Relaxo Footwears stock sheds 3% after Q3 PAT declines 22% yoy to Rs70cr

31 Jan 2022 , 03:15 PM

Relaxo Footwears Limited revenue grew by 11% at Rs744cr for the quarter ended December 31, 2021 as compared to Rs672cr in the corresponding period of the previous year due to calibrated price hikes taken to mitigate the impact of high raw material prices.

EBITDA at Rs122cr as compared to Rs149cr in the corresponding period of the previous year. EBITDA Margins decreased by 577 bps yoy to 16.4% due to an increase in raw material prices and additional margin offered to neutralize the impact of GST rate increase from 5% to 12% w.e.f. January 1, 2022.

Profit after Tax at Rs70cr as compared to Rs90 crore in the corresponding period of the previous year. During the quarter additional capacity of 1.5 Lacs pair per day of footwear was commissioned at unit located in Bhiwadi Rajasthan, taking the total capacity across all categories and Plants to 10 Lacs pair per day of footwear.

For 9MFY22, revenue grew by 21% at Rs1,955cr as compared to Rs1,611cr in the corresponding period of the previous year. EBITDA down at Rs305cr as compared to Rs333cr in the corresponding period of the previous year. Profit after Tax down at Rs170cr as compared to Rs189cr in the corresponding period of the previous year.

Towards close of trade on Monday, Relaxo Footwears Ltd was trading at Rs1,230 per share down by Rs41.1 or 3.23% from its previous closing of Rs1,271.10 per share on the BSE.

Ramesh Kumar Dua, Managing Director, said, “Indian economy continued to recover remarkably well from the pandemic induced disruptions and its quite commendable that India’s COVID vaccination coverage has crossed 150 crore mark, with almost 90% of the eligible population receiving at least one dose. Further, the government has started vaccination drive for youngsters in the age group 15-18 years. These developments seem to have helped curtail the mortality impact of the more transmissible Omicron variant and gives us hope that we will be able to come out of this quicker and stronger.”

“We have taken calibrated price hike against unprecedented inflationary trend in raw material prices and current trend of raw material prices are easing out from its peak, which will give advantage in next year. The impact of GST rates will settle by the end of Q4, however, it will start giving advantage in unblocking of funds in inverted duty.,” he added.

Ramesh Kumar Dua further added, “During the quarter, we commissioned additional capacity of 1.5 lac pairs per day to cater to the growing demand and capture higher market share. We continue to remain consumer centric with best quality products, diverse portfolio, product innovation, strong market reach and continue to adopt strategic initiatives to capture expanding market opportunities in unexplored geographies to drive growth across all segments of our business. The company continued to enjoy comfortable liquidity position with zero net debt.”