Views on Relaxo Footwear 3QFY2014 results - Angel Broking

Views on Relaxo Footwear 3QFY2014 results - Angel Broking:

Relaxo reported a strong set of numbers for 3QFY2014. The revenue for the quarter grew by 16.2% yoy and stood at Rs. 259cr, against our expectation of Rs. 248cr. The operating margin for the quarter expanded by 236bp on yoy basis and came in at 10.8%, ahead of our estimate of 9.6%, mainly because of lower than expected employee cost. Tax for the quarter stood at Rs. 5cr (31.3% of PBT). As a result, the net profit for the quarter came in at Rs. 11cr, 74.5% higher yoy and in-line with our estimate.

We remain positive on the company with the growth triggers in place, which includes – 1) sufficient capacity expansion, 2) improving sales mix and 3) increasing brand visibility. We continue to recommend Accumulate rating on the stock."

Source : Equity Bulls

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