3QFY2014 Result Update | Footwear

February 3, 2013

Relaxo Footwears
Promising future
Y/E March (` cr) Total Income EBITDA EBITDA margin (%) Reported PAT 3QFY2014 3QFY2013 % chg (yoy) 2QFY2014 % chg (qoq) 259 223 16.2 263 (1.6) 28 19 48.8 26 7.3 10.8 8.4 236bp 9.9 89bp 11 6 74.5 12 (9.1)

ACCUMULATE
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta Net debt (` cr) 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

`231 `262
12 Months

Source: Company, Angel Research

Relaxo Footwears (Relaxo) reported a strong set of numbers for 3QFY2014, broadly in line with our estimates on the top-line and bottom-line front. The top-line clocked a 16.2% yoy growth to `259cr, against our estimate of `248cr. The gross margin for the quarter was flat on a yoy basis at 55.0%. However, with optimization of costs, the overall expense for the company is consolidating, leading to margin expansion. For the quarter, the operating margin expanded by 236bp yoy and came in at 10.8%. As a result, the net profit for the quarter came in at `11cr, 74.5% higher yoy and in line with our estimate. Profit to grow at a higher rate over FY2013-16E On account of improving brand visibility resulting in strong demand, we expect Relaxo to post a revenue CAGR of 14.3% over FY2013-16E to `1,502cr. The company is now in a consolidation phase with 1) optimized employee costs, 2) less requirement of investment in advertising as post the endorsement by the three Bollywood stars - Salman Khan (Hawaii), Katrina Kaif (Flite) and Akshay Kumar (Sparx), the company has successfully improved its brand visibility, 3) expected breakeven of most Relaxo Shopee by FY2015, and 4) improving product mix. The aforementioned factors will aid in expanding the operating margin of the company by 209bp to 12.5% in FY2016E. Additionally, with decent cash flow coming in, we expect debt repayment to start leading to lower interest cost and also with sufficient capacity expansion already in place; depreciation cost is expected to be flat. Resultantly, we expect the companys profit growth to be almost the double of revenue growth and come in at `98cr in FY2016, ie a CAGR of 29.9% over FY2013-16E. Outlook and valuation: At the current market price, the stock is trading at 14.1x FY2016E earnings. With the consolidating business and increasing brand value, we are valuing the company at a higher multiple of 16.0x FY2016E earnings and recommend an Accumulate rating on the stock with a revised target price of `262.

Footwear 1,385 0.3 107 255 / 100 2,983 5 20,514 6,090 RLXO.BO RLXF IN

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 75.0 16.5 1.4 7.2

Abs.(%) Sensex Relaxo

3m (2.5) 35.2

1yr 2.5

3yr 11.8

43.1 242.8

Key financials
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) Adj. EPS (Post stock split) (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
FY2012 FY2013 FY2014E FY2015E FY2016E

860 25.4 40 48.7 10.5 6.7 34.7 8.0 26.0 19.5 1.8 17.0

1,005 16.8 45 12.2 10.4 7.5 30.9 6.5 23.2 17.6 1.6 15.1

1,125 11.9 57 27.8 11.3 9.5 24.2 5.4 24.3 19.6 1.4 12.5

1,300 15.6 77 34.3 12.0 12.8 18.0 4.3 26.6 23.5 1.2 9.9

1,502 15.6 98 27.6 12.5 16.4 14.1 3.4 27.1 26.1 1.0 7.9

Tejashwini Kumari
30940000 ext: 6856 tejashwini.kumari@angelbroking.com

Source: Company, Angel Research, CMP as on January 31, 2013

Please refer to important disclosures at the end of this report

3QFY2014 Result Update | Relaxo Footwears

Exhibit 1: 3QFY2014 performance

Y/E March (` cr) Net Sales Net raw material (% of Sales) Staff Costs (% of Sales) Other Expenses (% of Sales) Total Expenditure EBITDA EBITDA (%) Interest Depreciation Other Income PBT (% of Sales) Tax (% of PBT) Reported PAT PATM (%)
Source: Company, Angel Research

3QFY2014 259 117 45.0 27 10.3 88 34.0 231 28 10.8 6 8 2 15 6.0 5 31.3 11 4.1

3QFY2013 223 101 45.4 27 12.2 76 34.1 204 19 8.4 5 6 1 9 4.0 3 31.8 6 2.7

% chg (yoy) 16.2 15.3 (1.8) 15.9 13.2 48.8 236bp 28.3 27.2 35.3 73.2 70.6 74.5

2QFY2014 263 114 43.3 27 10.4 96 36.4 237 26 9.9 6 7 4 17 6.5 6 32.2 12 4.4

% chg (qoq) (1.6) 2.3 (2.9) (8.2) (2.5) 7.3 89bp 2.4 9.7 (64.0) (10.3) (12.7) (9.1)

