Mutual funds' favourite micro caps

Khadim: Eyeing sustainable growth Established in 1981, Khadim is the second-largest footwear retailer in India, the largest player in eastern India and amongst the top three players in South India. Its two distinct business verticals - retail and distribution - have their individual customer base, sales channels and product range. Its distribution-business vertical has a strong network of 544 distributors. Khadim follows an asset-light model for growth, with nearly three-fourths of its retailers being franchisees. With a mix of in-house and contract-manufacturing capabilities, the company has a highly scalable model that can cater to the sourcing requirements of its distribution business. However, Khadim reported losses to the tune of Rs.31.1 crore and Rs.32.9 crore in FY20 and FY21, respectively. Additionally, the operating margin declined continuously from 11.6 per cent in FY17 to 3.7 per cent in FY21. The non-leather footwear industry i