📢 5 STEPS TOWARDS WEALTH 🚀 The Indian Stock Market Way
## Relaxo Footwears Limited Q1 FY25 Results Analysis
### Company Overview
Relaxo Footwears Limited, established in 1976, is one of the largest footwear manufacturers in India, known for its brands such as Relaxo, Sparx, Flite, and Bahamas. The company has a diverse product portfolio and a strong distribution network with 70,000+ retailers, 650+ distributors, and 399 exclusive brand outlets.
### Q1 FY25 Financial Performance
#### Volume, Sales, and Profit Growth
- **Revenue from Operations:** ₹748.19 crore, up by 1.27% YoY from ₹738.82 crore in Q1 FY24.
- **Total Income:** ₹753.62 crore, up by 1.01% YoY from ₹746.09 crore in Q1 FY24.
- **Profit Before Tax (PBT):** ₹60.33 crore, down by 20.38% YoY from ₹75.77 crore in Q1 FY24.
- **Profit After Tax (PAT):** ₹44.37 crore, down by 21.22% YoY from ₹56.32 crore in Q1 FY24.
- **EBITDA:** ₹98.90 crore, down by 8.04% YoY from ₹107.55 crore in Q1 FY24.
- **EBITDA Margin:** 13.22%, down from 14.56% in Q1 FY24.
- **EPS:** ₹1.78, down by 21.24% YoY from ₹2.26 in Q1 FY24.
#### Profitability Ratios
- **EBITDA Margin:** 13.22%
- **PBT Margin:** 8.06%
- **PAT Margin:** 5.93%
#### Leverage Ratios
- **Interest Coverage Ratio:** = approx 20.23
#### Earnings Ratios
- **Earnings Per Share (EPS):** ₹1.78 for Q1 FY25.
### Industry Overview
The Indian footwear industry is poised for significant growth, driven by rising disposable incomes, changing lifestyles, and increased brand awareness. India is the second-largest footwear producer globally, with strong domestic manufacturing capabilities. The industry is seeing a shift towards organized retail and e-commerce, with a growing trend of premiumization and branded footwear.
### Peer Group Analysis
Key competitors in the Indian footwear market include:
- **Bata India Ltd.**
- **Liberty Shoes Ltd.**
- **Khadim India Ltd.**
- **Mirza International Ltd.**
### Future Outlook
Relaxo is well-positioned to capitalize on the growth potential of the Indian footwear industry due to its strong brand portfolio, extensive distribution network, and focus on manufacturing excellence. However, the company faces challenges related to rising raw material costs and competitive pressures. Future strategies should focus on enhancing operational efficiencies, expanding market reach, and leveraging digital channels to drive growth.
### Insights from Q1 FY25 Results
- **Volume and Sales Growth:** Despite a slight increase in revenue, the company witnessed a decline in profitability margins, indicating pressure on cost management and competitive pricing strategies.
- **Operational Efficiency:** Continued focus on optimizing operations and cost control measures will be crucial for improving margins.
- **Market Expansion:** Strengthening the retail and e-commerce channels can help capture a larger market share.
- **Innovation and Product Development:** Investing in product innovation and aligning with consumer trends will be key drivers for future growth.
In conclusion, while Relaxo Footwears Limited revenue has been already affected since the last 2 years which has dragged down the profits also, Increasing demand, improving profitability and managing costs effectively will be essential for sustaining long-term growth in a competitive market environment.
