Mahesh Shah
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Relaxo Footwear Ltd -- Management Meet + Research Note

Mahesh Shah at 03:01 PM - Jun 29, 2012 ( ) Views: 792

Link to 17-page Detailed Research Note on Relaxo Footwear Ltd.

http://www.scribd.com/doc/98164530

 

Link to Recent Management Meet Update on Relaxo Footwear Ltd. by Nirmal Bang Institutional Equities Research :

http://www.scribd.com/doc/98175248

 

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Attached is a 17-pages Research Note on Relaxo Footwear Ltd. [ NSE – RELAXO ; BSE – 530517 ], India's 2ndLargest Footwear company next to Bata India Ltd.. Also attached is the recent Management Meet Update from Nirmal Bang- Institutional Equities Research on the same company.

 

The company needs thoughtful consideration by any serious fund manager because of its consistent 20 % + RoE each year since last 5 years as also an exceptional growth track-record wherein company has increased its Sales at 5 Years' CAGR of 29,63 % and PAT at 5 Years CAGR of 45.54 %.

 

A complete, sea change, in marketing strategy of the company by recent engagement of top-notch celebrities like Salman Khan and Akshay Kumar to endorse its brands, print and media ads of which are to be aired from July'2012 onwards ; as also, substantial softening in key raw material prices (EVA & Rubber) are the factors that provide atleast a 3 years visibility of 20 % + p.a. Revenue growth with improving margins.

 

Reasonable Scale of Operations at INR 864 cr. (FY12) with debtor days at ~10 days signify a great brand-pull in the marketplace for company's key brands and inspite of that, the company quoting at substantial discount to Bata India Ltd. as also its smaller peer Liberty Shoes Ltd. necessitate a closer look at the company as an investment prospect.

 

Views are Invited from fellow members on this promising Indian Consumption Story.

 

Rgds.

 

Contents of this Note :

 

Key Investment Arguments In Favour & Against Relaxo Footwear Ltd.

( Relaxo Footwear Ltd. - Mcap – Rs. 580 cr. with FY13e Revenues of Rs. 1036 cr. ) Page 2-3

 

 

Why it Deserves to be a Part of One's Core Portfolio

Management Overview

( Core Professional Management )

 

3, 5, 10 & 15 Years' CAGR

( Revenue, EBITDA, PAT, Fixed Assets, Debt, Equity, Share Price )

 

Evolution of the Company

( From Trading to Marketing to Manufacturing to Branding to Retailing )

 

 

Last 5 Fiscals Performance post Launch of 'Sparx' and 'Flite' Brands ( Core Revenue, EBITDA & PAT alongwith each Fiscal's YoY Growth )

 

 

Brand-Specific Revenue Growth

( Hawaii, Flite & Sparx )

 

Brand-Specific Volume Growth

( Hawaii, Flite & Sparx )

 

Retail Stores Under Operation

( with Revenue Per Store Trend )

 

Exports' Revenue Growth

 

Assessment of Brand Marketing Effectiveness by Appeal of Celebrity Roped-In for Specific Brand

( Salman Khan for Hawaii & Akshay Kumar for Sparx )

 

Assessment of Quarterly Raw Material Price Fluctuations and its Effect on Company's Margins

( Actual From Q1FY10 till Q1FY13 and then Estimate for rest of FY13 )

 

Peer Comparison

( Bata India Ltd. & Liberty Shoes Ltd. )

 

Conclusion

( A Domestic Consumption Oriented Company on Verge of Significant Rerating )

 

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 contd... in 17-pages research note


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