Relaxo Footwears Ltd. share price target

Relaxo's Q2FY19 revenues jumped 18.6% YoY to ` 5.5bn came in line with our estimates. This is attributed to good volume growth during the quarter. Relaxo continues to witness better growth compared to Bata (+15%). We anticipated higher revenues for Relaxo compared to Bata based on our recent channel checks. The addition of new stores, increased online sales and premiumization was in line with our estimates. Going ahead, we believe that the company would continue to increase its distribution reach in southern and western markets. Further, premiumization would help it...

Gross margin contracted slightly by 20bps to 54%. A 20bps rise in RM and 140bps increase in staff costs was completely mitigated by 160bps decline in other expenses and led to flat EBITDA margins at 14.6%. This can be attributed to better product mix and cost efficiencies. EBITDA jumped by 16.9% YoY to ` 829mn- came below our estimates. APAT increased by 23% YoY to ` 460mn came in line with estimates. Recent cut in GST rate on footwear priced between ` 500 to ` 1,000 from 18% to 5% is expected to result in better demand for Relaxo's products going ahead....

Relaxo Footwear ltd. (RFL) is engaged in the manufacturing and trading of footwear and related products. Company manufactures footwear primarily made of vulcanized or molded rubber and...

Relaxo Footwears Ltd. (RFL) reported 3QFY16 result with revenue growth of 17% YoY to Rs 3.8bn and EBITDA increased by ~27 YoY to Rs.542mn due to healthy mix of volume growth and premiumization. Reported PAT increased...

Relaxo has enormous advantage because of its market positioning in the Indian footwear industry. It is mostly present in value segment where there is not much competition except VKC and Paragon who are based in southern markets where Relaxo has very less exposure. With most of the domestic companies concentrating on mass and mid segments and international players such as Nike, Puma and Reebok concentrating on premium segment, there is no real threat for Relaxo as far as competition is concerned.

Reported 169 bps expansion in EBIDTA margin to 13.2 v/s 11.5 YoY: RFL's EBITDA margin increased by ~169 bps YoY to ~33% in 2QFY16. EBITDA for 2QFY16 stood at Rs.511mn v/s Rs.385 mn in 2QFY15 an upsurge of ~33%YoY...

We had Initiated Research Coverage on Relaxo footwear on 4th June, 2015 with a HOLD Rating and a Price Target of Rs. 924. Post the Ex-date of Bonus issue of 1:1 (One share for every one share held), the target stands adjusted accordingly to Rs. 462 per share (from the earlier target of Rs. 924). Rating is under review for the stock awaiting first quarter results.

Positioned in a Sweet Spot in Indian Footwear Industry Relaxo has enormous advantage because of its market positioning in the Indian Footwear Industry. It is mostly present in value segment where there is not much competition except VKC and Paragon who are based in southern markets where relaxo has very less exposure.

Relaxo Footwears ltd (RFL) reported 4QFY15 result in line with our expectation. Revenue grew by 18.3% YoY to Rs 4.4 bn vs our expectation of Rs 4.4 bn led by strong volume growth and improving...

Valuation & recommendation: At CMP Rs.721, the stock is trading at around 36x FY15E PE. We expect that company to grow at 23.8% CAGR over FY14-FY18E and EBITDA to grow 26% CAGR over FY14-FY18E because of...