Relaxo Footwears Ltd – Slippers at ₹495, but P/E at “Luxury Swiss Watch” Levels
1. At a Glance
Relaxo Footwears, the company that gave middle-class India its chappal-swagger, is now in the awkward stage where it’s still selling ₹200 Hawai slippers but trading on the stock market like it’s Louis Vuitton. With 17.7 crore pairs sold last year (down from 19.5 crore – fewer feet walking into their shops?), 406 EBOs, and brand ambassadors ranging from Salman Khan (Bahamas) to Akshay Kumar (Sparx), Relaxo is a household name. But here’s the kicker: stock P/E at 70, margins squeezed by labour costs, and volume shrinkage – this is not your neighbourhood Bata ka dukaan story anymore.
2. Introduction
Relaxo is the footwear equivalent of Maggi noodles – cheap, everywhere, and capable of uniting Indians across caste, creed, and economic class. From the paan shop outside your gali to Amazon’s flashy homepage, there’s a 90% chance you’ve stepped on a Relaxo sole at least once in your life.
But being the “largest footwear manufacturer in India” doesn’t mean it’s having a Cinderella moment. Sales fell in FY25, margins have been wobbling more than a college fresher after his first vodka shot, and the market has punished the stock – down nearly 40% in a year. Yet, this company is still flexing with a ₹12,286 crore market cap, 71% promoter holding, and expansion plans like it’s still 2019.
So what’s going on? Is Relaxo the hidden compounding slipper that investors should hold tight to, or is it about to get slippered by competition like Metro, Bata, and Campus Activewear?
3. Business Model – WTF Do They Even Do?
Relaxo is not just about the ₹150 Flite chappal you buy after Holi when your last pair drowned in colour water. It runs a mini-empire of footwear sub-brands:
Flite – budget-friendly, semi-formal slippers, the “wedding-guest chappal.”
Relaxo – the OG brand, plain-Jane slippers for all generations.
Bahamas – youth-oriented, Salman Khan endorsed, but thankfully doesn’t come with his movie scripts.
Sparx – sporty, attitude-driven shoes with Akshay Kumar’s face on billboards.
Schoolmate – for kids who lose their shoes every alternate week.
Mary Jane / Boston / Kids Fun – the niche fillers.
Distribution is a beast: 550 distributors feeding 70,000 retailers + 406 exclusive outlets + exports to 36 countries + online sales (10% of FY25 revenue). Production capacity is massive at 10.5 lakh pairs a day – but utilisation is only 55%. Think of it as owning a buffet but only filling half the trays.
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue (₹ Cr)
654
748
695
-12.5%
-5.9%
EBITDA (₹ Cr)
99
99
112
0.0%
-11.6%
PAT (₹ Cr)
49
44
56
10.2%
-12.5%
EPS (₹)
1.96
1.78
2.26
10.2%
-13.3%
Commentary: Revenue dropped YoY and QoQ, but PAT still eked out growth thanks to “other income” acting like the rich uncle. Annualised EPS ~₹7.8, which makes the P/E look like it belongs in the Swiss Alps, not Bahadurgarh.
5. Valuation – Fair Value Range Only
P/E Method: EPS ~₹7.0 (FY25). Industry average P/E ~45. So fair range = ₹315 – ₹370.
EV/EBITDA Method: EBITDA ~₹383 Cr; EV/EBITDA range for consumer durables ~20–25. EV fair value = ₹7,660 – ₹9,575 Cr. Per share = ₹310 – ₹385.
DCF (quick and dirty): Assuming 7% CAGR sales, 10% margin, discounting at 12%. Range = ₹340 – ₹400.
Fair Value Range: ₹310 – ₹400. CMP = ₹495. Gap is like buying a Flite slipper for ₹800 in Khan Market.
Disclaimer: This fair value range is for educational purposes only and is not investment advice.
