Relaxo footwears Limited has announced the cancellation of 2,200 stock options under its Employee Stock Option Plan 2014, following regulatory disclosure requirements. The decision was made by the company's Nomination and Remuneration Committee during its meeting held on January 30, 2026.

Stock Option Cancellation Details

The cancelled options were part of the second phase of RFL Employee Stock Option Plan 2014 and were granted to a single employee. According to the company's disclosure, these stock options had already vested but remained unexercised by the employee within the prescribed period, leading to their automatic lapse under the plan's terms and conditions.

Regulatory Compliance

The cancellation was disclosed to both BSE Limited and National Stock Exchange of India Limited in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure was signed by Ankit Jain, Company Secretary and Compliance Officer, ensuring proper adherence to regulatory requirements.

ESOP Plan Framework

The Employee Stock Option Plan 2014 operates under specific guidelines that govern the vesting and exercise periods for granted options. When employees fail to exercise their vested options within the stipulated timeframe, the options automatically lapse according to the plan's provisions. This mechanism ensures proper management of the company's equity compensation structure while maintaining compliance with established protocols.

Relaxo Footwears , a leading footwear manufacturer in India, reported a 7.5% year-on-year decline in revenue for the second quarter of fiscal year 2026, amid challenges in the mass market segment and GST-related transitions. The company, however, maintained stable margins and expressed optimism about future recovery.

Key Financial Highlights

Revenue Decline and Market Challenges

The company's revenue dropped to ₹629.00 crores in Q2 FY26 from ₹679.00 crores in the same quarter last year. This decline was primarily attributed to:

• Demand softness in the mass market segment
• Delayed purchases ahead of GST 2.0 implementation
• Transition period as the market adjusts to new tax rates

GST Impact and Future Outlook

The implementation of GST 2.0, which reduced tax rates on footwear priced below ₹2,500 from 12% to 5%, is expected to have a positive impact on Relaxo's competitiveness. Management anticipates a gradual recovery starting from Q4 FY26, as:

• Channel inventory normalizes
• The new GST framework enhances competitiveness against unorganized players

Margin Performance

Despite the revenue decline, Relaxo Footwears demonstrated resilience in its profitability:

• EBITDA margin remained stable at 12.9%
• PAT margin improved to 5.8%, up from 5.4% in Q2 FY25

This improvement in profit margins reflects the company's focus on operational efficiencies and cost management during challenging market conditions.

Product Mix and Strategy

Relaxo's management highlighted during the earnings call that:

• Open footwear continues to dominate the product mix, accounting for 80% of sales
• The company is focusing on athleisure and sneakers segments
• Plans are in place to launch premium PU products under the Flite brand

Channel Inventory and Market Dynamics

The company noted that channel partners are currently focused on liquidating old inventory with higher MRPs. Management expects this process to be largely complete by December end or mid-December, after which the full impact of new pricing should be visible in the market.

Conclusion

While Relaxo Footwears faced headwinds in Q2 FY26, the company's ability to maintain margins and its strategic focus on product innovation and market expansion suggest potential for recovery. The implementation of GST 2.0 is expected to level the playing field against unorganized players, potentially driving volume growth in the coming quarters. Investors and market watchers will be keen to observe how these factors translate into performance in the second half of FY26 and beyond.