Relaxo Footwear Q4 revenues grow 20.6 percent

Relaxo has reported mixed set of numbers for the fourth

quarter ending in FY 2013. Revenue for the quarter grew considerably by 20.6 percent year-on-year and stood at Rs 291 crores, says an Angel Broking report. It was beyond agency’s expectations of Rs 275 crores. However, on the operating margin front the company witnessed a contraction of 269 bp on year-on-year basis and came in at 11.0 percent against agency’s estimate of 11.8 percent.

This contraction in operating margin is mainly attributable to higher other expenses. Tax for the quarter stood at Rs 8 crore (38.1 percent of PBT). Subsequently, the profit for the quarter declined by 28.3 percent year-on-year and stood at Rs 14 crores, 27.7 percent lower than firm’s estimate of Rs 19 crores.

For FY 2013, the company witnessed a revenue growth of at Rs 1,005 crores, against estimated Rs 989 crores, on account of healthy demand coupled with price hikes. The operating margin came in at 10.4 percent, slightly below estimate of 10.6 percent mainly because of higher other expenses. Subsequently the profit for FY 2013 stood at Rs 45 crores (12.2 percent higher than FY 2012), against our estimate of Rs 50 crores.

However, the broking firm is positive about the growth triggers including - capacity expansion plan, store expansion, improved sales mix and brand revamping.