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Relaxo Footwears LtdQ4 FY23

Relaxo Footwears Ltd Q4 FY23 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

No

0 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3
  • Volume growth target for FY '24 is double-digit, with a safe assumption around 15%.
  • The company aims to maintain at least double-digit volume growth over the next 5 years.
  • Expectation of overall shoe business share increasing, especially in athleisure and sports footwear, targeting around 30% share in shoes.
  • Going forward, export growth is expected to sustain double-digit growth.
  • Retail expansion planned with increase in exclusive brand outlets (EBOs) from 400 to around 465 in the current year, with ongoing expansion momentum.
  • No further significant price hikes anticipated; pricing expected to remain stable.
  • Capacity expansion last year completed; current investments focused on repairs, moulds, and backward integration to support growth.
  • Management is optimistic about regaining and expanding market share across both open and closed footwear categories.

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

Fundraise plans

  • There is no mention of any current or planned fundraising through debt or equity in the call transcript.
  • The company stated that it is now a debt-free company with robust cash flow from operations.
  • Capex plans for the current and next year are routine and related to molds, repairs, and infrastructure; no major capacity expansion or large capex requiring external funding is planned.
  • Management emphasized focusing on operational efficiency and sustaining growth without indicating any intention to raise capital through debt or equity.

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

Capex plans

No
  • Last year, Relaxo Footwears expanded capacity to meet demand.
  • For FY 2024, no major capacity expansion planned; focus is on routine capex.
  • Routine capex includes molds, repairs, backward integration, and infrastructure creation.
  • Current capacity is sufficient to meet demand for the next 2 years.
  • Investment is ongoing in technology (DMS 2.0) implementation across distributors to control infiltration; full implementation expected by year-end.
  • No plans for new brand launches; focus remains on existing brands and price segmentation.
  • Capex spent last year was around INR 174 crores.
  • Strategic investment is oriented towards maintaining manufacturing capabilities and improving efficiency rather than large-scale new expansions.

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Margin guidance

Category 3
  • Targeting double-digit volume growth for FY '24, with around 15% volume growth expected. (Page 20)
  • Price levels are expected to stabilize with no significant volatile moves anticipated. (Page 20)
  • EBITDA margins currently aimed at 15-16%, with potential for improvement through better efficiency and cost control. (Page 15)
  • Management cautious to balance margin improvement with maintaining competitiveness and market share. (Page 15)
  • Profitability and ROE expected to improve over the next 2-3 years after a tough FY '23 and increased capex. (Page 7)
  • Expansion in EBO retail outlets planned to continue, supporting sales growth and margin sustainability in the medium term. (Pages 9, 12)
  • Overall, management optimistic about demand and growth prospects with strong operational cash flows and strategic positioning. (Page 4)

Order book

The transcript provided does not contain any specific information about Relaxo Footwears Limited's current or expected order book or pending orders. There is no direct mention or discussion about order backlog or pending orders during the Q4 & FY23 results conference call held on May 12, 2023. The focus of the discussion revolves around market share, pricing, raw material costs, volume growth targets, demand outlook, and BIS implementation impact on the unorganized sector. Therefore, no data is available regarding order books or pending orders from the provided pages.

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