Relaxo Footwears NEUTRAL Performance Highlights

Transcription

2QFY2015 Result Update | Footwear
November 5, 2014
Relaxo Footwears
NEUTRAL
Performance Highlights
CMP
Target Price
Y/E March (` cr)
2QFY2015
2QFY2014
% chg (yoy)
1QFY2015
% chg (qoq)
332
263
26.0
372
(10.8)
37
26
40.5
46
(21.1)
11.0
9.9
114
12.5
(144)
17
12
48.4
23
(25.1)
Total Income
EBITDA
EBITDA margin (%)
Reported PAT
Source: Company, Angel Research
Relaxo Footwears (Relaxo) reported a decent set of numbers for 2QFY2015. The
revenue for the quarter grew by an impressive 26% yoy to `332cr, driven by
volume growth across major brands and by premiumization. With an increase in
traded goods during the quarter, the gross margin declined by 75bp yoy to 56%.
However, owing to lower employee cost and other expenses as a percent of net
sales on a yoy basis, the operating margin improved by 114bp yoy to 11%,
although the same is below our estimate of 12.1%. Further, a decline in interest
outgo and a lower tax rate enabled the company to report a net profit of `17cr,
48.4% higher yoy, but 13.1% lower than our estimate of `20cr.
Product premiumization to drive growth: With steady volume growth through
improving retail distribution and expansion, the company will be able to post a
revenue CAGR of 20.7% over FY2014-16E to `1,756cr in FY2016E. Further,
focus on premiumization of high value products will improve the product mix,
thereby improving realization and margins going ahead. Realization per pair is
expected to improve from `111.8 in FY2014 to `134.5 in FY2016E. The EBIDTA
is expected to grow at a CAGR of 24.1% over FY2014-16E to `216cr in FY2016E,
while the EBIDTA margin is expected to improve by ~67bp over the same period to
12.3%. Resultantly, the company’s profit growth is expected to be higher than revenue
growth. We expect profit to grow at a CAGR of 34.4% over FY2014-16 to `119cr in
FY2016E.
`520
-
Investment Period
-
Stock Info
Sector
Market Cap (` cr)
Beta
Net debt (` cr)
52 Week High / Low
Avg. Daily Volume
Face Value (`)
BSE Sensex
Footwear
3,123
0.1
157
545 / 164
5,617
1
27,916
Nifty
Reuters Code
Bloomberg Code
8,338
RLXO.BO
RLXF IN
Shareholding Pattern (%)
Promoters
75.0
MF / Banks / Indian Fls
0.1
FII / NRIs / OCBs
18.6
Indian Public / Others
6.3
Abs.(%)
3m
1yr
3yr
Sensex
8.0
31.2
59.0
Relaxo
30.6
202.0
523.1
Outlook and valuation: We remain positive on the company with the growth
triggers in place, which include – 1) sufficient capacity to cater to increasing
demand, 2) improving product mix and 3) optimized cost expenses. However, at
the CMP of `513, the stock is trading at 26.3x FY2016E earnings which we
believe is fair, and hence recommend a Neutral rating on the stock.
