RELAXO FOOTWEARS 2018-19 Annual Report Analysis

Sun, 31 Mar

RELAXO FOOTWEARS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

RELAXO FOOTWEARS Income Statement Analysis

• Operating income during the year rose 18.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.2% in FY19 as against 15.6% in FY18.
• Depreciation charges increased by 14.9% and finance costs increased by 4.5% YoY, respectively.
• Other income grew by 191.0% YoY.
• Net profit for the year grew by 8.9% YoY.
• Net profit margins during the year declined from 8.3% in FY18 to 7.7% in FY19.

RELAXO FOOTWEARS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	19,335	22,921	18.5%
Other income	Rs m	45	130	191.0%
Total Revenues	Rs m	19,380	23,051	18.9%
Gross profit	Rs m	3,021	3,264	8.0%
Depreciation	Rs m	543	624	14.9%
Interest	Rs m	86	90	4.5%
Profit before tax	Rs m	2,436	2,680	10.0%
Tax	Rs m	826	925	12.1%
Profit after tax	Rs m	1,611	1,754	8.9%
Gross profit margin	%	15.6	14.2
Effective tax rate	%	33.9	34.5
Net profit margin	%	8.3	7.7

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

RELAXO FOOTWEARS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 5 billion as compared to Rs 4 billion in FY18, thereby witnessing an increase of 11.6%.
• Current assets rose 29% and stood at Rs 7 billion, while fixed assets rose 29% and stood at Rs 9 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 16 billion as against Rs 12 billion during FY18, thereby witnessing a growth of 29%.

RELAXO FOOTWEARS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	7,564	10,975	45.1
Current Liabilities	Rs m	4,149	4,629	11.6
Long-term Debt	Rs m	393	0	-100.0
Total Liabilities	Rs m	12,498	16,114	28.9
Current assets	Rs m	5,617	7,270	29.4
Fixed Assets	Rs m	6,881	8,845	28.5
Total Assets	Rs m	12,498	16,114	28.9

RELAXO FOOTWEARS Cash Flow Statement Analysis

• RELAXO FOOTWEARS's cash flow from operating activities (CFO) during FY19 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -569 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -682 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -12 million from the Rs -4 million net cash flows seen during FY18.

RELAXO FOOTWEARS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	1,543	1,235	-20.0%
Cash Flow from Investing Activities	Rs m	-1,084	-569	-
Cash Flow from Financing Activities	Rs m	-463	-682	-
Net Cash Flow	Rs m	-4	-12	-

Current Valuations for RELAXO FOOTWEARS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.1, an improvement from the EPS of Rs 13.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 775.0, stands at 110.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 17.6 times, while the price to sales ratio stands at 4.2 times.
• The company's price to cash flow (P/CF) ratio stood at 39.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	160.7	184.8
TTM Earnings per share	Rs	13.4	14.1
Diluted earnings per share	Rs	6.5	7.0
Price to Cash Flow	x	75.3	39.4
TTM P/E ratio	x	100.7	110.0
Price / Book Value ratio	x	9.3	8.5
Market Cap	Rs m	70,422	93,596
Dividends per share (Unadj.)	Rs	1.5	1.8

Ratio Analysis for RELAXO FOOTWEARS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY19, from 1.4x during FY18. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 30.8x during FY19, from 29.4x during FY18. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 16.0% during FY19, from 21.3% during FY19. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 25.2% during FY19, from 31.7% during FY18. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 11.4% during FY19, from 13.6% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.4	1.6
Debtors’ Days	Days	3	4
Interest coverage	x	29.4	30.8
Debt to equity ratio	x	0.1	0.0
Return on assets	%	13.6	11.4
Return on equity	%	21.3	16.0
Return on capital employed	%	31.7	25.2

To see how RELAXO FOOTWEARS has performed over the last 5 years, please visit here.

RELAXO FOOTWEARS Share Price Performance

Over the last one year, RELAXO FOOTWEARS share price has moved up from Rs 651.4 to Rs 775.0, registering a gain of Rs 123.6 or around 19.0%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

(To know more, check out historical annual results for RELAXO FOOTWEARS and quarterly results for RELAXO FOOTWEARS)

Read: Latest Annual Report Analysis of RELAXO FOOTWEARS