Mehabe score: 6 G Factor: 6 Piotski Score: 8 The stock has a rating . The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 6 and Piotski score of 8.
Description
Relaxo Footwears Limited is the largest footwear manufacturing company in India, which deals in non-leather products i.e. rubber/EVA slippers, canvas shoes, sport shoes, sandals, school shoes and other types of footwear. It is also the leader in ‘value’ segment footwear.
It has a portfolio of renowned brands like Relaxo, Sparx, Flite and Bahamas. The company sells its products through retailers served through distributors, retail outlets, exports and e-commerce / modern trade.
Main Points
Robust Distribution network
Company has established one of the largest distribution network in the footwear Industry. It’s distriution network comprises 50,000+ retailers, ~700 distributors & ~400 EBOs. #
The largest portion of sales of the company comes from North India which accounts for more than 50% of the revenues.Site:RELAXOMain Symbol:RELAXO
Stock trades at 1155.0, above its 50dma 1112.29. It also trades above its 200dma 926.55. The stock remains bullish on techicals
The 52 week high is at 1272.00 and the 52week low is at 578.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 19.83% CAGR over last 5 years
Weakness
– Stock is trading at 18.25 times its book value
-The company has delivered a poor sales growth of 7.18% over past five years.
-Promoter holding has decreased over last 3 years: -3.33%
Competition
– The industry trades at a mean P/E of 62.2x. Liberty Shoes trades at the industry’s max P/E of 992.72x. RELAXO trades at a P/E of 98.4x
– Industry’s mean G-Factor is 3.7 while the mean Piotski score is 8.0. RELAXO has a G-Factor of 6 and Piotski scoreof 8.
– Average 1 month return for industry is -1.2%. The max 1- month return was given by Mirza Internatio: a return of 14.04 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 748.0 cr compared to Rs 541.0 cr for period ended Mar 2020, a rise of 38.3%
Operating Profits reported at Rs 163.0 cr for period ended Mar 2021 vis-vis 96.0 for period ended Mar 2020 .
Operating Margins expanded 404.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 4.11 compared to Rs 3.63 for previous quarter ended Dec 2020 and Rs 2.09 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2359.0 cr for period ended Mar 2021 vis-vis sales of Rs 2410.0 cr for the period ended Mar 2020, a fall of 2.2%. The 3 year sales cagr stood at 6.7%.
Operating margins expanded to 21.0% for period ended Mar 2021 vis-vis 17.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 292.0 cr for period ended Mar 2021 vis-vis sales of Rs 226.0 cr for the period ended Mar 2020, rising 22.6%.
Company recorded a healthy Net Profit CAGR of 22.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 513.0 cr for period ended Mar 2021 vis-vis Rs 319.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 21.0% compared to 20.0% over the last 3 Years. – The stock has given a return of 92% on a 1 Year basis vis-vis a return of 42% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 29% vis-vis a compounded profit growth of 22% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 3.49% vis-vis 3.88% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 18.25% vis-vis 18.2% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 19.83% CAGR over last 5 years – Stock is trading at 18.25 times its book value
-The company has delivered a poor sales growth of 7.18% over past five years.
-Promoter holding has decreased over last 3 years: -3.33%
