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amitdip
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Quote amitdip Replybullet Topic: Relaxo Footwear
    Posted: 08/Jan/2010 at 4:14pm
I'll be brief but would initiate the discussion:

A delhi based company, Relaxo Footwear,
http://www.relaxofootwear.com/ (website broken at the moment) now intending to expand in Gujarat and some southern states. I also later discovered the RJ had it in 2006-07, not sure how long or when has got tired of holding it.

Its products are sold in over few thousand shops but has about 90 EBOs.

Present locations:

http://www.relaxofootwear.com/searchretailshop.asp

Why I have some confidence in it coz I've used their products for many years as Ive lived in delhi for good 20 years, their "chappals" used to be cheaper than those of Bata and lasted longer.

Company has plans to "gradually" expand EBOs in next two years. Also there are "plans" to extend to other segments such as accessories and perhaps garments. Not a single shop was closed down in retail shakeup, they cater to lower income strata and middle segment.

Googling long enough will dish out all above facts.

Five year sales followed by net profits in Rs Crores

FY09    FY08    FY07    FY06    FY05

409.24     305.66     235.94     200.86     215.47

14.23     10.46     6.60     3.26     3.72


HI FY10
Sales followed by net profits in Rs Crores

261

19

My purchase price is between 190 and 200, started buying 5 days back.

Regards

Amit

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PKB2000
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Quote PKB2000 Replybullet Posted: 08/Jan/2010 at 4:32pm
Lots of people in market are looking at the feet / leather type business of the market
1 Fisrt call: Liberty shoe
2. HT2710: Mayur unicoaters
3. Amit DP: Relaxo
4. News channels / blogs: Crew boss
 
why don't we classify a sector like "Looking at shoe and belt of market"?


Edited by PKB2000 - 08/Jan/2010 at 4:38pm
I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso
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hit2710
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Quote hit2710 Replybullet Posted: 08/Jan/2010 at 11:18pm
Some more details.
 
Equity is 6 crore with 1.2 crore outstanding shares of rs 5 each.
 
Debt is around 106 crores. Market cap is around 226 crores.
 
Last five years debt has been increasing and stands at
47,41,60,71,106 crores beginning the year 05.
 
Dividend per share is 0.75 Rs per share since past 5 years.
 
RONW has been increasing consistently and for fy 09 was around 19. (could it be due to increasing debt?)
 
The stock has an incredible run from May from around 30 levels to a high of 220 in Nov 09 and currently around 190.
 
For H1 Fy 10 eps(not annualsed is 16)
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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amitdip
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Quote amitdip Replybullet Posted: 08/Jan/2010 at 1:29am
Negatives:
------------
- Debt increase (albiet for capacity expansion)
- No increase in dividend ( although for first time in several years interim divided of 10% has been declared in October on Face value 5Rs, besides regular 15%)
- Non tech savvy promoters/website does not work properly

Others attributes:
==================
Brand positioning is a "bargain brand", med/good quality with low price.

I doubt any delhiite over 25 years old cant recall this brand, they'd advertise very frequently on radio.

Another recollection is one of their franchised where I used to buy from, Darya Ganj in Delhi, was right next shop to Bata ( shared same wall) , it was cramped/ size of a bathroom ! - but I always bought from there

Its worth finding out how their existing shops look like.
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amitdip
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Quote amitdip Replybullet Posted: 08/Jan/2010 at 1:33am
ROCE is trending up, FY10 Capital Employed 180 Crores, expected PBDIT : 80 Crores, thus ROCE of 44%

Regards

Edited by amitdip - 08/Jan/2010 at 1:36am
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amitdip
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Quote amitdip Replybullet Posted: 08/Jan/2010 at 2:56am
From their website:

Relaxo produces huge volumes on a daily basis. In addition to meeting all domestic requirements, the company is all set to increase its presence in the global markets.

Over 100 million pairs per annum
The combined production capacity of the 9 manufacturing plants owned by Relaxo is over 100 million pairs per annum!

The highest volumes belong to the category of lightweight Hawaii slippers - over 300,000 pairs per day. These are followed by its three other categories of joggers, casuals and school shoes.

4 footwear categories:
Relaxo has ventured into home, casual, sports and school wear. Currently, it has 4 footwear categories, namely, Hawaii, Casual, Joggers, and Schoolmate.

It is one of the few companies that maintain consistent production activity in such a varied range of footwear.

Manufacturing experience:
The company caters to several international buyers of high repute. Premium shoe brands like Nike and Dunlop source their sports-friendly joggers from Relaxo.

New units are being set up to increase its production capacities.
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amitdip
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Quote amitdip Replybullet Posted: 08/Jan/2010 at 3:47am
TV Ads

http://www.youtube.com/watch?v=U4QT0Gsv_xY&NR=1

http://www.youtube.com/watch?v=MrQDIpZtoew
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EquityInv
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Quote EquityInv Replybullet Posted: 08/Jan/2010 at 6:22am
Management is hopeful for better FY10. They seems to close FY10 EPS with above Rs.28.

Edited by EquityInv - 08/Jan/2010 at 6:22am
One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers
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