Relaxo Footwears logged a modest 2.8% uptick in second-quarter net profit to ₹37 crore on Friday, caught between double-digit top-line growth and persistent raw material inflation.
Revenue from operations advanced 11.6% to ₹701.6 crore during the July–September quarter, compared with ₹628.5 crore recorded in the corresponding period of the previous fiscal year, according to regulatory filings. Operating profit before depreciation, interest, and taxes climbed 5.2% to ₹85.3 crore from ₹81.1 crore. Yet profitability took a hit. Operating EBITDA margins compressed by 70 basis points to 12.2%, down from 12.9% a year ago, pinched by geopolitical disruptions in supply chains and rising wage bills.
Shares of the footwear manufacturer reacted quietly on Dalal Street. The stock settled at ₹300.00 on the BSE, down ₹0.60, or 0.20%, as traders weighed steady volume dispatches against contracting operational spreads.
Management attributed the margin compression directly to unpredictable feedstock cycles and sluggish consumption across rural and semi-urban belts. Raw material expenses fluctuated sharply throughout the quarter, exacerbated by maritime logistics bottlenecks and oil price volatility linked to prolonged hostilities in West Asia. Concurrently, elevated factory payrolls added friction to factory-gate economics.
Ramesh Kumar Dua, Chairman and Managing Director of Relaxo Footwears, outlined the operating backdrop in the company's financial filing:
We are pleased to report a steady performance in Q2 and H1 FY27, with growth in Revenue while broadly maintaining EBITDA and Profit After Tax levels. This performance was supported by our diversified brand portfolio, extensive distribution network and disciplined execution amid continued inflationary pressures and softness in mass-market demand.
Dua confirmed that defensive cost controls helped cushion the blow:
Maintaining profitability was challenging during the period, as raw material price volatility arising from the continuing conflict in West Asia, together with higher labour costs, exerted pressure on margins. We remained focused on cost management while making selective investments in brand building, distribution capabilities and retail expansion to strengthen the business over the long term.
| Relaxo Footwears Financial Scorecard | Q2 FY27 | Q2 FY26 | YoY Change (%) | H1 FY27 | H1 FY26 | YoY Change (%) |
|---|---|---|---|---|---|---|
| Revenue from Operations | ₹701.6 Cr | ₹628.5 Cr | +11.6% | ₹1,407 Cr | ₹1,283 Cr | +9.6% |
| Operating EBITDA | ₹85.3 Cr | ₹81.1 Cr | +5.2% | ₹193 Cr |
Market Context: Footwear manufacturers across India continue to navigate uneven volume recoveries. While premium and urban casual wear show resilience, price-sensitive rural consumers have pulled back discretionary spending, forcing mass-market leaders to absorb procurement cost surges rather than risk full price pass-throughs at retail checkouts.
To counter wholesale distribution friction, the company accelerated its capital allocation toward direct-to-consumer brick-and-mortar footprint. Relaxo added 16 exclusive brand outlets (EBOs) during the three-month period, expanding its dedicated retail network to 445 stores across target geographies.
The board reaffirmed its target to scale that footprint to 500 operational EBOs before the close of fiscal 2027.
Beyond sheer store counts, the company revamped its physical layout format. The re-engineered stores introduce modular merchandising systems, broader sightlines, and dedicated brand zones engineered to highlight higher-ticket, margin-accretive product categories.
For the combined first half of the financial year, total turnover reached ₹1,407 crore, marking a 9.6% increase over the ₹1,283 crore achieved in H1 FY26. First-half EBITDA stood at ₹193 crore with an operating margin of 13.8%, yielding an aggregate half-year profit after tax of ₹92 crore.
As the company enters the second half of FY27, execution hinges on whether urban retail shelf expansion and refreshed storefronts can outpace lingering mass-market consumption hurdles.
| ₹180.2 Cr |
| +7.1% |
| EBITDA Margin (%) | 12.2% | 12.9% | -70 bps | 13.8% | 14.0% | -20 bps |
| Net Profit After Tax (PAT) | ₹37 Cr | ₹36 Cr | +2.8% | ₹92 Cr | — | — |
| PAT Margin (%) | 5.3% | 5.7% | -40 bps | 6.5% | — | — |