Relaxo Footwear seems to be striding in the right direction based on its Q2FY20 earnings. With volumes jumping up over 19 times, the stock price hit a new high today at Rs.625, jumping up over 15%.
The company’s revenue was up by 14% (YoY) at Rs. 622 crore. Growth has been driven mainly by premiumization, product mix and price increase in selected categories. Its EBITDA came in at Rs. 105 crore v/s Rs.74 crore as premiumization and favorable raw material prices improved EBITDA margins. EBITDA margins adjusted for IND AS 116, stand at 15%.
Finance cost stood at Rs. 4 crore as compared to Rs. 1 crore and Depreciation stood at Rs. 28 crore as compared to Rs. 16 crore in the corresponding period of the previous year, mainly due to IND AS 116.
PBT is lower by Rs. 2 crore in this quarter by adoption of IND AS 116 while net profit showed a sharp jump at Rs.71 crore v/s Rs. 39 crore. Company has chosen to exercise the option of lower tax rate of 25.168% (inclusive of surcharge and cess) and that’s the prime reason why net profit has almost doubled.