Relaxo Footwears March 13, 2020 - ICICI Directcontent.icicidirect.com/mailimages/IDirect_Relaxo... · Relaxo Footwears RELFOO) BUY On a sustainable growth path… Incorporated in

Stock Tales are concise, holistic stock reports across wider spectrum of sectors. Updates will not be periodical but based on significant events or change in price.

Stock_____

TALES

March 13, 2020

ICIC

I S

ecurit

ies –

Retail E

quit

y R

esearch

Stock T

ale

s

March 13, 2020

CMP: | 660 Target: | 775 ( 17%) Target Period: 12 months

months

Relaxo Footwears (RELFOO)

BUY

On a sustainable growth path…

Incorporated in 1984, Relaxo is India’s leading footwear manufacturing

company (non-leather), boasting of largest capacity of 7.5 lakh pairs per day.

Over the years, Relaxo has consistently posted a superior performance,

depicting the fundamental strength of the company. While volumes have

trebled over the last decade (10 year CAGR: 10%), transformation from

being a basic hawai slipper company to a conglomerate of higher value

added product categories has led average realisation to double to | 125/

piece (10 year CAGR: 7.0%). Despite selling ~18.0 crore pairs annually,

Relaxo has mere 8% market share in fragmented footwear industry. Dual

strengths of strong manufacturing capability & robust distribution network,

has led Relaxo to consistently outperform peers and gain market share. We

expect volume growth momentum to come down to certain extent (owing

to high base effect) but still grow at a steady 8% CAGR in FY19-22E.

However, sustained improvement in product portfolio is expected to drive

realisation, revenue growth.

Sparx…game changer for Relaxo

Transition from a basic footwear manufacture (rubber slippers) to affordable

premium sports shoes has yielded positive results for Relaxo. Premium

affordable brands such as ‘Sparx’, ‘Flite’ and ‘Bahamas’ have been

instrumental in nudging realisation and profitable growth over the years.

Launched in 2005, brand ‘Sparx’ (ASP: | 300-1500) has been one of the

fastest growing brands with contribution of ~35% to overall revenues

(volume contribution: ~15%). The brand focuses on casual and sports

footwear category. In FY11, the company enhanced the value proposition of

its semi-formal brand ‘Flite’ through launch of PU-technology based

footwear (PU fetches better realisation vs. EVA). On the volume front, hawai

products still dominate the product mix with share of ~45%. Going forward,

with increase in share of value added products, we build in realisation

growth of 6% in FY19-22E.

Stepping up presence in west & south regions…

Relaxo has, over the years, established a healthy distribution network, with

650+ distributors catering to ~50000 retailers. While the north region

remains the main fortress for the company (50% of revenues), west and

south remain relatively underpenetrated markets. The company has put a

differential focus on market penetration in the west and south regions

through appointment of new distributors and dealers. On a low base, the

south market is growing at the fastest rate with the Sparx brand witnessing

significant traction in the region. Relaxo has promptly de-risked its business

model with a well-diversified distribution strategy. Modern formats (e-

commerce, LFS and exclusive store) now contribute ~20% of revenues. In

the last five years, volumes have grown at a CAGR of 12% to 18.4 crore

pairs. We expect volume to grow at a CAGR of 8% in FY19-22E.

Valuation & Outlook

Relaxo has a capital efficient business model, generating healthy asset turns

of 3.0x and EBITDA margins of 15%. Stringent control in NWC (60 days) has

led to average CFO/EBITDA at 55%. Subsequently, D/E ratio fell from 1.0x in

FY13 to 0.1x in FY19, with RoCE of 20%+. We expect Relaxo to be the

beneficiary of market share gains through a shift from unorganised to

organised players. We expect earnings to sustain healthy momentum & post

28% CAGR in FY19-22E. Healthy performance in a challenging scenario

instils confidence in the business model, which would enable the company

to command premium valuation multiple on a sustainable basis. We have a

BUY rating on the stock with a target price of | 775 (52x FY22E EPS).

