Arthneeti
Relaxo Footwears LtdQ4 FY22

Relaxo Footwears Ltd Q4 FY22 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹325P/E: 43.6Market Cap: ₹8.1K CrSector: Consumer Durables

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3
  • Growth in two key geographies (West and South) is expected but uncertain whether combined contribution will rise to 40%-45% in 2 years or remain around 30%-35%.
  • Volume decline witnessed in FY22 due to inflation and price hikes impacting demand, especially in rural areas, with purchase delay from customers holding old slippers.
  • Recovery in volume and demand expected from Q2 FY23 onwards as channel inventory stabilizes and new pricing gets absorbed.
  • Sportswear and athleisure segment showing good growth, in line with industry trends, with increased A&P spends and online channel expansion planned.
  • Online sales contribution increasing (11.5% currently), with cautious optimism on rising further though 15% in 1 year is challenging.
  • Consumer demand pressure due to inflation expected to ease gradually, enabling better volume growth post Q1 FY23.
  • Continuous distributor network optimization and addition of retail touchpoints, especially in West and South, to support growth.

See what Relaxo Footwears Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

  • There is no mention of any current or future fundraising through debt or equity in the transcript on page 17 or surrounding pages.
  • The company discussed capital expenditure plans but indicated these will be funded through internal accruals and cash generated from operations.
  • They reported generating Rs. 140 crores cash from operations in FY22 and spending Rs. 140 crores on CAPEX, showing a balanced cash flow without implying external fundraising needs.
  • Management showed focus on cautious optimism amid inflation and raw material price pressures but did not indicate any plans for raising fresh capital via debt or equity.
  • Overall, no explicit plans or discussions related to new fundraising through debt or equity were highlighted in the call.

See what Relaxo Footwears Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes
- Relaxo Footwears spent around INR 140 crores in CAPEX during FY22. - There is no intent to spend on expansion in the South specifically. - The company is expanding capacity in the North where it has its own setup. - The focus is on integrating backend operations. - Intent to spend around INR 100 crores in the current year, mainly for backend operations. - Capacity utilization is around 65% of daily capacity of 10 lakh pairs; focus on freeing capacity in shoe division. - The company is cautious about extraordinary inflation but remains optimistic for future growth. Overall, the CAPEX is primarily targeted at capacity expansion and backend integration, with no major new geographic expansion planned at this time.

Track Relaxo Footwears Ltd — get its next earnings analysis in your feed

Margin guidance

Category 3
  • Management is cautiously optimistic about growth post-Q1 FY23, expecting recovery from Q2 onwards as consumer sentiment improves.
  • EBITDA margin target is to revert to FY20 levels (~17%), aiming to maintain sustainable profitability despite raw material inflation.
  • Revenue growth driven by calibrated price increases and focus on premiumization and product mix (notably in sports and closed footwear).
  • Expansion plans include capacity augmentation and increased focus on backend integration to support future scale.
  • Online and e-commerce channels targeted for accelerated growth through increased spend, product launches (SMUs), and new partnerships, with aspirations to grow online share beyond current 11.5%.
  • Distributor network rationalization to focus on quality partners enhancing margins and sales efficiency.
  • Export markets growing, contributing >4% of revenue with potential for further expansion.
  • Long-term commitment to sustainable and profitable growth by balancing price-value equation while managing inflationary pressures.

Order book

The provided transcript from Relaxo Footwears Limited's May 2022 earnings call does not contain specific information regarding the current or expected orderbook or pending orders. Key takeaways relevant to order flow and sales include: - Volume decline noted due to inflation, GST impact, and subdued demand, but no quantification of pending or future orders. - Distributor and retailer inventory adjustments are ongoing due to price increases, with channel destocking mentioned but not quantified. - Growth aspirations in e-commerce and new channel additions are part of the strategy, but no specific order backlog details. - Capacity utilization at 65% with total capacity of 10 lakh pairs per day; no explicit order backlog data. Hence, no explicit data on orderbook or pending orders is disclosed in the transcript on page 17 or surrounding pages.

How does Relaxo Footwears Ltd rank vs peers in Consumer Durables?

Pro feature
ThisRelaxo Footwears Ltd
Rev 3Mar 3
See where Relaxo Footwears Ltd sits in Consumer DurablesSee which companies these are, and every other name in the sector.Open rankings

How does Relaxo Footwears Ltd rank in Consumer Durables?

Compare Relaxo Footwears Ltd against every Consumer Durables company (Q4 FY22) on revenue, margins and earnings-call signals.

View Consumer Durables leaderboard →

Continue your research

What Relaxo Footwears Ltd's management said in earlier quarters

Others in Consumer Durables this season

  • Visdem Technosys (Q1 FY27)

    Q1 FY27 sales grew by approximately 40% year-on-year, driven by 15% price escalation and 25% volume growth. Key concall takeaways from Visdem Technosys Ltd's…

  • Indigo Paints (Q1 FY27)

    EBITDA margins could fluctuate slightly (±1%), but the focus remains on expanding market share and top line. Key concall takeaways from Indigo Paints Ltd's Q1…

  • Focus Lighting & Fixtures Ltd (Q2 FY24)

    Home lighting segment growing rapidly, with year-on-year growth of around 100%, expanding channel partners. Key concall takeaways from Focus Lighting's Q2 FY24…

  • Focus Lighting & Fixtures Ltd (Q3 FY24)

    8 crores to Rs. Key concall takeaways from Focus Lighting's Q3 FY24 earnings call — and how it ranks against sector peers.

Compare:vs Titan Companyvs Asian Paints Ltdvs LG Electronics

🔎 Who's planning the most growth?

Companies ranked by management's own guidance — revenue, margins, capex and order book, from every earnings call in India.

See rankings →