Relaxo Footwears Limited , a leading Indian footwear manufacturer, has released its financial results for the second quarter, revealing a mixed performance amidst challenging market conditions.

Revenue and Profitability

For the quarter ended September 30, Relaxo Footwears reported a revenue of ₹628.54 crore, marking a 7.48% decline from ₹679.37 crore in the same period last year. The company's profit after tax (PAT) also saw a slight decrease, dropping to ₹36.16 crore from ₹36.73 crore year-on-year, representing a 1.55% decline.

Half-Year Performance

Looking at the half-year results, Relaxo's revenue fell to ₹1,283.03 crore from ₹1,427.56 crore in the previous year, a 10.12% decrease. However, the company managed to improve its half-year profit to ₹85.06 crore from ₹81.10 crore, showing a 4.88% increase despite the revenue challenges.

Financial Highlights

Here's a breakdown of key financial metrics for Q2:

Operational Performance

The company's operational efficiency remained relatively stable, with the EBITDA margin showing a slight improvement of 1 basis point year-on-year, reaching 12.91%. This suggests that Relaxo has been able to maintain its operational efficiency despite the revenue decline.

Market Challenges and Company Response

The decline in revenue may be attributed to challenging market conditions in the footwear sector. However, Relaxo Footwears has demonstrated resilience by maintaining its profit margins and even improving them slightly. The company's ability to increase its half-year profit despite lower revenue indicates effective cost management and operational optimization.

Balance Sheet and Liquidity

As of September 30, Relaxo Footwears maintained a strong balance sheet with total assets of ₹2,870.15 crore. The company's liquidity position remains solid, with cash and cash equivalents of ₹1.33 crore and investments of ₹422.31 crore (including current and non-current investments).

Future Outlook

While the company faces headwinds in terms of revenue growth, its ability to maintain profitability and improve margins in a challenging environment may be seen as a positive sign. Investors and analysts will likely be watching closely to see how Relaxo Footwears navigates the market conditions in the coming quarters and whether it can return to revenue growth while maintaining its improved profit margins.

As the footwear industry continues to evolve, Relaxo's strong market position and financial stability may provide it with the resources needed to adapt to changing consumer preferences and market dynamics.

Relaxo Footwears , India's largest footwear manufacturer, reported a 15% year-on-year decline in net profit to ₹170.33 crores, down from ₹200.47 crores in the previous year. The company's revenue from operations also decreased by 4.3% to ₹2,789.61 crores compared to ₹2,914.06 crores in the previous fiscal year.

Financial Performance

• Net Profit: ₹170.33 crores (15% decline)
• Revenue: ₹2,789.61 crores (4.3% decrease)
• EBITDA: ₹382.00 crores (down from ₹406.59 crores)
• EBITDA Margin: 13.69% (compared to 13.95%)
• Footwear Sales: 17.75 crore pairs (down from 19.49 crore pairs)

The company cited challenging macroeconomic conditions, weak consumer sentiment, and muted discretionary spending as factors affecting its performance.

Dividend

Despite the challenging year, the Board of Directors has recommended a final dividend of ₹3 per equity share (300%), subject to shareholders' approval.

Operational Highlights

• Launched over 275 new footwear designs
• Successfully deployed and scaled up the 'Relaxo Parivaar' App, onboarding over 70,000 retailers
• Expanded distribution network by adding new distributors
• Supported 25,000+ multi-brand retail outlets with in-shop branding and point-of-sale materials
• Grew retail presence to 418 Exclusive Brand Outlets

Manufacturing and Efficiency Initiatives

Relaxo implemented several measures to enhance manufacturing efficiency and reduce costs:

• Introduced advanced textile cutting and pattern-stitching machines
• Upgraded testing capabilities at its Innovation Centre
• Undertook energy conservation initiatives

Exports

• Presence in over 30 countries across six continents
• Awarded the No. 1 Exporter Award in the Non-Leather Footwear category by the Council for Leather Exports

Outlook

While acknowledging near-term challenges, Relaxo remains cautiously optimistic about gradual recovery in consumer demand. The company plans to focus on innovation, premium products, and strengthening its distribution network to drive growth.

Ramesh Kumar Dua, Chairman & Managing Director, commented: "This was a year of consolidation for Relaxo. While our top line was impacted by muted demand in the mid-range footwear segment and internal restructuring of our distribution model, we have undertaken strategic interventions aimed at setting the business on a stronger, more agile footing for long-term growth."