This highest safety rating takes into account the established position of Liberty Shoes in the Indian shoe industry, profitable operations which coupled with low gearing has resulted in healthy coverage indicators.

The rating also factors in the financial flexibility available to LSL by way of unutilised bank credit. LSL is engaged in the manufacturing of leather, non-leather footwear and rubber hawaii chappals. LSL sells shoes through a network of 353 exclusive Liberty showrooms and 110 distributors.

In the last five years, LSL registered a compounded annual growth rate (CAGR) growth of 32 percent in sales primarily due to growth in sales of non-leather footwear and introduction of hawaii chappals.

The operating margins declined from 23.5 per cent in 1996-97 to 19.4 per cent in 1999-99. The decline in operating margins resulted in a marginal decline in return on capital employed and return on networth, which declined from 19.1 per cent and 18.3 per cent in 1997-98 to 18.3 per cent and 17.9 per cent respectively in 1999-2000.

In 1999-2000, LSL has extended the accounting period from 12 to 15 months ending in June 2000. In the 15 month period, LSL registered a net sales of Rs 94.38 crore (Rs 76.20 crore in 1998-99). On an annualised basis, LSL registered flat sales, an Icra press release here on Wednesday said.