Relaxo Footwears Q1 Review - Lockdown Impacted Results; Revival Expected Going Ahead: Dolat Capital
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Dolat Capital Report
Relaxo Footwears Ltd.'s revenue jumped 37% YoY to Rs 5.0 billion in Q1 FY22.
We expected steady growth in revenue, however we feel that lockdown impact in northern and southern market was higher than our estimate.
While gross margin expanded 450 basis points, decline in Ebitda margin to 13.3% in Q1 FY22, was due to high advertising and promotion expenses.
We believe that the margins would improve sequentially with better operating leverage and cost efficiencies.
In the long run, we believe that Relaxo Footwears would continue its strong performance by increasing penetration in south and west and is likely to benefit from premiumisation.
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