Relaxo Footwears is an attractive growth stock: revenue grew 19.3% and EBITDA 30.0% annually over the last three years
21-05-2016 • About Relaxo Footwears (
$RELAXO) • By InTwits
Pay attention to Relaxo Footwears as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Relaxo Footwears showed fast growth in the last financial year. Relaxo Footwears's revenue surged on 15.7% in FY2016. At the same time Relaxo Footwears well managed its profitability and showed even faster growth in EBITDA of 20.3% for the same period.
If we look for the longer period Relaxo Footwears showed fast revenue growth of 19.3% from FY2013 to FY2016 annually. EBITDA surged on 30.0% from FY2013 to FY2016 annually.
Relaxo Footwears ($RELAXO) financials for the last 5 years
| mln. INR | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 8,647 | 10,098 | 12,123 | 14,808 | 17,130 |
|---|
| Revenue growth, % | | 16.8% | 20.0% | 22.2% | 15.7% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 968 | 1,098 | 1,478 | 2,008 | 2,415 |
|---|
| EBITDA growth, % | | 13.5% | 34.6% | 35.8% | 20.3% |
|---|
| EBITDA margin, % | 11.2% | 10.9% | 12.2% | 13.6% | 14.1% |
|---|
| Net Income | 418 | 448 | 656 | 1,031 | 1,203 |
|---|
| Net Income margin, % | 4.84% | 4.44% | 5.41% | 6.96% | 7.02% |
|---|
| |
| CAPEX | 488 | 838 | 711 | 1,313 | 1,348 |
|---|
| CAPEX/Revenue, % | 5.65% | 8.30% | 5.87% | 8.87% | 7.87% |
|---|
| Debt | 1,752 | 2,254 | 1,984 | 2,394 | 2,364 |
|---|
| Cash | 7 | 17 | 56 | 44 | 22 |
|---|
| Net Debt/EBITDA | 1.8x | 2.0x | 1.3x | 1.2x | 1.0x |
|---|
| |
| ROIC, % | 21.2% | 19.9% | 24.1% | 28.3% | 28.1% |
|---|
| ROE, % | 27.3% | 23.2% | 26.7% | 32.0% | 28.4% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. The company showed small growth in EBITDA margin of 0.500 pp from 13.6% to 14.1% in FY2016. In the last 3 years the company showed fast EBITDA margin growth of 3.20 pp from 10.9% in FY2013 to 14.1% in FY2016.
Relaxo Footwears shows attractive ROIC at 28.1% for the last 12 months which assumes stable development model. Three years ago it was lower at 19.9%. For the last three years the average ROIC was 26.9%.
Net Income margin didn't change on 0 pp from 7% to 7% in FY2016. In the last 3 years the company showed fast Net Income margin growth of 2.60 pp from 4.40% in FY2013 to 7% in FY2016.
Relaxo Footwears operates at ROE of 28.4%. It's average ROE for the last three years was 29.0%.
Capital expenditures (CAPEX)
To this fast growth Relaxo Footwears had to invest in CAPEX.In FY2016 Relaxo Footwears had CAPEX/Revenue of 7.87%. The company showed decline of 0.428 pp from 8.30% in FY2013 to 7.87% in FY2016. It's average CAPEX/Revenue for the last three years was 7.53%.
Leverage (Debt)
The company has low debt level at 1.0x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period the company showed big decline in leverage of 1.07x from 2.04x in FY2013 to 0.97x in FY2016.
Peers in Footwear
Below we provide Relaxo Footwears benchmarking against other companies in Footwear industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 18.1% | 9.8% | 28.1% | 6.3% | |
| |
|---|
| Median (1 company) | 18.1% | 9.8% | 28.1% | 6.3% | |
|---|
| Relaxo Footwears ($RELAXO) | | 16.8% | 20.0% | 22.2% | 15.7% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| Sreeleathers ($SREEL2) | | | | 21.4% | |
| Superhouse ($SUPERHOUSE) | 10.8% | 10.0% | 11.7% | 10.3% | |
| |
|---|
| Median (2 companies) | 10.8% | 10.0% | 11.7% | 15.8% | |
|---|
| Relaxo Footwears ($RELAXO) | 11.2% | 10.9% | 12.2% | 13.6% | 14.1% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 5.4% | 4.5% | 2.4% | 6.7% | |
| Sreeleathers ($SREEL2) | | | | 0.1% | |
| |
|---|
| Median (2 companies) | 5.4% | 4.5% | 2.4% | 3.4% | |
|---|
| Relaxo Footwears ($RELAXO) | 5.6% | 8.3% | 5.9% | 8.9% | 7.9% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 16.7% | 14.1% | 19.2% | 15.1% | |
| Sreeleathers ($SREEL2) | | | 5.7% | 6.7% | |
| Nb Footwear ($NBFOOT) | | | | | |
| |
|---|
| Median (3 companies) | 16.7% | 14.1% | 12.5% | 10.9% | |
|---|
| Relaxo Footwears ($RELAXO) | 21.2% | 19.9% | 24.1% | 28.3% | 28.1% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 2.1x | 2.7x | 2.0x | 2.6x | |
| Sreeleathers ($SREEL2) | | -0.1x | -0.5x | -0.4x | |
| |
|---|
| Median (2 companies) | 2.1x | 1.3x | 0.8x | 1.1x | |
|---|
| Relaxo Footwears ($RELAXO) | 1.8x | 2.0x | 1.3x | 1.2x | 1.0x |
