Relaxo Footwears Limited (RELAXO) AI Stock Analysis

• Market Cap: ₹71.36B
• Dividend Yield: 0.75%
• Average Volume (3M): 17.88K
• Price to Earnings (P/E): 94.8
• Beta (1Y): 0.93
• Revenue Growth: -8.39%
• EPS Growth: -3.74%
• Country: IN
• Employees: 7,708
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 1.10
• Shares Outstanding: 248,938,580
• 10 Day Avg. Volume: 13,717
• 30 Day Avg. Volume: 17,877
• PEG Ratio: -4.04
• Price to Book (P/B): 4.93
• Price to Sales (P/S): 3.71
• P/FCF Ratio: 35.51
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹410.00
• Price Target Upside: 0.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 7.23
• Revenue Forecast (FY): ₹26.52B

• Rating: 56 Neutral
• Price Target: ₹295.00 ▼(-27.38% Downside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is anchored by solid financial stability and steady revenue growth, but is held back by weakening profitability and inconsistent free cash flow. Technicals are notably bearish (below all major DMAs and negative MACD), and valuation is a major headwind due to the very high P/E despite a modest dividend yield.

Positive Factors

High gross margins

Sustained gross margins near 59-60% indicate durable manufacturing and sourcing efficiency. That structural margin buffer helps absorb raw-material cost swings, supports long-term profitability of core footwear SKUs, and underpins reinvestment in brand and distribution.

Robust, low-leverage balance sheet

A ~76% equity ratio and very low debt-to-equity (~0.10) provide financial flexibility: ability to fund capex, withstand demand shocks, and avoid high interest burden. This conservatism supports multi-year investment in capacity and brand without pressuring cash flow.

Wide brand portfolio & multi-channel reach

A multi-brand strategy across mass and value segments plus multi-channel distribution creates durable revenue sources and scale advantages. Broad retail, wholesale and marketplace access reduces customer-concentration risk and supports steady unit volumes over time.

Negative Factors

Falling net profit margins

A drop from 11% to 6% net margin signals weakening bottom-line convertibility of sales. Persistently compressed net margins reduce retained earnings for growth or paybacks, make the company more sensitive to cost inflation, and limit long-term shareholder returns.

Inconsistent free cash flow

Volatile free cash flow driven by episodic capex weakens the company’s ability to fund dividends, working capital, or expansion from operations alone. Recurrent negative FCF years increase reliance on external financing or slower reinvestment cadence.

Declining return on equity

ROE halving to ~8% reflects falling capital efficiency and weaker profitability. Lower ROE over multiple years suggests deteriorating operational leverage or competitive pressures, which can constrain long-term value creation for shareholders.

Relaxo Footwears Limited Business Overview & Revenue Model

Company Description

Relaxo Footwears Limited manufactures and sells footwear for men, women, and kids in India and internationally. It offers casual, running, athleisure, walking, formal, sports, school, and training and gym shoes. The company also provides slippers, sandals, flip flops, slides, chappals, casuals, belles, and clogs. In addition, it offers footwear accessories. The company provides its products under the Relaxo, Bahamas, Flite, Sparx, BOSTON, and Mary Jane brands. It sells its products through 394 exclusive brand outlets; and e-commerce portals. Relaxo Footwears Limited was founded in 1976 and is based in New Delhi, India.

How the Company Makes Money

Relaxo primarily makes money by selling branded footwear in India through a multi-channel distribution network. Its core revenue stream is the sale of footwear products (e.g., slippers/flip-flops, sandals, and shoes), with earnings driven by unit volumes, product mix (economy vs. higher-priced ranges such as sports/leisure shoes), and brand pricing power. Revenue is generated through sales to trade partners (distributors/wholesalers/retailers) and through company-supported channels such as large-format retail and, where applicable, online marketplaces and direct-to-consumer e-commerce. Profitability is influenced by manufacturing scale, sourcing and prices of key raw materials (such as polymers/rubber/EVA and other inputs), operating leverage in plants and logistics, and marketing spend to support brand demand. Specific details on major partnerships or channel-wise revenue splits are null.

Relaxo Footwears Limited Financial Statement Overview

Summary

Steady revenue growth and a strong, low-leverage balance sheet support the score, but declining profitability (net margin down to ~6% by 2025 and weaker ROE) plus volatile free cash flow due to capex temper overall financial strength.

