Relaxo falls 3% on weak Q1FY25 results; record date for dividend announced

Relaxo shares drop: Shares of Relaxo Footwears (Relaxo) fell as much as 2.62 per cent to hit an intraday low of Rs 845.75 per share on Thursday, August 01, 2024. 

The fall in the stock price came after the company reported a weak set of June quarter of financial year 2025 (Q1FY25) results.

Relaxo’s profit after tax (PAT) fell 21 per cent on a year-on-year (Y-o-Y) basis to Rs 44 crore in the June quarter of financial year 2025 (Q1FY25), from Rs 56 crore in the June quarter of financial year 2024 (Q1FY24).

However, the revenue from operations, or topline, surged marginally (1 per cent) to Rs 748 crore in the June quarter of FY25, from Rs 739 crore in the June quarter of FY24. 

At the operational level, earnings before interest, tax, depreciation and amortisation (Ebitda), also known as operating profit, dropped 8 per cent on Y-o-Y basis to Rs 99 crore in the June quarter of current fiscal year, from Rs 108 crore in the same quarter a year ago.

Consequently, Ebitda margin squeezed 134 basis points (bps) to 13.2 per cent in Q1FY25, from 14.6 per cent in Q1FY24. 

“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,” said  Ramesh Kumar Dua, chairman and managing director of Relaxo Footwears.

He further said that the company has undertaken major sales transformation initiatives to enhance its connection with distributors, retailers and consumers.

Also, with a favourable monsoon expected, the company is optimistic about sales growth in the coming quarters, he added. 

“The company is undertaking cost optimisation initiatives which will help to improve overall performance of the company during this year,” Dua said.

Additionally, the company has set August 22, 2024, as the record date to determine shareholders eligible for the dividend payment. If the dividend is declared, it will be distributed to eligible shareholders on or before September 27, 2024. 

The company had announced a final dividend of Rs 3 for FY24.

The market capitalisation of KRBL is Rs 21,166 crore, according to Bombay Stock Exchange (BSE). The company falls under the BSE 500 category.

At 11:22 AM, the shares of Realaxo were trading 2.11 per cent lower at Rs 850.25 per share. In comparison, BSE Sensex was trading 0.22 per cent higher at 81,919.91 levels.