Relaxo Footwears Ltd is the largest footwear manufacturing company in India.
The company achieved a turnover of Rs. 4180.60 mn for Q2 FY17 as against Rs. 3863.30 mn in Q2 FY16, up by 8.21%.
During the 2nd quarter, net profit stood at Rs. 273.30 mn from Rs. 270.70 mn in the corresponding quarter ending of previous year.
During the 2nd quarter, EBIDTA stood at Rs. 559.10 mn as against Rs. 520.60 mn in the corresponding period of the previous year, up by 7.40%.
Profit before tax (PBT) stood at Rs. 392.00 mn in Q2 FY17 as against Rs. 390.70 mn in the corresponding quarter of the previous year.
EPS of the company stood at Rs. 2.28 in Q2 FY17 against Rs. 2.26 in the corresponding quarter of the previous year.
For 6 month period of F Y17, net profit stood at Rs.635.70 mn as compared to Rs. 630.44 mn for the Six month ended of previous year.
In H1 FY17, Net sales stood at Rs. 8518.10 mn as compared to Rs. 8399.20 mn in H1 FY16.
Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 23% over 2015 to 2018E, respectively.
OUTLOOK AND CONCLUSION:
At the current market price of Rs. 404.15, the stock P/E ratio is at 36.70 x FY17E and 31.96 x F Y18E respectively.
Earning per share (EPS) of the company for the earnings for F Y17E and FY18E is seen at Rs. 11.01 and Rs. 12.64 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 23% over 2015 to 2018B respectively.
On the basis of EV/EBITDA, the stock trades at 19.00 X for FY17E and 16.80 X for FY18E.
Price to Book Value of the stock is expected to be at 8.11 x and 6.59 x for FY17E and FY18E respectively.
Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.
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