Summary

• Relaxo is the largest footwear manufacturer in India and a Fortune 500 (India) company
• Having a pan India distribution footprint, Relaxo also operates a 350+ strong network of own retail outlets, with availability on all major e commerce portals as well.
• Relaxo has 8 manufacturing facilities with a capacity to produce ~7.5 Lac pair/day.

Company Overview

Incorporated in 1984, Relaxo (NSE: RELAXO)is the largest footwear manufacturer in India, serving the nation since four decades, and is today ranked among the top 500 Most Valuable Companies. ¹

A Fortune 500 (India) company, synonymous with quality products & affordable prices,it manufactures slippers, sandals and sports & casual shoes.

Its most popular brands – Relaxo, Sparx, Flite & Bahamas are a leader in their space.

Relaxo, an iconic brand synonymous with rubber slippers, is the most versatile footwear for all segments of society while Flite is a popular range of fashionable and semi- formal slippers.

Sparx reflects the attitude, style, dynamism and spirit of young India and offers sports shoes, sandals & slippers and the colorful range of Bahamas casual flip flops exude the spirit of freedom, fun and modernity of youth.

Having a pan India distribution footprint, Relaxo also operates a 350+ strong network of own retail outlets, with availability on all major e commerce portals as well.

Historical Milestone

Manufacturing Facilities

8 manufacturing facilities with a capacity to produce ~7.5 Lac pair/day.²

• RFL I & II- BAHADURGARH
• RFL III - BHIWANI
• RFL IV - BAHADURGARH
• RFL V - HARIDWAR
• RFL VI - BAHADURGARH
• RFL VII - BAHADURGARH
• RFL VIII - BAHADURGARH
• RFL IX - BHIWADI

Brands

• RELAXO
• BAHAMAS
• FLITE
• SPARX
• BOSTON
• MARY JANE
• KID’S FUN
• Casualz

Industry Overview

India is the second largest footwear manufacturer in the world with 9% of the annual global production of 22 billion pairs. Presently about 90% of the footwear produced in India is consumed by the domestic market and the rest is exported. India’s consumption stands at ~2.1 billion pairs and is third largest globally after China and USA. ³

Increasing consumer preference for brands and a bent towards premium products will be facilitating growth in the forecast period for Indian footwear market. Coupled with a dynamic lifestyle, evolving purchase habits and impact of social media, rapid changes have come about in fashion trends, influencing footwear industry as well. Increasing awareness towards fitness and well-being has only further spurred footwear styling and growth, more so in the branded segment.

Rising disposable income is edging individuals up the value chain promoting occasion based purchases, leading to emergence of new product segments, differentiated by aesthetics, performance and price, be it shoes, sandals or even basic slippers, driving industry leaders to continually innovate their offerings fuelling growth in every category.

Unlike most global markets, the Indian footwear market is skewed towards men with the segment commanding nearly 60% share vis-à-vis a global average of 40%. However, improved education and employment opportunities and the resultant economic empowerment for women has substantially augmented demand of trendy and stylish footwear among women of all age groups and is likely to lead to disproportionately higher growth in the women’s footwear market.

It is expected that the market for footwear will grow on the back of the rise of middle-income group and increase in literacy rate. Further, active participation in the workforce, supported by evergrowing population and urbanization in the country will fuel market growth. Additionally, this evolution has led to a spurt in demand from tier 2 cities and below, opening up newer markets for the footwear industry. Several leading global fashion and lifestyle brands have started betting big on small cities of India. Nearly a third of future consumption in footwear is expected to come from the aspirational consumers in these markets.

Financial Highlights

During the Financial Year 2020-21, the company achieved a turnover of C 2,359.15 crores and profit of C 291.56 crores. Revenue from operations decreased by 2.13% to C 2359.15 Crore from C 2410.48 Crore in the last Financial Year. EBITDA increased by 21.16% to C 495.49 Crore from C 408.95 Crore in last Financial Year. Net profit increased by 28.87% to C 291.56 Crore from C 226.25 Crore in the last Financial Year.