Key financials
Y/E March (` cr)
Net sales
% chg
Net profit
% chg
EBITDA margin (%)
Adj. EPS (Post stock split) (`)
P/E (x)
P/BV (x)
RoE (%)
RoCE (%)
EV/Sales (x)
EV/EBITDA (x)
FY2012
FY2013
FY2014
FY2015E
FY2016E
860
25.0
40
49.4
10.5
6.7
78.3
18.1
26.0
19.5
3.8
36.3
1,005
16.8
45
12.3
10.4
7.5
69.7
14.6
23.2
17.6
3.3
31.7
1,206
20.0
66
46.5
11.7
10.9
47.6
11.3
26.7
23.1
2.7
23.3
1,462
21.2
89
35.6
12.0
14.8
35.1
8.7
28.0
25.4
2.2
18.3
1,756
20.1
119
33.2
12.3
19.8
26.3
6.6
28.4
28.5
1.8
14.5
Source: Company, Angel Research, CMP as on November 5, 2014
Please refer to important disclosures at the end of this report
Bhavin Patadia
39357800 ext: 6868
[email protected]
1
2QFY2015 Result Update | Relaxo Footwears
Exhibit 1: 2QFY2015 performance
Y/E March (` cr)
Net Sales
2QFY2015
2QFY2014
% chg (yoy)
4QFY2014
% chg (qoq)
1HFY2015
1HFY2014
% chg
332
263
26.0
372
(10.8)
704
576
22.3
28.2
171
(14.5)
25.6
Net raw material
146
114
(% of Sales)
44.0
43.3
31
27
Staff Costs
(% of Sales)
317
252
45.0
43.8
(5.0)
64
58
9.1
10.0
(3.3)
240
197
45.9
14.3
33
22.9
122
9.5
10.4
Other Expenses
118
96
(% of Sales)
35.5
36.4
34.0
34.2
Total Expenditure
295
237
24.4
326
(9.3)
621
507
22.5
37
26
40.5
46
(21.1)
83
69
20.3
11.0
9.9
114bp
12.5
(144)bp
11.8
12.0
(19)bp
4
6
(27.9)
5
(15.1)
9
11
(18.7)
Depreciation
10
7
33.1
10
(4.5)
20
15
39.2
Other Income
2
4
(53.9)
2
11.0
4
6
(36.6)
PBT
25
17
42.7
33
(25.5)
57
49
16.6
(% of Sales)
7.4
6.5
8.2
8.6
7
6
17
16
EBITDA
EBITDA (%)
Interest
Tax
(% of PBT)
8.9
11.9
32.7
8.9
30.6
10
(26.4)
29.8
21.7
6.2
29.4
32.2
29.6
32.5
Reported PAT
17
12
48.4
23
(25.1)
40
33
21.6
PATM (%)
5.2
4.4
79bp
6.2
(100)bp
5.7
5.8
(3)bp
Revenues in line, however margins and PAT disappoint
Relaxo reported a decent set of numbers for 2QFY2015. The revenue for the
quarter grew by an impressive 26% yoy and stood at `332cr, in line with our
expectation of `338cr. With an increase in traded goods during the quarter, the
gross margin declined by 75bp yoy and came in at 56%. However, owing to lower
employee cost and other expenses as a percent of net sales on a yoy basis, the
operating margin improved by 114bp yoy to 11%, although the same is below our
estimate of 12.1%. Further, a decline in interest outgo and a lower tax rate
enabled the company to report a net profit of `17cr, 48.4% higher yoy, but 13.1%
lower than our estimate of `20cr.
Exhibit 2: Actual vs Estimates
Y/E March (` cr)
Net sales
EBITDA
EBITDA margin (%)
Reported PAT
2QFY15
Angel est.
% diff
332
338
(1.8)
37
41
(10.6)
11.0
12.1
(109)bp
17
20
(13.1)
November 5, 2014
2
11.8
14
12.5
11.0
12
25
8
20
6
15
36.6
46.4
43.7
27.9
5
4
26.0
10
(%)
10
2
2QFY15
1QFY15
0
4QFY14
0
3QFY14
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
1QFY14
4QFY14
3QFY13
0
2QFY13
0
5
10.8
8.4
2QFY14
332
372
371
259
263
312
291
223
50
242
100
30
16
EBITDA margin (RHS)
9.9
43.0
10
9.9
1QFY14
150
35
11.0
32.2
15
8.7
9.2
13.8
18.8
200
EBITDA (LHS)
45
2QFY13
250
20
(` cr)
19.1
16.2
50
40
(%)
(` cr)
300
26.0
25
20.6
21.6
30
3QFY13
25.8
350
yoy growth (RHS)
27.3
24.0
Revenue (LHS)
400
Exhibit 4: ...but EBIDTA margin disappoints
4QFY14
Exhibit 3: Impressive sales growth...
