RELAXO FOOTWEARS LTD.-$ - 530517 - Announcement under Regulation 30 (LODR)-Newspaper Publication
Newspaper Advertisement regarding loss of share certificates20-06-2019
20-06-2019
Relaxo takes on Bata with celebrity endorsements
By Suhani Adilabadkar The challenger to Bata and the second largest player in the organized footwear industry, Relaxo Footwear has transformed itself from being a high-volume mass brand to a strong celebrity endorsed fashionable footwear. The stock price has also moved along with its strong success story challenging market leader BATA, doubling over the past one and half years. Still behind Bata at a fair distance, Relaxo has lot of catching up to do in the second largest footwear market in the world. Quick Takes Relaxo Footwear (which is in 12 stock screeners) has transformed itself from being a high-volume mass brand to a strong celebrity endorsed fashionable footwear. From Hawai chappals, Relaxo climbed value chain ladder with Flite, Sparx, Bahamas, Boston, Schoolmate, Mary Jane and Elena. Relaxo grew at a CARG of 30% during 2006-2012 and touched Rs. 1000 cr revenue mark in 2013. Relaxo stock price has doubled over the past one and half years. EBIDTA for Relaxo took a hit in the March quarter of FY19, on account of higher raw material cost, escalating 37% YoY and impacting margins which declined 259 bps YoY RELAXO The Relaxo brand was launched in 1976 and the company later incorporated in 1984, becoming over the next few decades a well known footwear brand in India, Relaxo produces over 6 lakh pairs of footwear every day through nine manufacturing facilities and boasts one of the strongest distribution networks, comprising 50,000 retailers/MBOs, 330 EBOs, 800 distributors and exports to 28 countries. Beginning with Relaxo rubber/EVA slippers, the company moved up the value chain by adding fashionable footwear ‘Flite’ and ‘Sparx’ sportswear in 2005 and later stacking up its defence in the organized footwear industry by foraying into Men’s formals through ‘Boston’, launching ‘Schoolmate’, schoolkids footwear and ‘Mary Jane and Elena’ for women. The company sells more than 16 crore pairs a year across 10 different brands and 6000 SKUs competing both with the unorganized sector and the MNCs. March Quarter FY19 Relaxo maintained its double-digit revenue growth trajectory in the March quarter, rising 14% YoY and 15% sequentially. Revenue for Q4 FY19 stood at Rs. 636 cr against Rs. 557 cr corresponding quarter previous year mainly driven by double digit volume growth. EBIDTA at Rs. 95 cr declined 3% YoY on account of higher raw material cost escalating 37% YoY impacting margins which declined 259 bp YoY. Sequential growth was robust with 30% jump and margin expansion of 180 bp as raw material cost was relatively benign with just 10% rise QoQ. Consequently, PAT was also impacted coming out at Rs. 54 cr with just 2% YoY rise and registering strong sequential growth of 53% supported by both lower raw material cost and finance costs declining 30% YoY. Relaxo has fared better than Bata in the March quarter, which reported 7% YoY revenue increase and negative sequential growth of 13% for Q4 FY19. On profitability front though Bata reported stronger YoY growth of 69% but with sequential deceleration of 14% in quarter ended March quarter FY19. Relaxo v/s Bata Bata is still batting on the front foot mainly due to its inherent strengths such as a distribution network of 1300 EBO stores, strong brand recall, higher pricing power, complete debt free status and lower vulnerability to raw material fluctuations. All this leads to premium pricing with the stock currently at its 52-week high, having multiplied investor wealth two and a half times over the past three years. So, against this behemoth, where is Relaxo? Relaxo had a rather humble beginning as a trading and marketing footwear company, and is currently producing 6 lakh pairs a day. From being a part of the unorganized sector catering to high volume mass market of ‘Hawaii chappals’, Relaxo moved up the value chain introducing ‘Sparx’, ‘Bahamas’ and ‘Flite’, high margin products servicing upper middle-class segments and expanding its horizons with Schoolmate, Mary Jane and Casualz brand. Relaxo grew at a CARG of 30% during 2006-2012 and touched Rs. 1000 cr revenue mark in 2013. The score doubled in the next five years with Revenues of Rs. 2300 cr against Bata’s annual sales of Rs. 2997 cr in FY19. Though still at a fair distance with respect to profitability which is half of BATA in FY19, Relaxo is the only one getting closer to the MNC footwear giant, whereas other peers like Liberty Shoes, Mirza International, Khadim India languish at lower strata of valuation in the second largest footwear Industry in the world. Relaxo which was once valued lower than Liberty shoes has worked its way up to challenging Bata with its strong growth zeal and aggressive sales & promotion drive. Bata is still struggling to shed its school image which drives its sales and ensures that its June quarter consistently being its best performance round the