01 — At a Glance
When Your Revenue Flatlines But Your Margin Gets Murdered
- 52-Week High / Low₹531 / ₹293
- Q3 FY26 Revenue₹668 Cr
- Q3 FY26 PAT₹26.5 Cr
- Q3 FY26 EPS₹1.06
- Annualised EPS (Q3×4)₹4.24
- Book Value₹84.7
- Price to Book3.48x
- Dividend Yield1.02%
- Debt / Equity0.10x
- Return over 1 Year-26.9%
Auditor’s Opening Note: Relaxo India closed Q3 FY26 with ₹668 crore revenue (+0.17% YoY, essentially flat), but PAT crashed 19.6% YoY to ₹26.5 crore. The stock has been slipping backwards faster than someone wearing a wet Hawai flipper. P/E at 43.7x is screaming “expensive” while the company’s ROCE of 11.2% is whispering “meh.” Yet this is India’s largest footwear maker. The math is mathematically confused.
02 — Introduction
The Flip-Flop Chronicles: When India’s Slipper King Gets Uncomfortable
Relaxo Footwears is the largest footwear manufacturer in India. For context: if Indian footwear had a Forbes list, Relaxo would be on the cover wearing its own slippers. Founded in 1984, it has been quietly dominating the “value” footwear segment with brands like Relaxo, Sparx, Flite, and Bahamas.
But here’s the thing — being the largest manufacturer doesn’t mean being the best investor. The company operates through 550+ active distributors feeding 70,000+ retail touchpoints across India. It manufactures 10.5 lakh pairs per day across 9 facilities. By volume, they win. By margins, not so much.
Q3 FY26 was meant to be the quarter where things improved. Instead, it was the quarter where the CEO probably considered opening a gym to work out the stress. Revenue stayed flat. Margins collapsed. And the stock celebrated with a 27% haircut over the year.
Let’s understand what the concall told us, why margins are playing dead, and whether this is a bargain or a bear trap masquerading as a flip-flop.
Q3 FY26 Concall Summary (Jan 2026): Management attributed margin pressure to rising raw material costs, wage inflation from the mandated minimum wage hike in FY25, and weak demand in the mass segment. Translation: “We got squeezed, and we didn’t pass it to customers because they were already not buying.”
03 — Business Model: WTF Do They Even Make?
It’s Slippers and Shoes. Yes, Really.
Relaxo manufactures non-leather footwear — rubber/EVA slippers, canvas shoes, sports shoes, sandals, and school shoes. Glamorous? No. Profitable? Sometimes. Ubiquitous? Absolutely. Walk into any Indian pharmacy, sweet shop, or railway station, and you’ll see Relaxo slippers. Your grandmother probably owns three pairs.
The portfolio splits as: Hawai (23% revenue, 45% volume) — the classic rubber slipper that’s been holding Indian feet since 2003. Flite (37% revenue, 39% volume) — positioned as the upgrade for people who think slippers deserve a little style. Sparx (40% revenue, 16% volume) — the sports and casual shoe brand, commanding premium pricing because people will pay ₹500 for a shoe that’s not a slipper.
Revenue channels: General Trade (75% — your neighbourhood retail shops), New Channel (10% — organized retail, e-commerce), Retail EBOs (10%), and Exports (5%). E-commerce contributes ~10% overall. The company operates with ~55% capacity utilization in FY25, which is funny because it means Relaxo can double production tomorrow if demand shows up. Spoiler: demand didn’t show up in FY26.
Pairs Sold (9M FY26)12.5 Crvs 13.2 Cr prior year
Avg Realization (9M FY26)₹155vs ₹157 prior year
Active Distributors550+Pan-India reach
Brand Strategy Note: Relaxo is aggressively positioning Sparx as the premium play. Management targets Sparx to grow faster than the company average. Meanwhile, Hawai remains the volume driver but doesn’t inspire love — it inspires necessity.
💬 Quick poll: Do you wear Hawai slippers at home? If yes, you’re statistically likely to own a Relaxo product. Comment which brand you use!
04 — Financials Overview
Q3 FY26: The Numbers That Didn’t Add Up