Particulars

Particulars Amount

Market Capitalisation (| crore) 16,374.6

Total Debt (FY19) (| crore) 86.9

Cash (FY19) (| crore) 2.2

EV (| crore) 16,459.3

52 Week H / L 830 /357

Equity Capital (| crore) 24.8

Face Value (|) 1.0

Price Chart

0

2000

4000

6000

8000

10000

12000

14000

0

100

200

300

400

500

600

700

800

900

Feb-17

Jun-17

Oct-17

Feb-18

Jun-18

Oct-18

Feb-19

Jun-19

Oct-19

Feb-20

Relaxo NIFTY

Research Analyst

Bharat Chhoda

[email protected]

Cheragh Sidhwa

[email protected]

ICICI Securities | Retail Research 2

ICICI Direct Research Stock Tales | Relaxo Footwears

Company Background

Incorporated in 1984, Relaxo Footwears is one of the India’s largest footwear

company headquartered in Delhi. The company has established eight state-

of-the-art manufacturing facilities, with a capacity of manufacturing 750000

pairs of footwear per day (~19.5 crore pairs per year). Relaxo has a strong

presence in low priced footwear segment with more than 70% of sales under

the | 500 category. The product portfolio consist of only non-leather items

with EVA, PU and rubber being the key raw materials. It has a well spread

out distribution network consisting of 50000+ retailers and 385 company

owned-company controlled (COCO) stores. Geographically, it has a stronger

presence in Northern India contributing 50% of revenues, followed by east

(20% of revenues) and west and south regions together contributing 15% of

revenues. Apart from its flagship brand ’Relaxo’, the company, through

continuous investments in brand building activities, has successfully

established leading sub-brands such as ‘Sparx’, ‘Flite’ and ‘Bahamas’.

Exhibit 1: Portfolio of major brands

Fashionable & lightweight

footwear; Launched in

2005 (EVA), introduced

PU variant in 2012

Premium range of sports

shoes and sandals; Launched

in 2005

Flagship brand selling hawai

slippers (rubber); constitutes

major chunk of volumes

Launched in FY15, the brand

offers trendy and fashionable

hawai slippers

Range of school shoes for

boys and girls

Source: Company, ICICI Direct Research

As per industry reports, the Indian footwear industry is pegged at ~ | 63500

crore, which is expected to grow at CAGR of 12.0% to ~| 90000 crore by

2021. Out of the total footwear industry, the unbranded market accounts for

~55% of revenue while branded constitutes ~45% of the total footwear

industry. Of the overall footwear industry, 50% is dominated by the mass

segment (MRP< | 500), followed by 30% in the economy segment (MRP: |

500-1000). Relaxo Footwears predominantly caters to these two markets. To

differentiate itself from a plethora of mass unorganised players, branding

has become a critical aspect of Relaxo’s marketing strategy over the years.

Exhibit 2: Consistently invested in advertisement spends

29.62

55.08

47.27

53.37

66.1269.48

73.9376.76

3.4

5.5

3.93.6

3.94.3

3.8 3.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0

10

20

30

40

50

60

70

80

90

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

%

| crore

Ad expenses % to sales



ICICI Direct Research Stock Tales | Relaxo Footwears

Investment Rationale

Strong manufacturing backbone provides competitive edge

From a small base of a capacity of 2.9 lakh pieces per day, Relaxo has

increased the capacity of manufacturing footwear to 7.5 lakh pairs per day

as on FY19. It has eight state-of-the art manufacturing facilities. Six are in

Bahadurgarh (Haryana) and one each in Bhiwadi (Rajasthan) and Haridwar

(Uttaranchal). In tandem with the increasing demand, the capacity has

grown at a CAGR of 10% in FY09-19. The company operates at a utilisation

rate of 70% and touches 90% during peak demand. In-house manufacturing

facility assists in maintaining quality and pricing products competitively. To

be ready for future growth, Relaxo is adding capacity of additional 1.0 lakh

pairs per day in the Bhiwadi plant within the next three years. The capex for

the same is estimated at | 90 crore, which will be funded through internal

accruals.

