Relaxo Footwears - Value Growth Would Be Supported By Volume Growth: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Relaxo Footwears Ltd.’s revenue grew by 8.8% YoY during H1 FY24, led by 28.6% YoY volume growth. However, the growth was restricted due to ~15% price reductions during past few quarters. During H2 FY24, volume is anticipated to grow by ~25-30%. However due to ~8-10% price cuts, value growth is expected ~15-16% (earlier guidance ~18-20%). We believe, going ahead volume growth would drive value growth.Over past few quarters, Relaxo’s gross margins were impacted due to significant inflation in economic valued added, PUC and polymer prices which resulted in high cost inventory in the system. However, softening of raw material prices in recent times and phasing out of high cost inventory in Q2 FY24 resulted in gross margins going back to normalized levels. Furthermore, though Ebitda margins were lower at 12.8% during Q2 FY24. The management has guided that margins have scope to improve hereon. However, the company would take time to achieve normalised margins of ~15-16% due to increased competition and BIS implementation..Click on the attachment to read the full report:.Torrent Pharma - Well-Poised To Improve Earnings Outlook: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Relaxo Footwears - Value Growth Would Be Supported By Volume Growth: Dolat Capital

Rationalisation of inventory led to normalisation of margins

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