Relaxo Footwears Q4 Results Review - Gradual Recovery To Continue; Maintain Buy: Axis Securities

Axis Securities Report

Relaxo Footwears Ltd.’s revenue de-grew by ~2% YoY to Rs 747 crore, owing to the decline in overall volumes, down 4% YoY. However, this was partly offset by improved realisation by 3% YoY.

Moreover, the company reported a beat on Ebitda which grew by 2% YoY to Rs 120 crore while margins stood at 16.1%, up 68 bps YoY. This was led by sharp improvement in gross margins which were up 812 bps YoY to 60.3% on account of lower raw material and improved realisation.

To establish a direct connection with consumers and regulate discounts, the company has initiated the sale of products on online marketplaces, functioning as the "Brand As Seller," and through its official websites.

Furthermore, the company has also taken major digital initiatives, where the retailers can directly connect with the company through the “Relaxo Parivaar” app.

Currently, 50,000 outlets are connected through this app. Moreover, the company has come up with a Distributor Management System to help the distributors for secondary sales to retailers.

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