Relaxo Footwears Ltd. share price target

Progressive Numbers Despite Macros Not Supporting: A combination of favourable product mix and lower raw material prices aided Relaxo to post good numbers in Q3FY20.

Walking the Talk: A combination of premiumization and lower cost has aided the company to post a revenue growth.

Relaxo Footwears' (Relaxo's) Q2FY2020 reported numbers are not comparable y-o-y due to implementation of Ind-AS 116. Revenue grew by 14.5% y-o-y driven by premiumisation and price hikes, while reported PAT grew by ~79% y-o-y helped by strong operating performance and a lower corporate tax rate. Implementation of Ind-AS 116 impacted profit before tax by Rs. 2.1 crore. Relaxo reported resilient performance amid slow discretionary environment and going ahead, its operating performance is likely to remain steady, backed by sustained volume...

Relaxo's revenue surged 14.5% YoY to ` 6.2bn in Q2FY20 - came in line with our estimates. The company exhibited tenth consecutive quarter of strong double digit revenue growth. Growth was driven mainly by...

Steady Performance in Q1, PAT up 8%: Relaxo posted 14% revenue growth to Rs. 6483 Mn and gross margins were steady at ~ 54% (supported by softening raw material prices). We believe the revenue growth was well supported by increase in volumes and a favourable product mix.

Relaxo Footwear's (Relaxo) Q1FY2020 reported financials are not comparable on a y-o-y basis due to the implementation of Ind AS 116. Relaxo's revenue and operating profit grew by 15.4% each on a comparable basis, driven by strong volume growth and favourable product mix. Implementation of Ind AS 116 impacted PAT by ~Rs. 2 crore. Relaxo is expected to maintain its steady operating performance backed by sustained volume growth. We expect OPM to sustain at 1415% in FY2020 on account of benign raw material prices and operating efficiencies. We maintain our Buy recommendation on the stock with...

Volumes Drive Growth: Our FY19 estimates were in line with the actuals (marginal deviation around 1% in revenue and 2% in PAT).

View: Double digit volume growth continues. Maintain Buy Relaxo's Q4FY19 results came in line with our estimates. For the eighth consecutive quarter, the company was able to report double digit volume growth. We have marginally tweaked our FY20E and FY21E earnings estimate at ` 20.3 and `24.2 respectively to factor in Q4 results. We continue to believe that the company would maintain its double digit revenue growth over our investment horizon. Valuing Relaxo at 40x FY21E...

Higher Costs, GST Related Impacts Lead to Decline in Margins: Revenues grew by 21% on YoY basis for Q3FY19 (on account of volume growth) but higher raw material costs (partially due to the Rupee depreciating to an alltime low at peak INR traded at Rs. 73.8 vs USD) led to lowest quarterly EBITDA margins (13.2%) in the last 3 fiscals.