Relaxo Footwears declines after Q4 PAT falls 38% YoY

12 May 2022 , 09:56 AM

Revenue from operations fell nearly 7% year on year to Rs 698 crore in Q4 FY22 from Rs 748 crore reported in the same period last year. The company said revenue during the quarter was affected due to disruptions caused by Omicron variant of COVID, GST rate hike from 5% to 12% with effect from 1 January 2022 on footwear priced below Rs 1000 and subdued demand due to high inflation. Profit before tax declined by 38.6% to Rs 84.44 crore in Q4 FY22 over Q4 FY21. EBITDA was down by 32% to Rs 111 crore in the quarter ended 31 March 2022 from Rs 163 crore in the same quarter last year. Meanwhile, EBITDA margin slumped by 586 basis points to 15.9% in Q4 FY22 from 21.8% in Q4 FY21. Relaxo said margins declined mainly due to steep increase in raw material prices and extra support to trade towards GST rate differential on inventory. On full year basis, the footwear maker reported a 20.2% decline in net profit to Rs 232.68 crore despite of reporting a 12.5% increase in the net sales to Rs 2,653.27 crore in the financial year ended 31 March 2022 as against the financial year ended 31 March 2021. Commenting on the results and performance, Ramesh Kumar Dua, managing director of Relaxo said, ?Margins were affected by dual impact of substantial increase in raw material prices and normalisation of selling, marketing and admin expenses in FY 22 in comparison to FY 21 being Covid 19 pandemic year. In these challenging times as well, we stood by our dealers & distributors and offered extra support to safeguard their margin towards GST rate differential.? Despite all these, the company recorded revenue growth of 12% YoY which is a testimony of being the most trusted brand, having consumer centric approach, continuous product innovation and strong execution. The inflationary pressure across the Globe swindles almost everybody and we are no exception?, he added. Dua further added, ?Going forward, in view of no immediate relief from continual extraordinary inflation, we remain cautiously optimistic on the basis of strong recovery across categories specially in the high value closed footwear category after opening up of offices, schools & colleges.? Meanwhile, the board recommended a final dividend of Rs 2.5 per equity share for the financial year ended March 2022. Relaxo Footwears is engaged in production of Hawaii slippers, light weight slippers, canvas shoes, PVC footwear etc. Powered by Capital Market – Live News