Exhibit 3: Daily capacity and utilisation rate

0%

20%

40%

60%

80%

100%

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Pairs in lakh

Daily Capacity Util isation rate


Over the years, the company has focused on enhancing its manufacturing

operations through various initiatives such as;

introducing a dedicated line for manufacturing fast moving SKUs

implementing lean manufacturing techniques in a bid to minimise

wastages without compromising on productivity

implementing Maynard Operation Sequence Technique (MOST)

In-house manufacturing ensures maintenance of product quality with

competitive pricing. Sustained focus on optimisation of operations and

steady capacity utilisation rate has translated into healthy gross margins and

fixed asset T/O for Relaxo over the years.

Exhibit 4: EBITDA per pair

9.6

8.3

10.2

11.0

13.6

16.3

17.817.1

19.2

17.6

5.0

7.0

9.0

11.0

13.0

15.0

17.0

19.0

21.0

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

|


Exhibit 5: Gross block A/TO

2.29 2.252.35

2.26

2.48

3.12

3.48

2.44

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

(x

)



ICICI Direct Research

Stock Tales | Relaxo Footwears

Broadening distribution channel, enhancing pan-India footprint

Relaxo has, over the years, built a robust distribution network on a pan-India

basis. The products are retailed in over 50000+ touch points through

network of 650+ distributors. The company has maintained a strong

relationship with distributors through end-to-end distributor programmes

and consistent improvement of engagement levels. Relaxo has promptly de-

risked its business model with a well-diversified distribution strategy. The

distribution network comprises of multi brand outlets (MBOs), exclusive

Relaxo brand outlets (EBOs), large format stores (LFS) and e-commerce.

Exhibit 6: Revenue mix based on distribution mode

80%

7%

5%

5%3%

MBO

EBO

LFS

E-commerce

Exports


While the north region remains the main fortress for the company, west and

south remain relatively underpenetrated markets. Relaxo has over the years

made sturdy inroads to fortify its presence across regions through its

portfolio of brands. For instance, the Sparx brand has gained significant

traction in the south and west region in a quick span of time, while Flite and

Relaxo have a much stronger presence in the north and east. The company

has geo-tagged ~75000 outlets, which signifies an immense opportunity to

penetrate new territories through appointing new distributors and dealers.

Apart from its wholesale distribution model, Relaxo has cautiously added

exclusive stores over the decade. From opening its maiden store in FY05,

the company now has 385 stores as on 9MFY20, encompassing mainly non-

metro cities. Exclusive stores assist Relaxo in showcasing its entire product

range and brand portfolio. Furthermore, exclusive stores could act as a key

catalyst to enhance brand visibility and increase the share of premium

affordable SKUs in the product mix. Opening stores through franchise route

(currently eight) may perk up store addition pace, going ahead.

Exhibit 7: North dominates revenue

50

20

15 15

0

10

20

30

40

50

60

North East South West

%

Fastest growing regions

for Relaxo


Exhibit 8: Number of stores and annual addition

127149

168 179207

250270

302

343

385

27

2219

11

28

43

20

32

41 42

0

10

20

30

40

50

0

50

100

150

200

250

300

350

400

450

Stores addition





Focus on enhancing share of premium products…

Relaxo has displayed a consistent track record of achieving 15%+ topline

growth since FY06 (except for FY17 owing to demonetisation disruption)

with a healthy mix of volume growth and premiumisation. Over the years,

the company has outperformed peers (market share gains) through its

strong brand patronage and efficient supply chain management. While

hawai rubber slippers have translated to a healthy volume trajectory (higher

inventory turns), upgradation of product portfolio (shoes and sandals) and a

gradual price hike have led to an increase in blended realisations.

Launched in 2005, brand ‘Sparx’ (ASP: | 300-1500) has been one of the

fastest growing brands with contribution of ~35% to overall revenues

(volume contribution: ~15%). The brand caters to premium range of sports

shoes and sandals. Sustained investments in marketing spending

(appointing Bollywood brand ambassadors) has enhanced visibility and

perked volume growth for the brand. In FY11, the company introduced a

premium variant of ‘Flite’ brand (initially sold EVA variant) by setting up

incremental capacity of 50000 pairs/day in Haryana to produce PU based

high fashion footwear. The same has led to premiumisation within segments

(price range PU: | 200-300 vs. EVA: | 110-250). Similarly, in hawai rubber

slippers, the company in FY15 launched the brand, ‘Bahamas’ to cater to

trendy flip flop collection (ASP: | 130-230 vs. | 75-150 of Relax hawai). A

sustained improvement in product mix, coupled with a gradual price hike on

certain product lines (to negate the impact of recent custom duty hike) would

assist realisation growth, going forward.