Investment rationale
Celebrity endorsement and retail expansion to strengthen brand
visibility
Relaxo has successfully established 'Flite' and 'Sparx' brands, which has enabled it
to gain respectable market share in the specialized high-value products. Post
endorsement by the Bollywood stars - Salman Khan (Hawaii) and Akshay Kumar
(Sparx), the demand for the company’s product offerings has risen. Most of the
revenue growth happened on the back of robust performance displayed by these
brands. Branding has also helped Relaxo push its higher margin products and get
a better price per pair sold. The company continues to invest significantly behind its
brands with the aim of creating brand awareness and enhancing visibility.
Following the strategy, the company has roped in Bollywood star Sonakshi Sinha
as the brand ambassador for Flite. The company is expected to continue its growth
trajectory in the South and West regions of India. The company’s total count of
owned retail outlets as of 2QFY2015 stands at 197.
Breakeven of Relaxo Shoppe and Online presence to aid
profitability
We believe that retail expansion along with brand visibility will help the company
in expanding business. Additionally, the company is aggressively working towards
closing/dislocating non-performing Relaxo Shoppe, which will reduce pressure on
inventory and EBIDTA margin. Also, the retail division rationalization has started
giving positive results on the margin front and we expect most of the retail outlets
to break-even by 2HFY2015, adding directly to the profitability of the company.
Relaxo has also made early strides in the online business and will focus on
enhancing the same, which will aid profitability.
Capacity expansion in place to cater to increasing demand
The company’s business is scalable as it operates in a growing industry dominated
by hundreds of small unorganized players who are gradually losing market share
to the large, organized ones. The company’s production capacity has increased
from 4.54 lakh pairs to 5.35 lakh pairs per day. With the expansion of rubber and
Eva slippers capacity at Bhiwadi and the central warehousing facility at
Bahadurgarh, the company is well poised to cater to growing demand and in turn
November 5, 2014
3
increase its market share. Further, it would help to drive logistics and warehousing
efficiencies in addition to cost savings in rentals. The export market is also
expected to improve, driven by the EU and the US markets on account of signs of
improvement in quality and technology in Indian footwear industry. Presently, India
exports only 5% of its production; thus there is a huge opportunity to enter the
untapped export markets.
Exhibit 5: Market segmentation
Exhibit 6: Unorganised vs Organised footwear market
Kids, 10%
Women, 30%
Organised,
45%
Unorganised,
55%
Men, 60%
Changing revenue mix to drive profit
The company’s product mix over the years has changed, resulting in better top-line
growth along with margin expansion. Flite, Hawaii and Sparx contribute one-third
each to the revenue while the mix is expected to change to ~40%, 25% and 35%,
respectively going ahead; this will help in driving profitability for the company.
Realization has improved from ~`113.1 per pair in 1QFY2015 to ~`122.9 per
pair in 2QFY2015. We expect realization to improve further to ~`128.9 per pair
in 2HFY2015E as compared to `117.5 per pair in 1HFY2015. Thus, we expect
average realization to be `123.1 per pair in FY2015E and improve further to
`134.5 per pair by FY2016E, driven by change in the product mix.
Exhibit 7: Realizations to improve
No. of footwear (LHS)
Average Realizations (RHS)
134.5
65.7
79.5
93.1
100.3
111.8
120.0
100.0
80.0
6.0
60.0
13.06
11.87
10.79
10.02
9.25
2.0
8.66
4.0
8.43
(No. of pairs in crores)
10.0
8.0
140.0
123.1
12.0
160.0
(`)
14.0
-
40.0
20.0
0.0
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015E FY2016E
November 5, 2014
4
New launches across categories
To meet the growing demand and growing fashion-consciousness of consumers,
the company keeps on launching new designs across all brands at regular
intervals. The colorful slippers, Hi-Fashion under Hawaii brand with premium
pricing, have successfully gained attention and demand in the market. We also
believe that the company will be able to maintain its market share in the mass
segment through the Hawaii brand and penetrate further in the lower and
upper-middle class segments through existing products and upcoming launches of
Flite and Sparx brands. Hawaii, being a mass brand, adds to the volume, while
Sparx and Flite help in improving the company’s profitability.
