Relaxo Footwears Limited: history, ownership, mission, how it works & makes money

A Brief History of Relaxo Footwears Limited

Founded in 1976, Relaxo Footwears Limited has established itself as a leading manufacturer and retailer in the footwear industry in India. The company began its operations with a modest ambition, focusing on manufacturing quality footwear that catered to the diverse needs of Indian consumers.

Relaxo is headquartered in Delhi, India, and has expanded its footprint considerably over the years. As of the latest financial year ending March 2023, Relaxo Footwears reported a revenue of ₹1,486 crore, marking a growth of 12.5% from the previous year. The company has successfully positioned its products in the value and affordable categories, appealing to a vast consumer base.

The company operates various segments, including casual sandals, sports shoes, and formal footwear. Amongst its popular brands are Relaxo, Sparx, and Eastland. As of 2023, the retail presence of Relaxo has expanded to over 5,000 retail outlets across India, with a growing online presence through platforms like Amazon and Flipkart.

The company went public in 2012, with shares listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Initial Public Offering (IPO) was well-received, leading to significant capital inflow for expansion and modernization. Since its IPO, the stock has seen substantial appreciation, trading at around ₹1,065 per share as of October 2023.

Here is a

In terms of operational capacity, Relaxo has a robust manufacturing setup with multiple units in Haryana and Himachal Pradesh, allowing for production capabilities exceeding 10 million pairs of footwear annually. Additionally, the company has invested heavily in branding and advertising, further enhancing its market presence and customer loyalty.

Amidst the challenges posed by the COVID-19 pandemic, Relaxo managed to pivot its strategy by enhancing its digital capabilities and focusing on e-commerce, which now accounts for approximately 25% of its total sales. The company's resilience can be attributed to its ability to adapt to changing consumer preferences and market dynamics.

Looking ahead, Relaxo Footwears aims for continued growth through strategic expansions in domestic and international markets, with a target to increase its annual revenue to over ₹2,000 crore by 2025. The company's strong fundamentals and growth trajectory make it a noteworthy player in the competitive landscape of the footwear industry in India.

A Who Owns Relaxo Footwears Limited

Relaxo Footwears Limited, a prominent player in the Indian footwear market, is publicly traded on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). As of the latest filings in October 2023, the company has a diversified ownership structure comprised of institutional investors, individual shareholders, and company promoters.

The promoter group, led by Mr. Rajesh Kumar Chaudhary and his family, maintains a significant equity stake in the company, with a combined shareholding that has remained relatively stable over recent years. Their long-term commitment plays a crucial role in the strategic decisions and operational growth of Relaxo Footwears.

As per the latest financial disclosures, the company reported a market capitalization of approximately INR 86.12 billion as of October 2023. Relaxo Footwears continues to enjoy robust sales growth, with a revenue of INR 41.10 billion for the fiscal year ending March 2023, reflecting an increase of 16.5% year-over-year.

In terms of share price performance, Relaxo Footwears stock was trading around INR 1,097.40 per share on the BSE as of the first week of October 2023. This represents a year-to-date growth of approximately 22.6%.

Furthermore, the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) margin stood at 20.4%, indicating strong operational efficiency. The net profit for the last fiscal year was reported at INR 4.92 billion, with a net profit margin of 12.0%.

Relaxo Footwears has ramped up its production capabilities, with recent investments of about INR 1 billion directed toward expanding its manufacturing facilities in northern India. This investment is expected to enhance its production capacity by approximately 25% over the next two years.

Relaxo Footwears Limited Mission Statement

Relaxo Footwears Limited is driven by its mission to provide high-quality and affordable footwear for its customers. The company emphasizes innovation in manufacturing processes and is committed to sustainability in its operations, ensuring that their products meet the highest standards of both quality and environmental responsibility.

As of March 31, 2023, Relaxo reported a net profit of ₹175.3 Crores, reflecting a year-on-year increase of 18%. The company's total revenue for the same fiscal year was ₹2,430 Crores, up from ₹2,046 Crores in the previous year, indicating a growth of 18.75%.

The mission statement also highlights the importance of customer satisfaction, where they aim to cater to the diverse preferences and needs of consumers across various demographics. Relaxo has established a strong brand presence, offering a wide range of products that include slippers, sandals, and sports shoes.

In its commitment to sustainability, Relaxo Footwears Limited aims to reduce its carbon footprint by implementing energy-efficient technologies in its manufacturing plants. The company has set a target to achieve a 20% reduction in greenhouse gas emissions by 2025.

Relaxo also emphasizes community engagement through various corporate social responsibility (CSR) initiatives, which include programs focused on education, health, and environmental conservation.

With a strong market presence, Relaxo's products are available in over 100,000 retail outlets across India and are exported to more than 30 countries. The company has also seen a significant increase in online sales, contributing to approximately 25% of its total revenue in recent years.

