Relaxo Footwears slumped 5.34 per cent to Rs 924.70 after the company reported a 67.4 per cent drop in net profit to Rs 22 crore in the second quarter of FY23 from Rs 69 crore in the second quarter of FY22.

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During the second quarter of FY23, the net profit margin was 3.3 per cent compared with  9.6 per cent in the second quarter of FY22.

Revenue from operations declined by 6.3 per cent YoY to Rs 670 crore in Q2FY23. EBITDA went down by 49.1 per cent to Rs 59 crore in the second quarter of FY23 from Rs 117 crore in the second quarter of FY22. EBITDA margin was 8.9 per cent in the second quarter of FY23 compared to 16.4 per cent in the second quarter of FY22. 

Ramesh Kumar Dua, Managing Director, said, “The company’s performance in the quarter is subdued due to a decline in the volume of categories serving the masses. The consumers were facing inflationary pressures, which affected their affordability, and they had started moving to cheaper alternatives even at the cost of quality. Hence, the company took an aggressive price correction in September 2022 to be competitive in the market.”

A decrease in volumes of the categories serves the mass segment who were under inflationary pressures with decreasing affordability.