November 5, 2014
5
Financial performance
Assumptions
Exhibit 8: Key assumptions
Assumptions
FY2015E
FY2016E
Volume Growth
10.0
10.0
Realization Growth
10.2
9.2
Ethyl Vinyl Acetate (EVA)
10.0
6.0
Rubber
-4.0
0.0
Change in raw material prices (%)
Source: Angel Research
Exhibit 9: Change in estimates
Y/E March
Earlier estimates
Revised estimates
% chg
FY2015E
FY2016E
FY2015E
FY2016E
Net sales (` cr)
FY2015E
FY2016E
1,439
1,707
1,462
1,756
1.6
2.8
OPM (%)
12.6
12.7
12.0
12.3
(60)bp
(41)bp
Adj. PAT
94.5
122.5
89.0
118.6
(5.8)
(3.2)
Source: Angel Research
As we remain positive on the company’s performance, we revise our revenue
estimates marginally upwards for FY2015E and FY2016E. We expect revenue to
grow at a CAGR of 20.7% over FY2014-16E to `1,756cr, mainly on the back of
the prevailing growth triggers, which include – 1) improving brand visibility and
brand recall, 2) improvement in realizations on the back of a shift in the revenue
mix to higher priced premium products and 3) sufficient capacity to cater to
increasing demand.
15.0
40
Revenue growth (RHS)
7.0
11.1
10.8
9.6
EBITDAM
9.5
9.2
9.2
FY2016E
0
10.0
12.3
FY2015E
9.0
12.0
10.4
FY2013
10
10.5
FY2014
9.9
11.0
FY2012
20
FY2010
1,756
20.1
FY2016E
1,206
FY2014
1,005
FY2013
860
FY2012
688
FY2011
554
Revenue (LHS)
21.2
1,462
20.0
16.8
11.7
FY2011
30
25.0
FY2015E
24.3
13.8
13.0
(%)
35.9
FY2010
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Exhibit 11: Margin to improve with decreasing employee cost
(%)
(` cr)
Exhibit 10: Healthy revenue growth to continue
Emloyee cost/net sales
We expect the margin to improve from 11.7% reported in FY2014 to 12.3% in
FY2016E with improving product mix and portfolio management, implementation
of cost optimization measures, breakeven of most of the Relaxo Shoppe and better
capacity utilization.
November 5, 2014
6
We also expect debt to reduce by 20% in FY2015E and by a further 30% in
FY2016E with the cash flow coming in, thereby adding to profitability. On account
of improved margins, and debt repayment we expect the net profit to grow at a
CAGR of 34.4% over FY2014-16E to `119cr.
Exhibit 12: PATM to improve going forward...
140
6.1
3.9
3.6
4.6
5.4
4.5
5
4
119
89
66
45
40
27
38
17.56
15.02
10.00
FY2011
FY2012
FY2013
FY2014
ROCE (Pre-tax)
PATM
28.46
19.46
14.00
FY2016E
FY2015E
FY2014
FY2013E
FY2012E
FY2011
PAT (LHS)
25.40
23.08
18.00
0
FY2010
0
23.73
20.90
19.84
2
1
24.70
23.14
22.00
3
40
25.04
26.00
6
60
20
7
(%)
(` Cr)
100
80
30.00
8
6.8
120
Exhibit 13: .. leading to improvement in return ratios
FY2015E
FY2016E
ROE
Outlook and valuation
We remain positive on the company with the growth triggers in place, which
include – 1) sufficient capacity to cater to increasing demand, 2) improving product
mix and 3) optimized cost expenses. We expect Relaxo to post a revenue CAGR of
20.7% over FY2014-16E to `1,756cr with an EBIDTA margin of 12.3% in
FY2016E. The profit for the company is expected to grow at a CAGR of 34.4% to
`119cr over the same period. However, at the CMP of `520, the stock is trading at
26.3x FY2016E earnings which we believe is fair, and hence recommend a
Neutral rating on the stock.
