Thanks, Jitesh. Good evening, everyone.

At IIFL Capital, it is our pleasure to host the management of Relaxo Footwears. From the management, we have Mr.

Ramesh Kumar Dua, Chairman and MD; Mr. Gaurav Kumaar Dua, Co-CEO and Whole-Time Director; Mr.

Ritesh Dua, Co-CEO; and Mr. Sushil Batra, Executive Director.

We also have Mr. Ankit Jain, Company Secretary and Compliance Officer.

Without taking more time, let me hand it over to Mr. Ankit Jain for the opening remarks.

Over to you, Mr. Ankit.

Thank you, Sameer, for the introduction. Myself Ankit Jain, Company Secretary and Compliance Officer of the company.

Good evening, everyone, and thank you for joining us on Q4 and FY '26 earnings call. We appreciate your continued interest in our company, and we are pleased to walk you through our operational and financial performance for the quarter and financial year ended on 31st March 2026.

The earnings release and investor presentation are already available on the stock exchange website and our website for your reference. Before we move into Q&A session, I would like to highlight some of the key performance metrics for Q4 and FY '26.

Revenue from operations stood at ₹751 crore in Q4 FY '26 as against ₹695 crore in Q4 FY '25, an 8.1% year-on-year growth. The revenue growth was driven by a strong volume growth amidst a recovery in general trade channel, alongside continued growth in retail, e-commerce, and large-format retail channel.

EBITDA for the quarter stood at ₹124 crore, registering a growth of 10.6% year-on-year. EBITDA margin was at 16.5% in Q4 FY '26 as compared to 16.1% in Q4 FY '25.

The growth was supported by continued focus on operational efficiencies, backend optimization initiatives, and prudent cost management measures undertaken by the company, despite the dynamic industry environment. Profit after tax for Q4 FY '26 stood at ₹68 crore compared to ₹56 crore in Q4 FY '25, registering a growth of 20.4% year-on-year.

PAT margin expanded by 92 basis points year-on-year to 9%, reflecting the company's sustained focus on profitable growth. For FY '26, revenue from operations stood at ₹2,702 crore as compared to ₹2,790 crore in FY '25.

EBITDA for FY '26 stood at ₹374 crore, while EBITDA margin stood at 13.8% in FY '26. Profit after tax for FY '26 stood at ₹179 crore as compared to ₹170 crore in FY '25, with an increase of 5.3% year-on-year growth.

PAT margin in FY '26 stood at 6.6% in FY '26 as compared to 6.1% in FY '25. Now going forward, while the momentum exiting FY '26 is encouraging, we must tread with caution due to the uncertain external environment amidst the ongoing geopolitical situation causing inflationary pressure, which could affect consumer sentiment.

While the company has recently taken some calibrated price increases to offset input cost inflation, the full impact on demand and consumption pattern is still evolving and requires close monitoring. To conclude, while we are cautious about the near-term environment, we remain constructively optimistic about financial year 2027 performance, and we are committed to deliver a sustainable performance.

Now thank you. You may please open the floor for questions now.

Over to you, Sameer.

Hi, sir. Thank you for the opportunity.

Hi, and thanks for taking my question. Firstly, sir, how should one read this result?

There has been a GST rate reduction wherein there was down-stocking in the previous quarters, there would have been some up-stocking this quarter. Also, distributor count, if I see your presentation, has gone up from 550 last quarter to 630 this quarter.

If you adjust for these impacts, or let me put it this way, if you can give any indication on growth at the retail level, it would be helpful for us to understand the exact quantum of growth which is going on.

Hi, Sameer. This is Gaurav Dua.

You have correctly said that there was quite optimism in the market in quarter four. As you have mentioned, that GST from 12% became 5% and distributor were carrying the stocks.

Now, more or less stock has been liquidated through the pipeline, and we're seeing a good recovery in quarter four.

Let's say the retail, you have reported an 8% growth, but this would also include distributor taking stock, filling their inventory. Last quarter was zero.

Suffice to say that the actual normal growth rate is somewhere in between 4%? Actually,

the full impact we started seeing after December onwards. You can definitely say that 5% to 6% we were able to grow in two quarters.

Got it, sir. That explains.

Second, sir, and I think Ankit mentioned this in his opening remarks, West Asia impact. Input cost inflation, if you could quantify what kind of input cost inflation you are facing in your cost basket?

Input cost is on both side. One is I think material which is impacting everyone, and then in north few states, labor cost has also increased by government.

We are working on that. Raw material prices are again I think settling down and coming down also.

