers such as rising disposable income, premiumisation, export opportunities under China+1, and government support for domestic manufacturing.

For investors, the near-term focus areas suggested by the document are straightforward. First, whether FY26’s growth sustains while margins remain stable, especially given the FY26 EBITDA margin of around 9% as disclosed. Second, whether receivables normalize as ERP implementation begins from April 2026. Third, whether the Kundli commissioning from Q2 FY27 stays on schedule, since capacity ramp is central to the athleisure expansion narrative. And finally, whether the toolkit vertical continues to scale under the PM Vishwakarma outlay, without creating policy concentration risk.

Lehar’s FY26 investor presentation communicates a company moving quickly on scale, reducing leverage, and adding a new cash-generating vertical. The next phase will be judged on execution: converting capacity and channel expansion into durable cash flows, while maintaining working capital discipline and transparency on segment performance.