Relaxo Footwears inches up after decent Q1 result

Relaxo Footwears was up 1.26% to Rs 433 at 11:17 IST on the BSE after net profit rose 8.3% to Rs 49.75 crore on 15.4% rise in net sales to Rs 648.30 crore in Q1 June 2019 over Q1 June 2018.

The result was announced on Saturday, 3 August 2019.

Meanwhile, the S&P BSE Sensex was down by 663.45 points or 1.79% at 36,454.57.

On BSE, 694 shares were traded in Relaxo counter, compared to a 2-week average of 4039 shares. The stock hit an intraday high of Rs 433.4 and an intraday low of Rs 424.75. It hit a 52-week high of Rs 497 on 2 July 2019 and a 52-week low of Rs 333 on 12 October 2018.

Revenues growth was mainly driven by favourable product mix and an increase in volumes.

The company's earnings before interest tax depreciation and amortization (EBITDA) increased 28% to Rs 106 crore in Q1 June 2019 from 83 crore in Q1 June 2018. The EBITDA margin grew to 16.4% in Q1 June 2019 from 14.7% Q1 June 2018.

Commenting on company's Q1 performance, Ramesh Dua, managing director said, The advantage of softening in raw material prices in this quarter got offset by increase in minimum wage rates. The growth in operating profits could not be mirrored in profit before tax due to change in accounting standard which led to increase in non-cash expenses. We are continuously focusing on increasing our presence in untapped markets by improving supply chain and strengthening our presence in our strong markets, domestic & international by assessing customer preferences and price positioning. Creating long term value for our shareholders is a committed goal.

In a separate announcement, the company reported that it has proposed to increase the capacity of Bhiwadi plant, Rajasthan plant. The company is proposing to add capacity of 1.00 Lakh pairs. The capacity will be added in three years with a total investment of Rs 90 crore for the installation of plant.

Relaxo Footwears is engaged in production of Hawaii slippers, light weight slippers, canvas shoes, PVC footwear etc.

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