We are working with overall impact how much it will impact, but definitely it's a substantial impact which we are foreseeing. We have passed on this through the price increase majorly.

Things should be I think more or less at par with the cost increase, and let's see how it works.

Sir, one, if you could quantify the inflation. Let's say if your cost was 100 in the previous quarter, in 3Q or 4Q, where is it trending today?

Is it 110? Is it 105?

Labor cost I can understand. Second is that what kind of quantum of price hikes have you passed on?

Sameer, we have taken 2 to 3 price increase in the market, and it was a gradual increase. Some was because of raw material and one was because of the labor which increased in Haryana.

Roughly around 15% to 18% is the increase. In some category it is lesser and in some category it is more.

We had calibrated what can be passed on in the market and took the call.

On a blended level, you have taken a 15% to 18% price increase at a consumer level? Correct,

correct. You're right.

Your cost increase would be roughly similar?

Around 12% to 15% I think will be the price increase, including I think all states and all materials on the cost of goods manufactured. That's what we are expecting, plus labor cost.

You have taken a higher price increase versus the cost inflation?

No, no. It's at a price increase on the FG at a blended rate, cost of goods which we are manufacturing.

There is a price increase on both side: one is the labor side, which is almost around 25% to 30% price increase on the labor in one state, in other state it's around 10%, 10% to 15%. It's a mix of all these things.

That is the one part increase in the cost. Then material cost, which went up like anything.

So, 120 went up to 240, 250, like that. Now things are settling and coming down.

Overall, we have to review everything. Price increase, as on date, because we had inventory, so that material impact was not much in first month, at least, April.

Labor has definitely it has increased. It's a mix of so many things, we can say around 15% to 20% increase will be there overall on the cost side as on date.

Got it. So, 15% to 20% is the increase on cost side, and you have passed it on to the consumer entirely, your margin is protected in a way.

That is the intent and we're trying to, yes.

Got it, sir. I'll come back in the queue for follow-ups.

Thanks a lot.

Hi, sir. Thank you once again, and apologies for network issues.

Sir, I got three questions. Firstly, sir, can you give us some understanding on what has really changed post this GST 2.0 in terms of competitive intensity and demand front?

Archana, that we have mentioned before that the GST became from 12% to 5%. Branded players, we became more competitive in the market.

That the taxes came down, it helped the organized players. Secondly, there was good demand recovery in quarter four at consumer level.

Because of these two factors, we could see the growth level coming back.

Sir, has the demand continued in the first two months of Q1? Can you repeat the question?

Has the demand continued for the first two months for Q1 or you see some subdued patches here and there?

It's too early to say, but definitely April and May was better. May is still going on, and let us see how June goes.

Okay. Sir, earlier we spoke about product premiumization by getting into sneakers and maybe high-value Sparx portfolio.

How's that going on, sir? How has been the response?

Any new products which can add to margin expansion on the card?

Definitely, we are widening our premium playbook, and through sneakers and offering lifestyle-led products. Our main objective is that we do not have to lose the relevance in mass category, and plus, we have to premiumize.

We are making our product mix accordingly. Uh-huh.

Anything planned for FY '27, or it's still progress? See,

this is a continuous process of premiumization. Like we have discussed before also, that we are coming up with the athleisure range, and we are coming with more price point.

For example, in Sparx, it was shoes in ₹999 to ₹1,700. Now we are thinking how we can cross offer more product at ₹2,500 also.

The price range and the premium portfolio, we are increasing. Right,

right. Sir, lastly, any guidance on capex for this year and next year?

Capex, we I think incurred around ₹130 crore last year. Next year also.

Last year, we incurred around ₹130 crore. Next year, we have planned around ₹180 to ₹200 crore.

That's for next year.

That will be used for basically the existing capacity and not for any new capacity addition, right?

It will be mix of both, because it's a big amount we spend upon the mold. It's not a increase of capacity.

Then we are making one, I think, administrative office also. Some money will go there.

Some wear-tear and some changes in the machine. There is no big capacity expansion definitely, but good amount will be spent on the mold side also.

Sure, sir. Sir, thank you so much, and I'll come back again in the queue.

Thank you, sir.

Hi, sir. Good evening.

Congrats on good set of numbers. If you look at it, this is the first quarter after the eight quarters where you've seen an increase in volumes.

Is it only regarding the GST cuts that you've seen, or how is it?

Like what we discussed before, can you hear us? Can you hear us?

Yes, sir. I can hear you now.

Yeah.

Avinash. It was both things.

We are still an open footwear dominant player. Because of the season, Q4 and Q1 is bigger for us.

Second thing was definitely GST. Thirdly, there was a good demand in the market.