We build in 6% realisation growth with ASP increasing to | 148/pair by

FY22E. Establishing exclusive stores and sales through e-commerce has

been instrumental in nudging sales of higher ASP SKUs. We expect a similar

trend to sustain, going forward. We model in 14% revenue CAGR in FY19-

22E, driven by 8% volume growth.

Exhibit 9: Revenue trend

864.7

1009.8

1211.8

1480.8

1713.0

1631.2

1941.1

2292.1

2589.6

2981.5

3403.4

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E

| crore





Exhibit 10: Volumes to grow at CAGR of 8%... 8.4

8.7

9.2 10.0

10.8

12.3

13.6

13.5 1

5.7 1

8.4

19.8

21.2

22.9

0.0

5.0

10.0

15.0

20.0

25.0

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20E

FY21E

FY22E


Exhibit 11: …with realisation improving 6% in FY19-22E

66

80

94 1

01 1

12 121

126

121

123

125

131 141

149

0

20

40

60

80

100

120

140

160

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20E

FY21E

FY22E


Benign RM costs, product premiumisation to aid margins….

Relaxo, through sustained focus on cost optimisation in manufacturing

facilities and enhanced yield improvement has achieved healthy profitable

growth. Furthermore, premiumisation of the product portfolio has resulted

in steady margin expansion. In tandem with the topline growth, EBITDA has

grown at a significant CAGR of 18% in FY14-19 (margins expanded 200 bps

to 14.1%). Major raw materials for the company include ethylene vinyl

acetate (EVA: 15-18%), polyurethane (PU: 14-15%) and rubber (7-8%). EVA

and PU are largely imported and (~40%) and are crude linked derivatives.

With a reversal in raw material prices, gross margins for YTDFY20 improved

significantly by 300 bps YoY to 56.0%. Premiumisation of product portfolio

and benign RM prices are key triggers for margin expansion, going forward.

We expect EBITDA margins to improve 250 bps in FY19-22E, translating into

EBITDA CAGR of 20%. The recent cut in corporate tax rate is a big positive

for Relaxo as it was hitherto a full tax paying company. Hence, we expect

PAT to grow 28% in FY19-22E.

Exhibit 12: EBITDA margin trend

146.6

200.6

241.1 230.9

302.1 324.3

405.3

486.0

565.0

12.1

13.514.1 14.2

15.6

14.1

15.7

16.3 16.6

0

2

4

6

8

10

12

14

16

18

0

100

200

300

400

500

600

FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E

%

| crore

EBITDA EBITDA Margin





Exhibit 13: PAT trend

65.6103.0

120.3120.0

161.1

175.4

251.7

309.6

370.7

0

50

100

150

200

250

300

350

400

FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E

| crore


Company expected to maintain its debt free status

Average capex over the last five years has been in the range of ~| 110 crore.

Higher sweating of assets has resulted in healthy A/TO of ~3x. Relaxo has,

over the years, maintained a stringent net working capital cycle of 60 days.

Despite liquidity stress in trade channels, receivable days remained robust

with average of ~27 days. A capital efficient business model has resulted in

healthy operating cash flow generation (average CFO/EBITDA: 55%). We

expect the company to generate healthy FCF, going forward, keeping the

company virtually debt free (D/E: 0.2x). We expect RoCE to improve 450 bps

to 27.6%. In tandem with increasing demand, we expect capex intensity to

sustain, going forward (will be funded through internal accruals).

