Relaxo Footwears Limited Conference Call Summary (May 10, 2024)
Q4 and FY24 Financial Results
• Q4 Revenue: Rs. 747 crores (down 2.3% YoY)
• Q4 EBITDA: Rs. 120 crores (up 2%); EBITDA margin at 16.1%
• FY24 Total Revenue: Rs. 2,914 crores (up 4.7%)
• FY24 EBITDA: Rs. 407 crores (up 21.1%)
• PAT: Rs. 200 crores (up 29.8%)
Strategic Initiatives
• Focus on regaining market share and net debt-free status.
• Investments in manufacturing capacity, including land acquisition in Rajasthan.
• Confidence in future growth due to BIS standards implementation.
Q&A Highlights
• Import Restrictions: Minimal impact as imports are only 5%-6% of consumption.
• Return on Equity (ROE): Currently 8%-10%, with expected improvements.
• Receivables Increase: Attributed to subdued market demand and slower payments.
• Footwear Demand Outlook: Sports footwear growing faster; closed footwear facing competition.
Market Share and Growth Projections
• Record sales in open footwear; value-based market share increase confirmed.
• Optimistic for double-digit growth supported by strategic initiatives.
• Sustainable EBITDA margins projected at 15%-16%.
Gross Margin and Pricing Strategy
• Gross margin improvement through moderate price increases and enhanced product quality.
• Sportswear contributes over Rs. 400 crores to Sparx revenue.
Supply Chain and Pricing
• Consistent sourcing of raw materials from India; no significant challenges.
• Moderate production cost increases passed onto consumers.
• Expected improved demand for closed footwear as inflation eases.
Sales Transformation and E-commerce
• Plans to increase Exclusive Brand Outlets (EBOs) by 50-60, totaling over 400.
• E-commerce sales represent 9-10% of total sales, with a focus on price control.
• Premium brand Sparx accounts for one-third of total sales.
Future Growth Strategy
• Targeting growth across all sales channels: EBOs, e-commerce, and exports.
• Emphasis on competitive pricing and inventory management.
• Commitment to adapt strategies based on market conditions.

Relaxo Footwears Limited Q2 FY24 Earnings Conference Call Summary
Key Management Participants
• Managing Director: Mr. Ramesh Kumar Dua
• Chief Financial Officer: Mr. Sushil Batra
Financial Performance
• Q2 Revenue: Increased by 7% to Rs. 715 crores
• EBITDA: Grew by 54% year-on-year to Rs. 92 crores (margin: 12.8%)
• Profit After Tax (PAT): Nearly doubled to Rs. 44 crores (PAT margin: 6.2%)
• First Half FY24 Revenue: Rose 9% to Rs. 1,454 crores
Strategic Focus
• Emphasis on premiumization and expanding distribution channels (including e-commerce)
• Anticipated double-digit revenue growth in H2 FY24
• Expected EBITDA margins to improve to over 14%
• Current capacity utilization at 63%, aiming for 65%
Market Insights
• Growth Potential: Plans to reach Rs. 1,000 crores in 2-3 years despite market challenges
• Market Share: Regained volume in open footwear with 27% growth in H1
• Premium Segment: Long-term goal to increase contribution from premium products
Regulatory and Raw Material Updates
• New BIS standards expected to benefit organized players
• Raw material prices have stabilized, with gradual gross margin improvement anticipated
Pricing and Distribution
• Maintains a single price point across all sales channels
• Plans to expand distribution from 65,000 to 100,000 outlets
Product Performance
• EVA and PU products: Both showing equal growth
• Hawaii and Bahamas brands: Over 20% volume growth; Sparx brand facing seasonal pressure
Management Changes and Operational Strategies
• Confirmation of top management roles; Shravan Kumar Singh remains as New Product Development Head
• Ongoing monitoring of sales operations with visits to 60,000 outlets monthly
Future Outlook
• Cautious optimism for demand recovery during the festive season
• Focus on DMS 2.0 implementation to manage inventory and align schemes
• Export revenue stable at around 4%, with online sales at approximately 12% of revenue
Conclusion
• Management remains focused on premiumization and adapting strategies to navigate current market challenges while maintaining growth expectations.