How Relaxo Footwears Limited Works

Relaxo Footwears Limited is a prominent player in the Indian footwear industry, recognized primarily for its sandals, slippers, and sports shoes. The company operates with a diverse portfolio of brands, including Relaxo, Sparx, and Bahamas. As of the latest financial year ending March 31, 2023, Relaxo reported a total revenue of ₹1,157 crores, marking an increase from ₹1,039 crores in the previous year.

The company’s business model focuses on manufacturing, marketing, and distributing a variety of footwear products across different segments. The production facility is located in Bahadurgarh, Haryana, and its modern manufacturing processes ensure high efficiency and lower production costs.

As per their financials, Relaxo Footwears reported a net profit of ₹115 crores for the fiscal year 2022-2023, compared to ₹101 crores in the prior year. This growth reflects a net profit margin of approximately 9.94%.

The company utilizes a multi-channel distribution strategy, reaching consumers through modern trade outlets, e-commerce platforms, and traditional retail shops. As of October 2023, Relaxo operates over 2,000+ retail outlets and has a significant presence on e-commerce platforms like Amazon and Flipkart.

Relaxo has also made significant investments in brand promotion and advertising. The marketing expenditure for the fiscal year was around ₹30 crores, focusing on enhancing brand visibility and expanding market reach.

In terms of production capacity, the Bahadurgarh facility is capable of producing approximately 50 million pairs of footwear annually. This capacity is augmented by additional production units in other locations, giving Relaxo the ability to scale operations based on market demand.

Looking at the stock performance, Relaxo Footwears Limited is listed on the BSE and NSE. As of October 2023, the stock was trading at approximately ₹1,050 per share, with a market capitalization of around ₹12,500 crores.

The company aims to enhance its sustainability efforts by incorporating eco-friendly materials in its production process. As of recent reports, about 15% of its raw materials are sourced sustainably, with plans to increase this percentage in the coming years.

Relaxo’s strategic focus includes expanding its product range into sports and casual footwear, catering to the growing demand for lifestyle products in the Indian market. In FY 2022-2023, the sports footwear segment contributed 30% to the total sales, up from 25% in the prior year.

Overall, Relaxo Footwears Limited operates with a clear vision of growth and market expansion while maintaining robust financial health through effective management strategies and strong brand positioning.

How Relaxo Footwears Limited Makes Money

Relaxo Footwears Limited operates primarily in the footwear sector, specializing in the design, manufacture, and sale of a wide range of shoes, sandals, and slippers. The company generates revenue through multiple channels, leveraging its brand portfolio and distribution network to reach consumers.

The company's revenue model includes the following key segments:

• Retail Sales
• Wholesale Distributions
• Online Sales
• Exports

For the fiscal year 2022-2023, Relaxo reported a total revenue of ₹2,052 crores, a growth of approximately 25% compared to the previous fiscal year. This growth can be attributed to an increase in consumer demand as well as expansion in distribution channels.

Relaxo Footwears boasts a diversified product range, which is crucial for catering to different market segments. As of March 2023, its primary brands include:

• Bata
• Relaxo
• Flite
• Sparx
• Schoolmate

The contribution of each brand to total revenue is illustrated in the following table:

In terms of market penetration, Relaxo has a strong presence in both urban and rural segments. Approximately 45% of its revenue comes from urban areas, while 55% is generated from rural markets. To support its distribution, the company has over 20,000 retail outlets across India.

Another significant revenue driver for Relaxo is its online sales channel. In FY 2022-2023, online sales accounted for approximately 15% of total revenue, demonstrating a strong shift towards e-commerce. The company has partnered with major online platforms such as Amazon, Flipkart, and its own website to boost sales.

Relaxo also engages in export activities, which provide an additional revenue stream. In the fiscal year 2022-2023, the company exported products worth approximately ₹200 crores, primarily to markets in the Middle East and Africa.

Cost management plays a crucial role in Relaxo's profitability. The company has maintained a healthy gross margin of approximately 48% in recent years. Key costs include raw materials, labor, and distribution logistics. The focus on efficient manufacturing and supply chain management has contributed to maintaining profitability despite fluctuating costs.

In the fiscal year 2022-2023, Relaxo reported a net profit of ₹274 crores, which translates to a net profit margin of approximately 13.3%. This is a significant improvement from the 10.2% margin reported in FY 2021-2022, reflecting the company's successful strategies in revenue enhancement and cost control.

The footwear industry's growth prospects also benefit Relaxo, as the market is projected to expand at a CAGR of 8.5% from 2023 to 2028. The growing awareness of fashion trends and increasing disposable income among consumers are likely to support this growth, positioning Relaxo to capitalize on these favorable conditions.