Q2FY23 Quarterly Result Announced for Relaxo Footwears Ltd.
Footwear company Relaxo Footwears announced Q2FY23 results: Q2 FY23: Revenue at Rs. 670 crores as compared to Rs. 714 crore in Q2FY22. This was a result of the decline in volumes of the categories serving the mass segment who were under inflationary pressures with reduced affordability. EBITDA is at Rs. 59 crore as compared to Rs. 117 crore in the corresponding period of the previous year. EBITDA was under pressure due to high raw material prices. EBITDA margin declined by 748 bps to 8.9% in Q2FY23 from 16.4% in Q2FY22. Profit at Rs. 22 crores declined by 67.4% YoY as compared to Rs. 69 crores in Q2 FY22. H1 FY23: Revenue at Rs. 1,337 crore in H1FY23 as compared to Rs. 1,212 crore in H1FY22 EBITDA at Rs. 146 crore in H1 FY23 as compared to Rs. 183 crore in H1FY22 Profit after Tax at Rs. 61 crore as compared to Rs.100 crore in the corresponding period of H1FY22 Commenting on the results and performance, Mr. Ramesh Kumar Dua, Managing Director said: The Company’s performance in the quarter is subdued due to a decline in the volume of categories serving the masses. The consumers were facing inflationary pressures which affected their affordability and they had started moving to cheaper alternatives even at the cost of quality. Hence, the Company took an aggressive price correction in September 2022, to be competitive in the market. In addition to this, we have been witnessing very high volatility and unpredictability in the raw material prices, most of which are imported. Due to the long supply chain, the Company maintains sufficient inventory to ensure there are no disruptions in the manufacturing process. Hence, there is a time lag for the costs to influence the pricing. While this is beneficial during the increasing trends of material prices, it affects negatively when the trend reverses and prices start falling. In the last few months, there was a sudden fall in a few of the key raw material prices, So the Company took corrective price revisions, further impacting the margins. This price rationalization approach has been welcomed by trade and consumers which would help us to clear high-value inventory in Q3FY23, ultimately improving our volume numbers. The company’s efforts towards cost optimization by focusing more on in-house manufacturing and product premiumization with the launch of new products & ranges and e-commerce initiatives will aid us in capturing the increasing close footwear demand. This quarter has performed well in the other higher-value categories, both in values as well as volumes. The Company would continue to focus on these categories. Further, the management is keeping a close watch on the pricing trends to ensure timely corrective actions. With our strong fundamentals aided by a wide distribution reach, strong brand recall, a wide variety of SKUs, in-house manufacturing, and better sourcing capabilities, we are optimistic that the company will overcome this temporary phase and help deliver steady revenue growth in both domestic and export markets in the future. Result PDF02-11-2022
