Relaxo Footwears declines after weak Q1 performance

Relaxo Footwears slipped 2.37% to Rs 848.10 after the company reported 21% fall in net profit to Rs 44 crore in Q1 FY25 from Rs 56 crore in Q1 FY24.

Revenue from operations rose by 1% year-over-year (YoY) to Rs 748 crore during the period under review.

EBITDA declined by 8% to Rs 99 crore in Q1 FY25 from Rs 108 crore recorded in Q1 FY24. EBITDA margin was in June24 quarter was 13.2% as against 14.6% in June23 quarter.

Ramesh Kumar Dua, chairman and managing director, said: "The company reported nominal revenue increase during the quarter, largely due to weak consumer sentiments driven by election related disruptions and severe heat conditions in many parts of India.

We operate in a labour intensive industry which was impacted by an abnormal increase in minimum wages as mandated by the government. We decided not to pass on the higher costs to consumers in the current subdued market conditions, which has impacted profitability in this quarter. Capex incurred to manufacture higher volumes in the future have also led to higher depreciation expenses in this quarter.

We have undertaken major sales transformation initiatives to enhance our connect with distributors, retailers and consumers, and with a favourable monsoon expected, we are optimistic about sales growth in the coming quarters. The company is undertaking cost optimization initiatives which will help to improve overall performance of the company during this year."

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

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