Relaxo Footwears Limited Q4 and FY 2023 Earnings Conference Call Summary
Financial Performance
• Q4 FY '23 Revenue: INR 765 crores (10% YoY increase, 12% QoQ growth)
• Full Year Revenue: INR 2,783 crores (5% increase YoY)
• EBITDA: INR 118 crores (15.4% margin); Full year EBITDA: INR 336 crores (decline due to high raw material costs)
• Debt Status: Company is debt-free
Management Insights
• Future Demand: Optimistic, especially in open footwear segment
• Sportswear Growth Target: Increase revenue from INR 400 crores to INR 1,000 crores in 2-3 years
• Market Share Recovery: Regaining lost market share post-COVID
Geographic Revenue Breakdown
• North India: 44%
• East India: 22%
• West India: 20%
• South India: 15%
Capacity and Retail Expansion
• Retail Outlets: Plans to increase from 400 to 465
• New Stores: Targeting 60-70 new stores annually
• Current Capacity: 10 lakh units per year, sufficient for next two years
Pricing and Market Strategy
• Average Selling Price: Expected stabilization around INR 160-165 per pair
• Promotional Spend: Maintained at 8-9% of sales
• EBO Contribution: Only about 8% of total sales; stagnant count acknowledged
Future Projections
• Return on Equity (ROE): Aiming for 15-20% improvement
• Volume Growth Target for FY '24: 15-20%
• E-commerce Contribution: Currently 11%, with plans for expansion
Challenges and Considerations
• Demand Environment: Challenging, particularly in rural areas
• Pricing Pressures: Addressed through Distributor Management System (DMS) rollout
• EVA Pricing: Stable around INR 150-160, no expected volatility
Conclusion
• Management expressed optimism for future performance and acknowledged the need for improved investor engagement.

Relaxo Footwears Limited Q4 and FY 2023 Conference Call Summary
Financial Results
• Q4 FY '23 Revenue: INR 765 crores (10% YoY increase, 12% QoQ growth)
• Full Year Revenue: INR 2,783 crores (5% increase YoY)
• EBITDA: INR 118 crores (15.4% margin); Full year EBITDA: INR 336 crores (decline due to high raw material costs)
• Debt Status: Company is debt-free
Market Performance
• Market Share: Regaining lost market share with positive momentum
• Demand Challenges: Particularly in rural areas; inflation stabilizing may improve demand
• Geographical Revenue Contribution: North (44%), East (22%), West (20%), South (15%)
Pricing and Capacity
• Pricing Strategy: Recent price cuts made products competitive; no further reductions expected
• Capacity Expansion: Completed previous year’s plans; focus on maintenance and backward integration
• Retail Outlets: Aim to increase from 400 to 465
Sales and Volume Insights
• Average Selling Prices: Decrease due to price corrections; stabilization expected around INR 160-165 per pair
• Volume Growth: Anticipated double-digit growth for the year
• Return on Equity (ROE) and Return on Capital (ROC): Targeting 15-20% in coming years
Export and E-commerce
• Exports: Account for 4-4.5% of total revenue; growth expected in international markets
• E-commerce Contribution: Currently 11% of sales; plans to expand to new platforms
Exclusive Brand Outlets (EBOs)
• EBO Expansion: Expected addition of 60-70 stores annually; focus on efficiency
• EBO Margins: Lower than company average but in high single-digit range
Management Responses
• Product Mix vs. Price Cuts: Complexity in quantifying impacts; significant price cuts in open footwear confirmed
• Promotional Strategies: Tailored to market conditions; maintaining A&SP spend of 8-9%
• Distributor Management System (DMS): Full implementation expected by year-end
Future Outlook
• Sustainability of Margins: Aiming for stable 15-16% EBITDA margin while remaining competitive
• Long-term Vision: Projecting double-digit growth in closed footwear and increased share in sports footwear
Conclusion
• Management expressed optimism about future demand and growth strategies, thanking participants for their engagement.