New launches and a better distribution presence are expected to translate into continued market share gains for Relaxo
In the last one year, the Indian equity market has seen an excellent surge despite uncertainty on economic recovery, Covid situation. Among the stocks that rallied were footwear stocks running up about 20-100 percent each, according to ACE Equity data. We excluded companies below Rs 100 crore market cap.
PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook
Relaxo Footwear’s (Relaxo; CMP: Rs 1,172; Market Capitalisation: Rs 29,120 crore) June quarter results were affected by lockdowns/restrictions, owing to the second wave of COVID-19. However, Relaxo is recovering since the unlock measures announced in June 2021. Like FY21, we expect the company to post a strong growth in H2FY22, led by the opening up of the economy and pent-up demand as people movement increases. Relaxo posted a 6 per cent volume growth in FY21, led by market share gains owing…