Relaxo Footwears Q2 Review - Growth Story Intact Despite Near-Term Margin Headwinds: ICICI Direct
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ICICI Direct Report
Relaxo Footwears Ltd.'s revenue came in line with estimates, profitability was below our estimates owing to lower than anticipated Ebitda margins.
Post demand disruption in Q1, Relaxo Footwears displayed a strong comeback with healthy topline growth of 24% YoY to Rs 714.4 crore (two year compound annual growth rate: 7.2%).
On account of input cost inflation and a significantly higher base, gross margin contracted 660 basis points YoY (flattish QoQ) to 54.8%.
Higher-than-expected other expenses resulted in subdued Ebitda margins of 16.4% (down 560 bps YoY) versus consensus estimate of ~18.5%.
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