Income Statement

Relaxo Footwears Limited has shown a consistent revenue growth over the years, with a notable increase from ₹26.5 billion in 2022 to ₹28.1 billion in 2025. Gross profit margin has generally been strong, hovering around 59-60%, indicating efficient cost management. However, net profit margin has seen a decline from 11% in 2021 to 6% in 2025, reflecting challenges in maintaining profitability. EBIT margin has also fluctuated, with a decrease in recent years, pointing towards operational inefficiencies.

Balance Sheet

The company's balance sheet is robust with a high equity ratio of approximately 76%, suggesting financial stability and low leverage. The debt-to-equity ratio is relatively low, around 0.10, indicating a conservative approach to debt financing. Return on equity has reduced from 19% in 2021 to 8% in 2025, suggesting a decline in the company's profitability from shareholders' perspective.

Cash Flow

Operating cash flow has been generally strong, with a notable improvement in 2025. However, free cash flow has been inconsistent, with negative figures in some years due to high capital expenditures. The operating cash flow to net income ratio has improved, showcasing better cash generation relative to reported earnings, but free cash flow to net income ratio remains volatile, indicating fluctuating ability to generate cash post-capex.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	26.45B	27.90B	29.14B	27.83B	26.53B	23.46B
Gross Profit	12.78B	16.41B	16.41B	14.04B	14.37B	13.12B
EBITDA	4.15B	4.09B	4.38B	3.57B	4.41B	5.20B
Net Income	1.74B	1.70B	2.00B	1.54B	2.33B	2.92B
Balance Sheet
Total Assets	28.70B	27.62B	27.14B	24.95B	23.83B	21.76B
Cash, Cash Equivalents and Short-Term Investments	2.55B	3.11B	1.69B	2.66B	1.77B	3.44B
Total Debt	2.15B	2.13B	2.05B	1.64B	1.74B	1.44B
Total Liabilities	7.61B	6.64B	7.13B	6.40B	6.22B	6.03B
Stockholders Equity	21.09B	20.98B	20.01B	18.55B	17.60B	15.72B
Cash Flow
Free Cash Flow	1.58B	2.91B	-132.40M	2.15B	-835.20M	3.90B
Operating Cash Flow	2.36B	4.06B	2.35B	4.00B	559.90M	5.13B
Investing Cash Flow	-1.50B	-2.62B	-986.30M	-2.58B	145.50M	-4.53B
Financing Cash Flow	-1.07B	-1.62B	-1.06B	-1.38B	-697.80M	-561.50M

Relaxo Footwears Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 406.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:RELAXO, the sentiment is Negative. The current price of 406.2 is above the 20-day moving average (MA) of 334.63, above the 50-day MA of 362.78, and below the 200-day MA of 423.47, indicating a bearish trend. The MACD of -20.44 indicates Positive momentum. The RSI at 14.81 is Positive, neither overbought nor oversold. The STOCH value of 6.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:RELAXO.

Relaxo Footwears Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAZDA	68 Neutral	₹3.64B	12.72	―	1.64%	―	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
RELAXO	56 Neutral	₹71.36B	94.83	―	0.75%	-8.39%	-3.74%
BATAINDIA	56 Neutral	₹87.23B	45.84	―	0.95%	-0.95%	-50.96%
VIPCLOTHNG	54 Neutral	₹1.55B	76.58	―	―	38.82%	―
KHADIM	53 Neutral	₹1.79B	-490.53	―	―	-26.54%	-21.93%
RAJESHEXPO	51 Neutral	₹31.18B	18.97	―	―	112.02%	244.77%

Relaxo Footwears Limited Corporate Events

Relaxo Footwears Files SEBI Regulation 74(5) Compliance Certificate for December 2025 Quarter

Relaxo Footwears Limited has submitted to the stock exchanges a compliance certificate under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended December 31, 2025, issued by its registrar and share transfer agent, KFin Technologies Limited. The certificate confirms that, during the quarter, dematerialization requests were processed within the prescribed timelines, securities dematerialized were already listed on the relevant stock exchanges, physical share certificates received for dematerialization were properly mutilated and cancelled, and the depository’s name was recorded as the registered owner, underscoring the company’s adherence to regulatory norms in handling its equity shares and providing assurance to investors about the integrity of its share transfer and dematerialization processes.