RELAXO.NSE Relaxo Footwears Ltd.

The stress in the mass consumption segment is beginning to show up in GDP growth as pent-up demand from high-end consumers reach saturation.

Sharekhan is bullish on Relaxo Footwear has recommended buy rating on the stock with a target price of Rs 930 in its research report dated February 10, 2023.

ICICI Direct recommended hold rating on Relaxo Footwears with a target price of Rs 745 in its research report dated February 06, 2023.

Relaxo Footwears has appointed Ankit Jain as Company Secretary and Compliance Officer of the Company upon recommendation of Nomination and Remuneration Committee of the Company with effect from 04 February 2023.

Revenue from operations declined by 8% YoY to Rs 681 crore during the quarter. It was impacted by the subdued demand in mass segment articles and the higher volumevalue base in the corresponding quarter in FY22 due to change in GST rate with effect from1 January 2022.EBITDA in Q3 FY23 was Rs 72 crore, down 41% from Rs 122 crore in Q3 FY22. EBITDA margin was 10.6% in Q3 FY23 as against 16.4% in Q3 FY22. This was due to aggressive price corrections in open footwear as well as the liquidation of high cost inventory in the pipeline in the current quarter. However, the margins witnessed an increase on a Q-o-Q basis.Ramesh Kumar Dua, managing director, said: “The company has reported a modest performance in Q3FY23. In spite of subdued demand due to the continuing inflationary pressures on the consumers, the Company showed marginal improvement in volumes on Q-o-Q basis. The volume growth was primarily supported by price corrections undertaken.Market environment remains competitive & challenging. The company made price corrections to counter the same. While we have started seeing the effect of the same on volumes, its full effect will come into play from Q4FY23 onwards. Once the major portion of the high-cost inventory gets cleared from our distribution channels coupled with the business showing signs of improvement and raw material costs stabilising, we expect improvements in margins while regaining the market share in the quarters to come. We also anticipate that our closed footwear segment will continue to show healthy growth momentum as wholesale distribution channels and online penetration improve.”Relaxo Footwears is engaged in production of Hawaii slippers, light weight slippers, canvas shoes, PVC footwear etc.

Relaxo Footwears' net profit fell 57 percent year-on-year to Rs 30 crore in Q3 FY23, and net profit margin stood at 4.4 percent as compared to 9.4 percent in the year-ago period