Exhibit 14: One-year forward PE
600.0
500.0
(`)
400.0
300.0
200.0
100.0
Price (`)
10x
15x
20x
Oct-14
Apr-14
Oct-13
Apr-13
Oct-12
Apr-12
Oct-11
Apr-11
Oct-10
0.0
25x
November 5, 2014
7
Exhibit 15: Comparative analysis
FY2015E
Mcap
(` cr)
3,123
Sales
(` cr)
1,462
OPM
(%)
12.0
PAT
(` cr)
89
EPS
(`)
14.8
RoE
(%)
28.0
P/E
(x)
35.1
P/BV
(x)
8.7
EV/EBITDA
(x)
18.3
EV/Sales
(x)
2.2
FY2016E
3,123
1,756
12.3
119
19.8
28.4
26.3
6.6
14.5
1.8
CY2014E
8,185
2,338
15.2
224
34.9
23.2
36.5
8.3
13.0
3.4
CY2015E
8,185
2,747
16.4
287
44.8
25.0
28.5
6.9
17.7
2.9
Company
Year end
Relaxo footwear
Bata India*
Source: Company, Angel Research, *Bloomberg
November 5, 2014
8
Risks
Rise in raw material prices and depreciating rupee
A rise in the price of key raw materials – EVA and rubber – can adversely impact
the profitability of the company. Rubber prices have fallen in the last quarter, which
was in favor of the company; however, if they start to head northwards, then the
company’s profitability could get hampered. Also, Relaxo imports its entire EVA
requirement. Any depreciation in the rupee could pose a serious risk to the EBIDTA
margin and thereby impact profitability of the company.
Exhibit 16: Rubber price trend
Exhibit 17: Rupee depreciation – A concern for EVA
64
230
63
210
194
178
(USD/INR)
169
170
145
150
123
130
60.35
61
60
59
58
57
56
Oct/14
Sep/14
Aug/14
Jul/14
Jun/14
May/14
Apr/14
Mar/14
Feb/14
Jan/14
Dec/13
Nov/13
Oct/14
Jul/14
Apr/14
Jan/14
Oct/13
Jul/13
Apr/13
Jan/13
Oct/12
Jul/12
Apr/12
Source: Capitaline, Angel Research
Oct/13
55
110
Sep/13
(`/Kg)
61.4
62
193
190
62.61
Source: Reuters, Angel Research
Competition from both - organised and unorganised sector
Relaxo faces competition from both branded as well as unbranded players. It
competes with listed peers like Bata and Liberty and non-listed peers like Lakhani
and Paragon. Hawaii, the mass market product, faces stiff competition from the
unorganised market. On the other hand, Sparx faces competition from branded
shoes. Though the company has competitively priced its products, however, any
price cut by competitors can put pressure on its sales and margin.
The company
Relaxo is one of the leading players in the Indian footwear industry engaged in
manufacturing and trading of footwear and other articles. It has 8 manufacturing
units, a portfolio of ~10 brands and ~50,000 retailers and distributors. The
company presently has 190 company-owned outlets across India, with a
concentrated presence in Delhi, Rajasthan, Gujarat, Haryana, Punjab, Uttar
Pradesh and Uttarakhand. It has 8 manufacturing plants, 6 in Bahadurgarh
(Haryana) and one each in Bhiwadi (Rajasthan) and Haridwar (Uttaranchal).
Currently, the company sells its products under three major brands – Hawaii, Flite
and Sparx.