Okay. Second thing, if I have heard it right, you have taken price hikes in the range of 18% to 20%.

Is this right? Correct,

correct. 15% to 18%.

Yeah. We have seen a similar situation in FY '22 where we had to take 20% plus kind of price hikes and that has impacted our volume significantly.

Last time also we argued that Relaxo maintains a 6 months of inventory of raw materials while other unorganized players are maintaining lesser quantum. How is raw material cost figures right now?

This time we are cautious in buying raw material. We have not bought like what we did 2 years back.

We are very cautious in buying and passing the price to the consumer. We are watching the trends, what is happening in the market, and it is across industry, footwear industry.

All the players have taken the increase of prices, not only Relaxo.

Last time, raw material prices hike was very steep. It went from ₹100 to ₹300.

Now this time it is there, but not that I think high level. Now things are settling also.

It is I think almost coming down every day,

major raw materials. Even today, I think things are settling globally also, but it will take time.

Let's hope things should be much better. We don't see repetition of last time what happened.

Okay. If things normalize, then you would be rolling back these price hikes, right?

No, I don't think there is any possibility that raw material will soon settle down. This price increase will remain.

Okay. I'm not asking from the next quarter's perspective or something in that sense, but if you look at next 2 years or 3 years, how should we look at the gross margins?

Hello?

Gross margin, definitely, we will try to improve overall, but we have to be very cautious about the passing the cost to the consumer. We have to be competitive.

We have to see the competition also. Gross margin definitely intent is to improve and overall operating margin should also improve.

That's what we are trying. It will be a just journey on the betterment side.

What would be the levers of that improvement? That's what I'm asking.

Like we have discussed before, we are going to open 100 new outlets this year, and we are going to change our product mix, plus there will be some more addition in terms of distributor and retailers. A lot of action we're going to take to at least grow the market and margin.

Sir. Congrats on the way ahead.

I'll join the queue.

Hello, am I audible?

Right. Congratulations on good set of numbers.

Recently and right now also, you mentioned that there is an increase in focus on the women and the kids category. If you could let us know the current contribution and the medium-term target which the management has for the same?

Can you repeat the question?

There is more focus on women and the kids category. Current contribution and the medium-term target.

Like

for us, men's contribution is 70%, 25% is ladies, and 5% is kids. Our more focus will be on ladies and kids to improve this percentage.

Right now it is quite low, but definitely it's going to improve.

Sure, sure. Thank you so much.

Also, similarly, for the premium products also, if you could help with the current contribution?

We were playing at ₹999 in sport shoe till ₹1,800. Now this time, we have rearranged our portfolio and we're going to launch more products starting from ₹999 without leaving that base till ₹2,800 MRP.

Can't say exactly what number contribution we will get from the premium portfolio. It's too early to say upon that.

Okay. Sure.

Thank you so much. I'll join back in the queue.

Hello?

I can hear you.

Hi, sir. Just a follow-up.

So, 15% price hike, just wanted to understand the thought process. Now, when I look at our inventory, we have 75 days on sales, so that will translate to around 150 days on COGS.

Aren't we a little early in taking sharp price hikes because if I look at the competitors, let's say Bata and Redtape and Metro, we haven't seen any major price hikes announced over there so far. One, do you foresee a volume impact in the near term?

Let's say volume growth momentum will moderate substantially, might even decline in the coming quarters? Do you foresee that?

Two, just wanted to understand the urgency in taking price hike, sir.

There were two reasons what we have mentioned before. One was the raw material which shot up like anything in the month of April itself.

Secondly was the wages, the increase in Haryana, the wages were more than 30% increase in the wages. There were the two reasons that we had to take the price increase.

Regarding the raw material, definitely, we are seeing that raw material is now softening. The wage increase, we don't think it will come down.

The cost pressure will be there in terms of that price hike cannot be taken back. Secondly, depends upon the other players which state they are operating from.

We cannot comment upon that what impact of wages they had. Raw material, it is across.

Got it. Let's say when you say RM will soften, the wage cost is still much higher and do you foresee taking price cuts or increasing trade discounts if the raw material were to come down significantly?

Else you will see a margin expansion, right?

We are closely monitoring the market, how the uptake will be in the market. It's too early to give any guidance on this.

Fair, sir. Got it.

That's all from me.

Thank you.

Thank you so much for the opportunity again. If you could help us with any future guidance for modelling purpose, revenue as well as the margins, considering this is the quarter in many times that the company has reported such a good number of growth?

Yeah. Thank you.

Can you repeat the question, please, Shraddha?