Exhibit 14: Working capital trend

64.9

59.0

63.9

65.0

65.0

65.0

27.6

32.6

31.3

30.0

30.0

30.0

28.1

32.9

30.4

30.0

30.0

30.0

64.4

58.8

64.8

65.0

65.0

65.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

FY17 FY18 FY19 FY20E FY21E FY22E

Inventory Days Debtor Days Creditor Days Cash cycle


Exhibit 15: Return ratio trend

23.7

28.0

25.1

19.8 21.2

15.9

19.4 20.2 20.7

26.9 27.8

28.7

26.2

28.4

23.1

25.1 26.9 27.6

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

FY14 FY15 FY16 FY17 FY18 FY19 FY20E* FY21E FY22E

%

RoE RoCE





Exhibit 16: D/E ratio trend

1.0

0.6 0.6

0.4

0.20.2

0.1 0.10.0 0.0

0.0

0.2

0.4

0.6

0.8

1.0

1.2

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E

(x)


Key risk and concerns

Significant import dependence for raw material: Currently, ~ 40% of raw

materials used by the company are imported (EVA ~ 18%, PU ~ 15%

and rubber ~ 7%). Fluctuation in prices of these crude-linked products

and volatility in currency exchange rates can impact the margins of the

company. Furthermore, the government had recently hiked the custom

duty on footwear (from 25% to 35%) and parts of footwear (from 15%

to 20%). Inability to undertake price hike may impact gross margins

High level of competition may impact margins: Increased level of

competition from new entrants as well as unorganised players can

impact the profitability metric for the footwear industry. Relaxo, being a

known brand, can face price undercutting by new players and

unorganised players to grab market share, which may lead to pressure

on margins over the medium to long term

Liquidity stress in MBO channel: Among various distribution channels,

MBOs are facing liquidity stress leading to lower offtake across product

categories. From Relaxo’s perspective, it is significantly dependent on

the MBO channel with the same contributing ~ 80% of its revenues.

