Target: ₹718
CMP: ₹797.35
Relaxo Footwears (RLXF), a Fortune 500 (India) company, has established itself as a pioneer in the mass segment (50 per cent+ share of total footwear industry), open footwear category, offering quality products at affordable prices. The company’s product portfolio includes rubber-based hawai slippers, EVA slippers, PU slippers, casual shoes, sports shoes, sandals, and school shoes across all customer segments in the mass & economy price categories.
Being the market leader in the open footwear category and deriving around 80 per cent revenues from the same has enabled RLXF to capture a volume share of about 7-8 per cent (about 20 per cent share in organised, non-leather footwear). A resurgence in open footwear demand over the last 15-18 months (grown faster than closed footwear) has seen RLXF’s volumes grow by 14 per cent YoY in FY24.
RLXF has built a robust position in the mass open footwear segment with a vast presence covering both trade & D2C channels. Notably, RLXF is the only company among its peers to manufacture 100% of its products in-house. We reckon RLXF should benefit from the premiumization trend with increasing penetration of the “Sparx” & “Flite” brands.
We initiate coverage on Relaxo Footwears Ltd however, owing to premium valuations we assign a Sell rating to the stock.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.