Sharekhan’s research report on Relaxo Footwear
Relaxo Footwear (Relaxo) registered another quarter of muted numbers with a decline in revenues and margins. However, strategic initiatives have started showing results with sequential improvement in sales volume. The significant impact of price correction would come in from Q4FY2023. Management targets double digit revenue growth in FY2024, which will be largely volume-led growth. With raw material prices correcting from its highs, EBIDTA margins are expected to consistently improve in the quarters ahead.
The stock has corrected by 40% in last one year and is trading at 87.6x/55.4x its FY2024E/ FY2025E earnings. We maintain our Buy rating with revised PT of Rs. 930 with strong recovery expected in the years ahead.
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Relaxo Footwear - 09 -03 - 2023 - khan