Any future guidance?

Outlook, we are confident. Definitely, we will sustain what we performed in Q4, but definitely geopolitical situations are so uncertain, it's tough to give a very just solid statement.

Still, we are very confident we'll maintain. Definitely, intent is to improve our margins.

Growth will come, and there is a price increase. Volume, we have to maintain that also.

We are watching all that I think competitor internally, geopolitical, and we are confident definitely last two quarter if you see, Q4 is much better. Things have started coming up, and consumer sentiments are also not that down.

GST is helping us, and overall, our treasury and overall balance sheet, and so many factors are favoring us. We are very confident future, at least, near future should be, I think, good one.

Sir, any numbers if you could help us to quantify?

Quantify, the last year we maintained operating margin of around 13.8%, that is a full year. Q4 was much better.

We don't expect Q4 will be repeated, definitely. We intend to do better than last year overall operating margin, which is 13.8, it should be better, maybe 1% plus.

That is the intent, definitely, we're trying to.

Sure, sir. Thank you so much.

Anything if you could highlight majorly on the GT, since you have mentioned that the GT has helped grow? Any changes or anything which you have witnessed?

In GT, what we have seen is that there is recovery of demand in quarter four, and it is going to continue what we are seeing. We are closely monitoring after the price increase how the consumer reacts.

We're keeping a close watch. Let's see.

Because we have changed the product mix also, we launched some products in different categories not to leave the earlier price point also.

The newer would be the higher price points, like you already mentioned?

Correct.

Sure. Thank you so much.

Moreover, we have

Yes. Yeah.

Moreover, we have planned for expansion in our own EBO model. We intend to open 100 stores, that is I think plan, and we are doing some new format and new redesigning of the shops with new good experience.

We have done one trial, getting good response. After that, we are very confident good footfall and good return, profitable return should come from that segment.

On the e-commerce side also, we are working. A lot of things we have done.

A lot of growth we expect that will come from that channel. These are, I think, new initiative will add a lot of growth.

We are confident things should be better.

Sure, sir. Also, since you mentioned the EBO also, is there any target like Tier 1 cities, Tier 2, and 3 cities?

If you have any plans, or if you could help us understand more about the same?

Now we are going to open outlet across India. Like earlier, it was basically north- and east-based.

Now we have identified some gaps in west, and going forward, definitely, we will enter southern market also, understanding the consumer preferences, yeah.

Okay. Sure, that was quite helpful.

Thank you so much, and all the best for future, sir. Thank you.

Hello? Sir, congratulations on good set of numbers.

I have a couple of questions. Apologies, I joined the call late.

Can you explain the reason why margins were higher in this quarter? Is it some specific inventory gain or we've taken price hike, and that's why we don't expect this to sustain?

What is the reason?

Your question is why the margin was higher in quarter four?

Yes, sir.

They are two, three reasons for that. One was that a lot of backend work is done in the plant to reduce the cost.

Secondly, our volume have grown a lot, the fixed cost remained same, contribution has increased because of the volume and value growth. Plus, we have curtailed or reduced the discount given in the market also.

There is no inventory gain or anything of that sort?

We have taken a small increase in quarter four, that is also one of the reason of improvement in margins.

Okay. Sir, my second question was, we mentioned somewhere in the call that we plan to set up 100 new EBOs.

Can you explain us that what is the timeline to do this network expansion? As of now, how many EBOs do we operate?

As of now, we have around 400 plus EBOs, but with new design and new format, we have started. We did one trials.

We are very aggressive. In first half, we will be able to open at least 30%, 40% out of 100.

By December, most of the should be ready by December, that is the intent. Okay.

Sir, this 400,

in this 400, we will add 100, or this 400 mein we will redesign, and the number will remain still 400? We will add new 100.

We will add new 100, and 400 will continue with the same format, and we will change some, but all 100 will be new one.

Okay. Sir, my last question is, our volume has been more or less [unclear] crore pairs versus 17, 18 crore pairs.

A Q4 versus Q4, the volume is significant. I wanted to that what do you feel about volumes in the next [unclear]?

Sorry. Hello?

Sir, can I repeat the question now?

Yes, Yogesh.

Yeah. Sir, I was saying that last year to this year, our volumes have more or less remained flat, but this quarter, we've seen a significant jump in the volumes.

I wanted to know what do you feel about the volumes for the next 2 years? How do you see that happening?

Not very guidance, but qualitatively, what do you feel about volumes? Secondly, do you think that the mix will change significantly for Relaxo or the price range will remain at ₹155, ₹160 per pair going ahead?