Continued liquidity stress in the MBO channel can adversely impact the

revenue growth trajectory and also inflate the working capital cycle




Financial Summary

Exhibit 17: Profit & loss statement

(Year-end March) FY19 FY20E FY21E FY22E

Net Sales 2,292.1 2,589.6 2,981.5 3,403.4

Growth (%) 18.1 13.0 15.1 14.2

Total Raw Material Cost 1,072.3 1,152.4 1,320.8 1,497.5

Gross Margins (%) 53.2 55.5 55.7 56.0

Employee Expenses 258.7 293.9 336.9 384.6

Other Expenses 636.8 738.1 837.8 956.4

Total Operating Expenditure 1,967.8 2,184.4 2,495.5 2,838.5

EBITDA 324.3 405.3 486.0 565.0

EBITDA Margin 14.1 15.7 16.3 16.6

Interest 6.9 7.0 6.5 5.0

Depreciation 62.4 70.8 77.6 84.4

Other Income 13.0 9.0 12.0 20.0

Exceptional Expense - - - -

PBT 268.0 336.5 413.9 495.6

Total Tax 92.5 84.8 104.3 124.9

Profit After Tax 175.4 251.7 309.6 370.7


Exhibit 18: Cash flow statement


Profit/(Loss) after taxation 175.4 251.7 309.6 370.7

Add: Depreciation 62.4 70.8 77.6 84.4

Net Increase in Current Assets -161.5 -118.4 -151.1 -173.4

Net Increase in Current Liabilities 41.9 22.2 32.5 34.9

CF from operating activities 118.2 226.3 268.6 316.6

(Inc)/dec in Investments 0.5 -1.3 0.0 0.0

(Inc)/dec in Fixed Assets -259.5 -113.2 -106.8 -106.8

Others 1.6 -0.3 -0.3 -0.3

CF from investing activities -257.4 -114.8 -107.1 -107.1

Inc / (Dec) in Equity Capital 0.4 12.4 0.0 0.0

Inc / (Dec) in Loan -38.4 -16.9 -40.0 -10.0

Others 175.5 -70.1 -74.3 -111.2

CF from financing activities 137.4 -74.6 -114.3 -121.2

Net Cash flow -1.8 36.9 47.2 88.3

Opening Cash 4.0 2.2 39.1 86.2

Closing Cash 2.2 39.1 86.2 174.5


Exhibit 19: Balance Sheet


Equity Capital 12.4 24.8 24.8 24.8

Reserve and Surplus 1,092.7 1,274.2 1,509.5 1,769.0

Total Shareholders funds 1,105.1 1,299.1 1,534.3 1,793.8

Total Debt 86.9 70.0 30.0 20.0

Non Current Liabilities 34.5 34.5 34.5 34.5

Source of Funds 1,226.4 1,403.5 1,598.8 1,848.3

Gross block 941.1 1,041.1 1,141.1 1,241.1

Less: Accum depreciation 140.6 203.0 273.8 351.4

Net Fixed Assets 800.5 838.0 867.2 889.7

Capital WIP 10.2 15.0 15.0 15.0

Intangible assets 48.9 48.9 48.9 48.9

Investments 0.2 1.5 1.5 1.5

Inventory 401.5 461.2 531.0 606.1

Cash 2.2 39.1 86.2 174.5

Debtors 196.6 212.8 245.1 279.7

Loans & Advances & Other CA 136.9 179.3 228.4 292.0

Total Current Assets 737.2 892.4 1,090.7 1,352.3

Creditors 190.9 212.8 245.1 279.7

Provisions & Other CL 187.2 187.4 187.7 188.0

Total Current Liabilities 378.1 400.3 432.8 467.7

Net Current Assets 359.1 492.1 657.9 884.6

LT L& A, Other Assets 7.6 7.9 8.2 8.6

Other Assets 0.0 0.0 0.0 0.0

Application of Funds 1,226.4 1,403.5 1,598.8 1,848.3


Exhibit 20: Key ratios


Per share data (|)

EPS 7.1 10.1 12.5 14.9

Cash EPS 9.6 13.0 15.6 18.3

BV 44.5 52.4 61.8 72.3

DPS 0.9 1.8 3.0 4.5

Cash Per Share 0.1 1.6 3.5 7.0

Operating Ratios (%)

EBITDA margins 14.1 15.7 16.3 16.6

PBT margins 11.7 13.0 13.9 14.6

Net Profit margins 7.7 9.7 10.4 10.9

Inventory days 63.9 65.0 65.0 65.0

Debtor days 31.3 30.0 30.0 30.0

Creditor days 30.4 30.0 30.0 30.0

Return Ratios (%)

RoE 15.9 19.4 20.2 20.7

RoCE 23.1 25.1 26.9 27.6

Valuation Ratios (x)

P/E 93.3 65.1 52.9 44.2

EV / EBITDA 50.8 40.5 33.6 28.7

EV / Sales 7.2 6.3 5.5 4.8

Market Cap / Revenues 7.1 6.3 5.5 4.8

Price to Book Value 14.8 12.6 10.7 9.1

Solvency Ratios

Debt / Equity 0.1 0.1 0.0 0.0

Debt/EBITDA 0.3 0.2 0.1 0.0

Current Ratio 1.9 2.1 2.3 2.5

Quick Ratio 0.9 1.0 1.1 1.2





RATING RATIONALE

ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its

stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,

Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as

the analysts' valuation for a stock

Buy: >15%

Hold: -5% to 15%;

Reduce: -15% to -5%;

Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]




ANALYST CERTIFICATION

I/We, Bharat Chhoda, MBA; Cheragh Sidhwa MBA , Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the

subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned

Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report

Terms & conditions and other disclosures:

ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a Sebi registered

Research Analyst with SEBI Registration Number – INH000000990. ICICI Securities Limited Sebi Registration is INZ000183631 for stock broker. ICICI Securities is a subsidiary of ICICI Bank which is India’s largest private sector bank

and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on

www.icicibank.com

ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship

with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the

securities or derivatives of any companies that the analysts cover.

Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as

such, may not match with the recommendation in fundamental reports. Investors may visit icicidirect.com to view the Fundamental and Technical Research Reports.

Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.

ICICI Securities Limited has two independent equity research groups: Institutional Research and Retail Research. This report has been prepared by the Retail Research. The views and opinions expressed in this document may or may

not match or may be contrary with the views, estimates, rating, target price of the Institutional Research.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected

recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would

endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI

Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in

circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein

is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers

simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting

and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who

must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient.

The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities

whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks

associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.

ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months.

ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-

managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.

ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any compensation or other

benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of

interest at the time of publication of this report.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of

the research report.

Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this

report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.

Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.

We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or

use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in

all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Documents

Relaxo Footwears March 13, 2020 - ICICI Directcontent.icicidirect.com/mailimages/IDirect_Relaxo... · Relaxo Footwears RELFOO) BUY On a sustainable growth path… Incorporated in