9MFY2014 835 369 44.2 84 10.1 285 34.1 738 97 11.6 17 23 8 65 7.8 21 32.2 44 5.3

9MFY2013 714 336 47.0 85 11.9 220 30.8 641 73 10.2 12 19 4 46 6.4 15 31.7 31 4.4

% chg 17.0 9.9 (1.1) 29.5 15.2 33.1 141bp 36.8 22.3 77.8 40.7 43.1 39.5

Performance broadly in line with estimates

The revenue for the quarter grew by 16.2% on a yoy basis but was flat on a sequential basis at `259cr. It was broadly in line with our estimate of `248cr.

Exhibit 2: Actual vs. Estimate

Y/E March (` cr) Net sales EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

3QFY14 259 28 10.8 11

Angel est. 248 24 9.6 11

% diff 4.5 17.5 119bp (0.8)

Consolidation of expenses helped in margin expansion

The gross margin was flat on a yoy basis at 55.0%; the company was able to pass on the increase in raw material costs by revising its product prices while portfolio management was also impressive. The operating margin expanded by 236bp to 10.8%, mainly on account of lower employee costs and other expenses. It came 119bp higher than our expectation, mainly because of lower-than-expected employee costs. To the positive, the pressure on inventory, which had risen in the last quarter, has started to ease out because of strong growth in the shoe segment.

February 3, 2014

3QFY2014 Result Update | Relaxo Footwears

Exhibit 3: EBITDA grew by 48.8% yoy

50 45 40 35 13.7 8.6 12.1 9.9 8.4 11.0 9.9 EBITDA (LHS) EBITDA margin (RHS) 13.8 10.8 16 14 12 10

Exhibit 4: Consolidation in costs led to margin expansion

60.0 50.0 40.0 53.7 RM/ sales 48.3 51.6 27.8 22.6 13.7 8.6 10.0 0.0 12.1 9.9 8.4 11.0 13.8 Other expense/ sales 47.3 30.9 45.4 34.1 45.9 33.4 44.3 32.3 36.4 9.9 34.0 10.8 EBITDA margin 43.3 45.0

( ` cr)

(%)

30 25 20 15 10

6 4

(%)

30.0 20.0

25.2

24.0

18.8

32.2

43.0

26.0

27.9

18

33

30

5 0

2 0

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY14

1QFY14

2QFY14

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY14

1QFY14

2QFY14

Source: Company, Angel Research

3QFY14

Source: Company, Angel Research

The tax expense for the quarter stood at `5cr (31.3% of PBT). The net profit came in at `11cr, 74.5% higher yoy and in line with our estimate.

Investment rationale
Celebrity endorsement and retail expansion to strengthen brand visibility
The company had a total count of 168 retail outlets as at the end of the year FY2013. Post the endorsement by the three Bollywood stars - Salman Khan (Hawaii), Katrina Kaif (Flite) and Akshay Kumar (Sparx), the demand for the companys product offerings has risen. Our channel check in various cities in North India suggests that demand for Sparx and Flite is increasing due to regular launches of new varieties in the affordable price range. The demand for Hawaii brand remains intact. Breakeven of Relaxo Shoppe to add to the profitability We believe that retail expansion along with rigorous advertisement will help the company in successfully expanding its reach and visibility as well as in strengthening its brand image. Additionally, the company is aggressively working towards closing/dislocating the non-performing Relaxo Shoppe, which will reduce pressure on inventory and operating margin. Also, the retail division rationalization has started giving positive results on the margin front and we expect most of them to break-even by the next financial year ie FY2015E, adding directly to the profitability of the company. We also believe that the company will be able to maintain its market share in the mass segment through the Hawaii brand and penetrate further in the lower and upper-middle class segments through existing products and upcoming launches of Flite and Sparx brands.

Capacity expansion in place to cater to increasing demand

With the PU (Polyurethane) footwear plant at Bahadurgarh getting operational, the total capacity of the company now stands at 4,54,000 pairs per day, operating at 70% capacity utilization. We expect that with the current capacity the company will be able to cater to growing demand.

February 3, 2014

3QFY14

3QFY2014 Result Update | Relaxo Footwears

According to industry reports, the current Indian footwear market is ~`26,300cr and is expected to grow at a CAGR of 15% over FY2011-15E to `38,700cr by FY2015E. Additionally, the organized market, in which the company operates, is expected to grow at a CAGR of 19% for the same period to reach `17,500cr by FY2015E (from `10,000cr in FY2011).

