STEPPING UP

India’s largest footwear maker RELAXO has bounced back impressively in terms revenue and profits after the pandemic-induced slowdown. What is fuelling this resurgence?

- Ashish Sinha

IN THE LAST fiscal year, India produced over 22 crore pairs of footwear, of which 19.5 crore were manufactured and sold by Relaxo Footwears, the leading brand in the country by market capitalisation. Post-pandemic, the footwear industry has witnessed a resurgence, though contrary to popular belief, it is not the shoes or closed footwear categories driving the growth, but rather the open footwear segment—slippers and sandals.

Despite this growth, the past two to three years have not been without challenges. Regulatory hurdles emerged when the Indian government mandated strict adherence to Bureau of Indian Standards (BIS) codes across the entire supply chain. This had a notable impact on industry-wide sales.

India ranks second only to China in global footwear production. The domestic footwear industry is bifurcated into leather and non-leather categories, both driven by rising demand. According to Invest India, the non-leather footwear market in India is poised to expand eightfold by 2030, with projections suggesting it will surpass $6 billion this year.

Founded in 1984, Relaxo has established itself as India’s largest footwear manufacturer. Reflecting on its recent performance, Gaurav Dua, Whole-time Director at Relaxo, notes, “Our profit margins were largely boosted by subdued raw material prices, partially offset by increased fixed expenses.” The company registered a modest revenue growth in FY24, largely driven by a surge in open footwear sales, which helped reclaim market share. Relaxo also invested Rs 248 crore in capital expenditures, including a significant land purchase in Bhiwadi, Rajasthan.

Relaxo’s financials highlight its robust recovery. The company’s net profit surged 30 per cent year-on-year to Rs 200 crore for FY24, while revenue from operations grew 5 per cent to Rs 2,914 crore. EBITDA witnessed a 21per cent increase, reaching Rs 407 crore, and EBITDA margins improved by 188 basis points, standing at 14 per cent.