RELAXO - Relaxo Footwears Ltd. Share Price

Major Questions and Answers from the Q&A Section

1. Question (Devanshu Bansal): "What is the anticipation for growth pickup post-GST reduction? And how long do you foresee to flush out high-price inventory?"

   Answer (Gaurav Kumaar Dua): "The reduction in GST from 12% to 5% will enhance our competitiveness, enabling growth against unorganized competition. We carry about 30-35 days of inventory, with distributors holding around 45 days. We expect to see effects from December onward as they liquidate the old high-MRP inventory."

2. Question (Devanshu Bansal): "What reasonable growth expectation do you foresee for Q4 and FY '27 after muted trends?"

   Answer (Ramesh Kumar Dua): "In Q3, we expect to see a decline of around 3-4%. However, Q4 may show growth as conditions improve. Consumer sentiment remains muted, but the competitive positioning post-GST gives hope for better performance next year."

3. Question (Shraddha): "Has the other income increase this quarter been due to any one-off item?"

   Answer (Prince Jain): "No, the increase is due to our higher treasury base compared to last year and some minor hedging gains. We expect similar other income numbers in the future, especially if interest rates decrease."

4. Question (Sameer Gupta): "How would you assess normalized growth for this quarter amidst multiple factors affecting sales?"

   Answer (Prince Jain): "Q2 reported a volume decline of about 7.5%. Normalizing for channel inventory effects, the growth could have been better by approximately 200-300 basis points, but this is a rough estimate due to uncertain distributor stock levels."

5. Question (Akhil Parekh): "Has the implementation of BIS impacted Chinese imports?"

   Answer (Ramesh Kumar Dua): "BIS implementation has not significantly reduced Chinese imports in our category. While we have registered with it, it has had a limited impact on our key brands."

6. Question (Prerna): "What is the current split between open and closed footwear, and do you plan to increase capacity?"

   Answer (Gaurav Kumaar Dua): "Closed footwear accounts for about 20% of our sales. We currently have sufficient capacity and don't have immediate plans for expansion, focusing instead on operational efficiencies."

7. Question (Sameer Gupta): "What strategies are in place to regain market share after recent declines?"

   Answer (Ramesh Kumar Dua): "The primary reason for our declines was GST adjustments. With rates lowered, we expect to compete better and regain market share through product innovation and maintaining consumer relevance."

8. Question (Devanshu Bansal): "How are you handling low-margin situations due to reduced MRPs post-GST?"

   Answer (Ramesh Kumar Dua): "Trade discounts remain unchanged post-GST, ensuring no disadvantage for partners. They will focus on overall sales growth, and the increased volume will offset lower per-unit margins."