Yogesh, it's a journey, for increasing ASP is going to take time, but definitely, we are focused towards premiumization. We are changing our product mix, but it's going to take time to see the impact in ASP.

It's not a short-term, it's a long-term phenomenon. Every year, we are going to increase our ASP.

With EBO expansion and e-commerce growth which we are foreseeing, ASP will improve, definitely,

because

I think GT there will be a pressure, but on these two channels, a lot of premiumness is going to happen, and it will increase overall ASP at company level.

Correct.

Right. Sir, what do you feel about volumes for the next 2 years?

Next 2 years, I think we have to be cautious. Intent is there, again, around 4 around I think 4% to 5%, definitely, we want to grow our volume.

Price increase, we have already taken, let's see how it impact. Overall, we want to grow at least 4% to 5% in volume with product.

Sir, our EBO expansion is 25% right now, then, I don't think volume expansion can only be 4%, 5% because our network is only expanding 20%, 25%.

Agree, but EBO business is not that great now in our overall kitty. It's around 10% around 10%.

If we increase their 25%, it's a high-value item, volume will increase, definitely, but not that degree. Overall, at company level, when you're talking 4.5, it's a 17, 18 crore pair we sold last time.

That's going to be not that easy, but definitely, we intend to.

If I may ask one last question?

Please.

Sir, can you please give me the breakup of our network, like how many EBOs, how many MBOs touchpoints we have? What is the breakup for that?

We have mentioned in our investor report also that we are currently supplying to 70,000 outlets, that's MBO outlets, and our own outlet EBOs are 420 outlets. These are our own.

Plus, we are available in e-commerce platform. We started with now quick commerce also, being present in Blinkit and Zepto, where we are getting a good response, plus we are exporting to 35 countries.

Okay. Thank you, sir.

Thanks. That will be all.

Hi, sir. Thank you for the follow-up.

Sir, I have two bookkeeping questions. Can you help me with revenue contribution from Sparx, Bahamas, Relaxo, and Flite in FY '26?

We have three major brands. Our contribution in Sparx is around 40%, Hawaii is around 25%, and Bahamas is Flite?

It's a 35%, yes. This is the ratio among all the three major brands.

Right. Sir, how has been the Sparx journey in last 4, 5 years?

Any major category which you feel is really supporting the margin expansion more than the top line, can be looked at? Any of your thoughts on which has been really helping us at margin level?

There is a good demand coming from sneakers and sport shoe category, which we think has a great future ahead. Plus, we are going to focus more on ladies and kids category, which currently is contributing less, but has a good future.

Correct. Right,

yeah. Our focus is more on those.

Correct. Sir, in terms of ad expenses, what was the amount in FY '26, and how do we see for coming year?

Can you come again?

Ad expenses.

Advertisement.

Full year FY '26.

Our expenditure is roughly around 4% to 5%, and it varies between brand to brand, whatever the requirement is. Secondly, big expenditure is also on performance marketing on platforms like Amazon and Flipkart.

Correct.

That is depend upon again brand to brand.

We'll continue to see the same kind of ratio, 4% to 5% of net sales for '27?

Yes, correct. We will try to maintain what we are going to spend on advertisement.

Spend will be like this, but we are changing I think overall digital strategy and so many things.

That is there, that the focus will be now more on digital front. As you have seen, the customer is moving from television to digital.

The spend is also accordingly going to shift towards those medium where consumer is present.

Right, sir. Sure.

Thank you and all the best, sir. We look forward seeing good numbers like what we delivered in Q4 going forward.

Thank you.

Sir, just one follow-up. This 100 EBOs that you plan to do, our ₹180 to ₹200 crore capex guidance, does it include the capex for these EBOs?

No.

In our case, spend is not that great in case of That is inclusive, by and large inclusive. Each store we are going to spend around ₹30 to ₹35 lakh per store, not more than that.

If you go for 100, it will be 30, 35 Cr. That's all.

Not a big spend. That's part of 200.

Got it. Given there will be retailing costs in the first few years, there will be a margin-dilutive impact also.

Given that you have also guided for a 100 basis points expansion, this is despite the retail expansion, right?

Yes, definitely, because we have done trial also. There is a good footfall, good response, high-value product we are able to sell, and we have gone with exclusive article for EBO in addition to our GT.

Margins, we have already expanded our margin in these stores. We don't see much pressure will come on the overall margin, and we are expecting 1% which I referred will be maintained at company level.

Sure, sir. Thanks, and all the best.

Thank you, Sameer. This is all from our side, and we thank all of you, for joining the call.

Looking forward to speaking with all of you again in the next call. Thank you.