year. Relaxo on the other hand has a wider product profile, from Hawaii chappals to formal men and women’s wear, trendy and fashionable casual footwear, school shoes and ‘Sparx’ which has given it a foothold in sportswear segment competing with MNCs whereas BATA has not been able to create any magic in this segment over the past eight decades. Sparx has created a market in south India for Relaxo and is the fastest growing brands for the company apart from ‘Flite’ and ‘Bahamas’. The company adopted both ‘Push and Pull strategy’ after FY12 for higher product visibility by endorsing its product line through various Bollywood celebrities. It was Salman Khan for mass product Hawaii chappals, Akshay Kumar for Sparx and Shruti Hassan for southern market. This varied and differentiated promotional strategy worked in highlighting Relaxo’s product mix, more varied than the local brands and more affordable than the MNCs. In addition to that, product placement through 50,000 MBOs also worked in their favour with lower capex and maintenance costs though the company with its 330 EBOs has plans to expand through franchisee model. Ramesh Kumar Dua, MD, Relaxo Footwear said, “Last year, we did experiment on franchise. It has worked well. So, we will continue with the same intent and speed, so I think we are getting overall good response in this franchisee route”. And online sales contribution is also meaningful to the overall revenue kitty, roughly 6-7% of top-line. Though Relaxo’s profitability has strong co-relation with raw material prices and rupee depreciation, the management seems to be working on other aspects like debt reduction and from a debt equity ratio of 1 in FY 14, the current ratio is as low as 0.07 as on 31st March FY19 with nil long term debt. Relaxo has streamlined its product portfolio and shifted its focus from category led to a geography led distribution strategy to enter new territories and give Relaxo, a complete pan India presence. In this respect, Gaurav Dua, Executive Vice President – Marketing, Relaxo said, “Each brand has different market, so we are currently as a company very strong in north and east part of India and for Sparx brand we are doing very well in south and west. So, every year we try to acquire new customers in new territories, so our efforts are still on for covering the west market for other two brands that is Bahamas and Flite and to spread Sparx in East India also. This is an ongoing process which takes time and we are taking step every year to improve our distribution in these states”. To implement this, company capex plans have an allocation of Rs. 80 cr in the next two years. So optimistic long term value investors can wait for David to take on Goliath with some Sparx.20-06-2019
Relaxo Footwears Ltd - 530517 - Compliances-Reg. 39 (3) - Details of Loss of Certificate / Duplicate Certificate
Information regarding loss of share certificates18-06-2019
Relaxo Footwears Ltd - 530517 - Announcement under Regulation 30 (LODR)-Newspaper Publication
Newspaper Advertisement for fixation of Record Date i.e. Thursday, June 27, 2019 to determine eligible shareholders entitled to receive the Bonus Shares.17-06-2019
Relaxo Footwears Ltd - 530517 - Announcement under Regulation 30 (LODR)-Amendments to Memorandum & Articles of Association
Intimation under regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Alteration in Memorandum of Association (MOA) and Articles of Association (AOA) of the company15-06-2019
Relaxo Footwears Ltd - 530517 - Intimation Of Record Date For Issue Of Bonus Shares
Intimation of Record date for issue of bonus shares15-06-2019
Relaxo Footwears Ltd - 530517 - Disclosure of Voting results of Postal Ballot (Regulation 44(3) of SEBI (LODR) Regulations, 2015)
Relaxo Footwears Ltd has informed BSE regarding the details of Voting results of Postal Ballot, under Regulation 44(3) of SEBI (LODR) Regulations, 2015. Kindly Click here15-06-2019
Relaxo Footwears Ltd - 530517 - Voting Result And Scrutinizer''s Report On Postal Ballot
Voting Result and scrutinizer''s report on Postal Ballot for amendment in MOA. AOA & issue of Bonus Shares. Also attached Voting results pursuant to Regulation 44(3) of SEBI (LODR)15-06-2019
RELAXO FOOTWEARS LTD.-$ - 530517 - Submission Of Disclosure On Related Party Transactions For Period Ended March 31, 2019, Pursuant To Regulation 23(9) Of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015
Submission of disclosure on Related Party Transactions for period ended March 31, 2019, pursuant to Regulation 23(9) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 201501-06-2019
RELAXO FOOTWEARS LTD.-$ - 530517 - Reg.24(A)-Annual Secretarial Compliance
Annual Secretarial Compliance Report Sr. No. Particulars Details 1Period for which the report has been issued 31/03/2019 2Date of Report29/05/2019 3 Name of the Certifying Firm Vivek Arora 4 Name of the Certifying Individual Vivek Arora 5Membership TypeACS 6 Membership Number 12222 7 CP No. 8255 8 Whether any observations/qualification reported by the Secretarial Auditor ? NO29-05-2019