November 5, 2014
9
Profit & Loss Statement (Standalone)
Y/E March (` cr)
FY2012
FY2013
FY2014
FY2015E
FY2016E
Total operating income
860
1,005
1,206
1,462
1,756
% chg
25.0
16.8
20.0
21.2
20.1
Net Raw Materials
459
469
551
658
783
% chg
22.3
2.2
17.4
19.4
19.0
Other Mfg costs
107
144
175
213
255
% chg
13.1
35.0
21.7
21.9
19.3
Personnel
82
111
115
134
162
% chg
10.6
35.1
3.0
17.3
20.1
Other
122
176
225
280
340
% chg
62.2
43.5
27.9
24.8
21.3
Total Expenditure
770
900
1065
1286
1539
EBITDA
90
105
141
176
216
% chg
31.6
16.7
33.9
24.9
23.2
(% of Net Sales)
10.5
10.4
11.7
12.0
12.3
Depreciation
23
25
31
42
46
EBIT
67
79
109
133
171
% chg
41.0
18.8
37.7
21.9
27.9
(% of Net Sales)
7.8
7.9
9.1
9.1
9.7
Interest & other Charges
19
18
23
15
11
Other Income
(% of sales)
Recurring PBT
6
9
10
12
0.6
0.7
0.7
0.7
48
62
87
119
160
52.9
28.1
40.5
36.9
34.3
Extraordinary Expense/(Inc.)
0.0
0.0
0.0
0.0
0.0
PBT (reported)
53
68
96
129
172
Tax
14
23
30
40
53
% chg
(% of PBT)
25.4
33.8
31.3
31.0
31.0
PAT (reported)
40
45
66
89
119
ADJ. PAT
40
45
66
89
119
49.4
12.3
46.5
35.6
33.2
4.6
4.5
5.4
6.1
6.8
33.3
37.3
10.9
14.8
19.8
6.7
7.5
10.9
14.8
19.8
49.4
12.3
46.5
35.6
33.2
% chg
(% of Net Sales)
Basic EPS (`)
Adj. EPS (`) (Post stock split)
% chg
Dividend
Retained Earning
November 5, 2014
5
0.6
2
2
3
5
5
38
42
63
85
114
10
Balance Sheet (Standalone)
Y/E March (` cr)
FY2012
FY2013
FY2014
FY2015E
FY2016E
SOURCES OF FUNDS
Equity Share Capital
6
6
6
6
6
Reserves& Surplus
166
208
271
354
468
Shareholder’s Funds
172
214
277
360
474
Total Loans
146
205
163
130
91
0
6
6
6
6
Other Long Term Liabilities
Long Term Provisions
3
3
3
3
3
22
24
26
26
26
344
452.501
474
525
600
Gross Block
379
458
527
569
620
Less: Acc. Depreciation
107
130
160
202
248
Net Block
272
327
367
367
372
21
23
23
10
10
Lease adjustment
0
0
0
0
0
Goodwill
0
0
0
0
0
Investments
0
0
0
0
0
12
15
13
13
13
1
1
0
0
0
169
221
254
322
428
1
3
6
34
79
15
20
13
20
28
Inventory
128
159
164
183
215
Debtors
23
36
68
80
96
Deferred Tax (Net)
Total Liabilities
APPLICATION OF FUNDS
Capital Work-in-Progress
Long Term Loans and adv.
Other Non-current asset
Current Assets
Cash
Loans & Advances
Other current assets
Current liabilities
Net Current Assets
Misc. Exp. not written off
Total Assets
November 5, 2014
2
3
3
4
9
131
135
183
187
223
38
87
71
135
204
0
0
0
0
0
344
452
474
525
600
11
Cash Flow (Standalone)
Y/E March (` cr)
FY2012
FY2013
FY2014
FY2015E
FY2016E
Profit before tax
53
68
96
129
172
Depreciation
23
25
31
42
46
Change in Working Capital
(4)
(46)
18
(36)
(24)
(14)
(23)
(30)
(40)
(53)
Direct taxes paid
Others
14
(6)
(9)
(10)
(12)
Cash Flow from Operations
73
18
106
85
128
(Inc.)/Dec. in Fixed Assets
(46)
(81)
(69)
(29)
(51)
(Inc.)/Dec. in Investments
0
0
0
0
0
(Inc.)/Dec. in LT loans & adv.
