RELAXO FOOTWEARS 2022-23 Annual Report Analysis

Sun, 6 Aug

RELAXO FOOTWEARS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

RELAXO FOOTWEARS Income Statement Analysis

• Operating income during the year rose 4.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 19.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.2% in FY23 as against 15.7% in FY22.
• Depreciation charges increased by 10.2% and finance costs increased by 25.9% YoY, respectively.
• Other income declined by 21.7% YoY.
• Net profit for the year declined by 33.6% YoY.
• Net profit margins during the year declined from 8.8% in FY22 to 5.6% in FY23.

RELAXO FOOTWEARS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	26,533	27,828	4.9%
Other income	Rs m	237	186	-21.7%
Total Revenues	Rs m	26,770	28,013	4.6%
Gross profit	Rs m	4,176	3,382	-19.0%
Depreciation	Rs m	1,135	1,251	10.2%
Interest	Rs m	172	217	25.9%
Profit before tax	Rs m	3,106	2,100	-32.4%
Tax	Rs m	779	555	-28.7%
Profit after tax	Rs m	2,327	1,545	-33.6%
Gross profit margin	%	15.7	12.2
Effective tax rate	%	25.1	26.4
Net profit margin	%	8.8	5.6

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RELAXO FOOTWEARS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 5 billion as compared to Rs 5 billion in FY22, thereby witnessing an increase of 2.1%.
• Current assets rose 1% and stood at Rs 12 billion, while fixed assets rose 9% and stood at Rs 13 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 25 billion as against Rs 24 billion during FY22, thereby witnessing a growth of 5%.

RELAXO FOOTWEARS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	17,578	18,546	5.5
Current Liabilities	Rs m	4,610	4,707	2.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	23,826	24,948	4.7
Current assets	Rs m	11,869	11,936	0.6
Fixed Assets	Rs m	11,957	13,012	8.8
Total Assets	Rs m	23,826	24,948	4.7

RELAXO FOOTWEARS Cash Flow Statement Analysis

• RELAXO FOOTWEARS's cash flow from operating activities (CFO) during FY23 stood at Rs 4 billion, an improvement of 614.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 32 million from the Rs 8 million net cash flows seen during FY22.

RELAXO FOOTWEARS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	560	4,001	614.5%
Cash Flow from Investing Activities	Rs m	146	-2,585	-
Cash Flow from Financing Activities	Rs m	-698	-1,385	-
Net Cash Flow	Rs m	8	32	317.1%

Current Valuations for RELAXO FOOTWEARS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.2, an decline from the EPS of Rs 9.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 933.1, stands at 134.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.5 times, while the price to sales ratio stands at 8.3 times.
• The company's price to cash flow (P/CF) ratio stood at 91.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	106.6	111.8
TTM Earnings per share	Rs	9.3	6.2
Diluted earnings per share	Rs	9.3	6.2
Price to Cash Flow	x	76.6	91.2
TTM P/E ratio	x	114.0	134.9
Price / Book Value ratio	x	16.3	13.8
Market Cap	Rs m	285,643	255,100
Dividends per share (Unadj.)	Rs	2.5	2.5

Ratio Analysis for RELAXO FOOTWEARS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY23, from 2.6x during FY22. 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 deteriorated and stood at 10.7x during FY23, from 19.1x during FY22. 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 8.3% during FY23, from 13.2% during FY23. 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 12.5% during FY23, from 18.6% during FY22. 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 7.1% during FY23, from 10.5% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.6	2.5
Debtors’ Days	Days	3	4
Interest coverage	x	19.1	10.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.5	7.1
Return on equity	%	13.2	8.3
Return on capital employed	%	18.6	12.5

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 down from Rs 999.3 to Rs 933.1, registering a loss of Rs 66.3 or around 6.6%.

Overall, the S&P BSE SENSEX is up 12.6% over the year.

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