The Board have recommended a final dividend @ 250% equivalent to C 2.50/- per equity share of C 1/- each fully paid up for the Financial Year 2020-21.

The capital expenditure incurred during the Financial Year 2020- 21 amounted to C 101.36 Crore as compared to C 94.77 Crores in Financial Year 2019-20. The capital expenditure was in line with the growth strategy of the Company and was funded through internal accruals.

Relaxo Q4FY21

Demand was suppressed in May, likely to improve in June, says management⁴

MAY 21, 2021; Relaxo Footwear on Wednesday reported a whopping 97.2 percent jump in its profit. From Rs 51.80 crore in Jan-March quarter of the last financial year, Relaxo reported Rs 102.17 crore in the quarter ended March 31, 2021.

Ramesh Kumar Dua, MD of the company said while the scene has been chaotic and uncertain, the company hope the market will open in June.

“Because of coronavirus pandemic things have been chaotic and uncertain. So demand has been low but May has been knocked out. Most of the markets have been brought under lockdown. I hope things will improve in June, market will start opening and then things will start looking up,” he said.

Adding that the contribution of e-commerce to the revenue is somewhere between 8-10 percent, he said shoe consumption has been low since schools and offices are shut.

“Consumption of footwear is there, it will be there even if people are at home. Once the things start opening up, demand will come back,” he added.

“I hope things will be much better in Q2FY22, Q3FY22 and Q4FY22,” he shared.

Relaxo Q1FY22

Net profit up 27.8% to Rs 30.96 crore ⁵

Relaxo Footwears Ltd on Saturday reported a 27.83 per cent increase in net profit to Rs 30.96 crore in the quarter ended in June 2021. It had posted a net profit of Rs 24.22 crore in the April-June quarter of the last fiscal, according to a regulatory filing by Relaxo Footwears.

Revenue from operations rose by 36.73 per cent to Rs 497.13 crore during the period under review compared to Rs 363.58 crore in the corresponding period of the previous fiscal.

Relaxo Footwears' total expenses were at Rs 462.15 crore, up 36.67 per cent compared to April-June 2020.

Commenting on the results, Relaxo Footwears Managing Director Ramesh Kumar Dua said, "During the months of April and May there were severe disruptions due to localized lockdowns across geographies.

"In spite of all the challenges the company managed to deliver yet another resilient quarter backed by its customer centric approach, market share and continuous focus on quality improvement, though, the company remain cautious on the rising trend in raw material prices."

During the quarter, the company invested into brand building, product innovation and enhancing customer reach to provide best in class experience and is well placed to emerge stronger in the post COVID - 19 world, Dua said.

"The company enjoys comfortable liquidity position with strong balance sheet and cash flow position and is rightly positioned to tap the growth opportunities in the sector," he said.; Relaxo Footwears Ltd on Saturday reported a 27.83 per cent increase in net profit to Rs 30.96 crore in the quarter ended in June 2021. It had posted a net profit of Rs 24.22 crore in the April-June quarter of the last fiscal, according to a regulatory filing by Relaxo Footwears.

"The company enjoys comfortable liquidity position with strong balance sheet and cash flow position and is rightly positioned to tap the growth opportunities in the sector," he said.

References

1. ^ https://www.relaxofootwear.com/about-relaxo
2. ^ https://www.relaxofootwear.com/manufacturing-units
3. ^ https://www.relaxofootwear.com/media/file/pdf/download_file/annual-report-2020-21-1627480629.pdf
4. ^ https://www.cnbctv18.com/earnings/relaxo-q4fy21-results-demand-was-suppressed-in-may-likely-to-improve-in-june-says-management-9385921.htm
5. ^ https://economictimes.indiatimes.com/markets/stocks/earnings/relaxo-footwears-q1-results-net-profit-up-27-8-to-rs-30-96-cr/articleshow/84922274.cms