1
3
(2)
0
0
Others
(2)
6
9
10
12
(47)
(73)
(62)
(19)
(39)
0
0
0
0
0
(11)
59
(42)
(33)
(39)
(2)
(3)
(4)
(5)
(5)
Others
(14)
(0)
4
0
0
Cash Flow from Financing
(27)
56
(41)
(38)
(44)
(1)
2
3
29
45
Opening Cash balances
2
1
3
6
34
Closing Cash balances
1
3
6
34
79
Cash Flow from Investing
Issue of Equity
Inc./(Dec.) in loans
Dividend Paid (Incl. Tax)
Inc./(Dec.) in Cash
November 5, 2014
12
Standalone Key Ratios
Y/E March
FY2012
FY2013
FY2014
FY2015E
FY2016E
P/E (on FDEPS)
78.3
69.7
47.6
35.1
26.3
P/CEPS
49.6
44.4
32.3
23.8
19.0
P/BV
18.1
14.6
11.3
8.7
6.6
0.1
0.1
0.1
0.1
0.1
Valuation Ratio (x)
Dividend yield (%)
EV/Sales
EV/EBITDA
EV / Total Assets
3.8
3.3
2.7
2.2
1.8
36.3
31.7
23.3
18.3
14.5
9.5
7.3
6.9
6.1
5.2
33.3
37.3
10.9
14.8
19.8
Per Share Data (`)
EPS (Basic)
EPS (fully diluted)
6.7
7.5
10.9
14.8
19.8
10.5
11.7
16.1
21.9
27.4
0.3
0.4
0.5
0.8
0.8
28.7
35.7
46.1
60.0
78.9
EBIT margin
7.8
7.9
9.1
9.1
9.7
Tax retention ratio
0.7
0.7
0.7
0.7
0.7
Asset turnover (x)
2.7
2.4
2.7
3.0
3.4
15.5
12.3
16.9
19.1
23.1
9.6
5.7
9.6
7.8
8.4
Cash EPS (fully diluted)
DPS
Book Value
Dupont Analysis
ROIC (Post-tax)
Cost of Debt (Post Tax)
Leverage (x)
1.0
0.9
0.8
0.4
0.1
21.4
18.2
22.4
23.9
25.2
ROCE (Pre-tax)
19.5
17.6
23.1
25.4
28.5
Angel ROIC (Pre-tax)
20.8
18.6
24.6
27.7
33.4
ROE
26.0
23.2
26.7
28.0
28.4
Asset Turnover
2.4
2.4
2.5
2.7
3.0
Inventory / Sales (days)
52
52
49
43
41
Receivables (days)
10
11
16
20
20
Payables (days)
60
54
54
53
53
WC (ex-cash) (days)
15
22
23
21
23
Net debt to equity
0.8
0.9
0.6
0.3
0.0
Net debt to EBITDA
1.6
1.9
1.1
0.5
0.1
Interest Coverage
3.6
4.5
4.8
9.1
15.4
Operating ROE
Returns (%)
Turnover ratios (x)
Solvency ratios (x)
November 5, 2014
13
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking
or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or
in the past.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the
latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may
have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement
Relaxo Footwears
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Returns):
November 5, 2014
Buy (> 15%)
Reduce (-5% to -15%)
Accumulate (5% to 15%)
Sell (< -15%)
Neutral (-5 to 5%)
14

Relaxo Footwears NEUTRAL Performance Highlights

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