You are here: Home » News-CM » Equities » Hot Pursuit
Business Standard

Relaxo Footwears declines as lockdown impacts overall demand

Topics
Business Finance

Capital Market 

Relaxo Footwears fell 2.62% to Rs 643.80 after the company said its profits have been adversely affected due to lockdown.

The footwear maker said manufacturing and sales operations were shut down in last few days of March and April 2020 due to nationwide lockdown. The overall demand of footwear decreased substantially, but due to easing lockdown restrictions, demand for open slippers has improved. Due to limited operations, fulfilling the demand will be a challenge.

In lockdown 3, the company started manufacturing in two plants with limited volume. In lockdown 4, the firm started four more plants with reduced restrictions. It is in the process of starting operations in remaining manufacturing plants.

There is no impact on capital and financial resources and the utilization of working capital is well within limits. However, the profits have been adversely affected due to lockdown. The exact impact on profitability is yet to be determined as on date.

There has been constant improvement in collection and the firm is also making regular payments to vendors. The company has no long term debt and other financial arrangement, except working capital limits.

The company said it sees no immediate impairment requirement for any assets due to Covid-19. The firm has taken a cautious view on new assets and capital expenditure. Meanwhile, it has not faced any inbound supply chain problem while outbound supply chain was marginally affected.

On a standalone basis, Relaxo's net profit jumped 52% to Rs 54.16 crore in Q3 December 2019 from Rs 35.62 crore in Q3 December 2018. Net sales for the period stood at Rs 599.83 crore, rising 8.8% YoY.

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

Powered by Capital Market - Live News

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, May 27 2020. 11:41 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU