Hold Relaxo Footwears; target of Rs 1100 : ICICI Direct

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ICICI Direct's research report on Relaxo Footwears

Relaxo is India’s leading footwear manufacturing company, boasting of largest capacity of 10.0 lakh pairs per day. It is a dominant player in the open footwear space (~80% of sales), with its strong portfolio of brands (‘Flite’, ‘Bahamas’, ‘Sparx’, ‘Relaxo). Market leader in value priced segment selling ~19 crore pairs annually • Relaxo, over the years, has maintained b/s prudence with controlled working capital cycle, healthy asset turns of 2.5x and generating RoCE of 20%+.

Outlook

However, premium valuations and near term headwinds may cap upsides. Hence, we reiterate HOLD rating on the stock with a revised target price. We value Relaxo at Rs 1100 i.e. 65x FY24E EPS.

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