Relaxo Footwears Ltd

Q3 FY22 Earnings Call Analysis

Consumer Durables

Full Stock Analysis
capex: Yesrevenue: Category 2margin: Category 3orderbook: No informationfundraise: No information
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fundraise

Any current/future new fundraising through debt or equity?

- There is no explicit mention of any current or future fundraising plans through debt or equity in the provided transcript of Relaxo Footwears Limited's Q2 FY2023 earnings call. - The company is incurring capital expenditure of around Rs.120 to Rs.140 Crores for FY2023, primarily for capacity expansion and other operational enhancements. - The focus appears to be on capacity expansion (e.g., doubling Sparx footwear capacity) funded through planned Capex rather than new fundraising. - No details or discussion on raising funds via equity issuance or new debt borrowings were reported in the excerpts provided.
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capex

Any current/future capex/capital investment/strategic investment?

- Capex for FY2023 is planned in the range of Rs.120 Crores to Rs.140 Crores. - Orders have already been placed for this Capex, which includes backend operations, molds, and building-related expenses. - The company is doubling Sparx footwear capacity from 50,000 pairs per day to 100,000 pairs per day, which is expected to be operational by April next year. - Investments are primarily aimed at expanding production capacity, especially for the Sparx sports footwear segment. - The focus on capacity expansion aligns with the company's strategy to grow the sports footwear category by over 30% year-on-year.
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revenue

Future growth expectations in sales/revenue/volumes?

- Volumes have stagnated around 17-19 Crores pairs in recent years, partly due to the pandemic's impact on outdoor footwear demand. - Post-lockdown, indoor footwear demand increased significantly, balancing volume trends. - Management expects volume growth to resume in the coming year, aiming to surpass the peak volume of approximately 19 Crores pairs seen in FY2021 by FY2024. - The sports footwear segment (Sparx) is growing strongly at around 30% year-on-year, contributing over 41% of revenue, with expectations of continued robust growth. - Expansion plans include doubling Sparx production capacity to 100,000 pairs per day by April, supporting revenue growth. - The company targets increasing online sales contribution, from current 12% to approximately 15% in 2-3 years, driven largely by online demand for closed footwear. - Overall, management is optimistic about steady revenue growth supported by premium and mid-premium segments, despite challenges in the mass segment.
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margin

Future growth expectations in earnings/operating earnings/profits/EPS?

- Relaxo Footwears expects volume and topline to improve as higher-cost inventory gets cleared by December-March, with new lower price points stabilizing market share. - The sports footwear segment, especially Sparx, is a key growth driver expected to grow at over 30% CAGR over the next 3 years. - Online sales contribution targeted to increase from 12% to around 15% in 2-3 years; Sparx online contribution is currently 20-25% and expected to grow further. - EBITDA margins impacted by raw material volatility; margins are expected to improve from Q4 FY2023 onwards as raw material prices normalize and inventory costings stabilize. - Capacity expansion for Sparx footwear from 50,000 to 100,000 pairs per day by April 2023 expected to support higher volume growth. - Overall, management is optimistic about steady revenue growth and profitability recovery in domestic and export markets going forward.
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orderbook

Current/ Expected Orderbook/ Pending Orders?

The provided transcript and information from the Relaxo Footwears Limited earnings call do not mention any details regarding the current or expected order book or pending orders. There is no discussion on these topics in the available excerpts from the document. If you require detailed information on order books or pending orders for Relaxo Footwears, it might be available in other parts of the company's reports or disclosures not included in the provided pages.