Exhibit 5: Organised vs. Unorganised footwear market

Exhibit 6: Market segmentation

Kids, 10%

Unorganised, 60%

Organised, 40%

Women, 30%

Men, 60%

Source: Company, Angel Research

Source: Company, Angel Research

Changing revenue mix to drive profit

The product mix over the years has changed, resulting in better top-line growth along with margin expansion. Flite, Hawaii and Sparx contribute one-third each to the revenue while the mix is expected to change to ~40%, 25% and 35%, respectively in FY2015; this will help in driving profitability for the company. Currently, Flite is growing at a rate of 15%, Hawaii too at 15% and Sparx is growing at 25%. To meet the growing demand and growing fashion-consciousness of consumers, the company keeps on launching new designs across all brands at regular intervals. Hawaii, being a mass brand, adds to the volume, while Sparx and Flite help in improving the companys profitability. The colorful slippers, Hi-Fashion, under Hawaii brand with premium pricing also successfully gained attention and demand in the market.

February 3, 2014

3QFY2014 Result Update | Relaxo Footwears

Financial performance
Assumptions
Exhibit 7: Key assumptions
Assumptions Volume Growth Realisation Growth Change in raw material prices (%) Ethyl Vinyl Acetate (EVA) Rubber
Source: Company, Angel Research

FY2014E 6.6 5.0 (10.0) (10.0)

FY2015E 8.1 7.0 5.0 5.0

FY2016E 9.3 7.0 7.0 7.0

Exhibit 8: Actual vs Estimate

Y/E March Net sales (` cr) OPM (%) Adj. PAT Earlier estimates FY2014E 1,125 11.1 57.1 FY2015E 1,373 12.6 90.1 Revised estimates FY2014E 1,125 11.3 57.3 FY2015E 1,300 12.5 81.3 % chg FY2014E 0.0 20bp 0.3 FY2015E (5.3) (13)bp (9.8)

Source: Company, Angel Research

While we maintain our estimates for FY2014E, we tweak them for FY2015E to factor in the demand environment and market conditions. As we roll over to FY2016E, we expect the revenue to grow at a CAGR of 14.3% over FY2013-16E to `1,502cr for FY2016E, mainly on the back of the prevailing growth triggers, which include 1)sufficient capacity to cater to increasing demand, 2) improving sales mix and 3) improving brand visibility and brand recall.

Exhibit 9: Healthy revenue growth going forward

1,600 1,400 1,200 1,000
( ` cr)

Exhibit 10: Margin to improve with decreasing other expenses

40

35.9 25.4 16.8 11.9

1,005 1,125 1,300 1,518 554 686 860

30.0 25.0 18.5 20.2

25.2 17.9 13.8

27.0

26.0

25.1

23.9

30 15.6 16.8 20 10 0

20.0

(%)

800 600 400 200 0

FY2010 FY2011 FY2012

15.0 10.0 5.0 0.0

9.6 10.9

10.5

10.4 11.3

11.3

12.0

12.5

FY2010

FY2011

FY2012

FY2013E

FY2014E

FY2015E

FY2013E

FY2014E

FY2015E

Revenue (LHS)

Revenue growth (RHS)

FY2016E

EBITDAM

Emloyee cost/net sales

Other expense/sales (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

We expect the margin to improve by 209bp in FY2016E to 12.5% with improving product mix and portfolio management, cost optimization, breakeven of most of the Relaxo Shoppe and better capacity utilization. We remain cautious about raw material prices in future, given the prevailing inflationary conditions; we have hence factored in a 5% and 7% increase in the same for FY2015E and FY2016E respectively. Further, we expect the consolidation of expenses to take place, majorly in employee cost and other expenses (mainly advertisement spend). We

February 3, 2014

FY2016E

(%)

10.0

9.6

10.3

10.3

10.3

3QFY2014 Result Update | Relaxo Footwears

also expect the debt to be repaid by 15% each in FY2015E and FY2016E with the cash flow coming in, thereby adding to profitability. On account of improved margins, and debt repayment we expect the net profit to grow at a CAGR of 29.9% over FY2013-16E to `98cr in FY2016E.

Outlook and valuation

With the growth triggers in place, ie 1) sufficient capacity to cater the increasing demand, 2) improving sales mix, 3) improving brand visibility and brand recall 4) continuous product development 5) expected breakeven of most of Relaxo Shoppe by FY2015E 6) optimizing cost expenses and 7) less requirement of investment in advertising as post the endorsement by the three Bollywood stars Salman Khan (Hawaii), Katrina Kaif (Flite) and Akshay Kumar (Sparx), the company has successfully improved its brand visibility we remain positive on the companys future. We expect Relaxo to post a revenue CAGR of 14.3% over FY2013-16E to `1,502cr with an operating margin of 12.5% in FY2016E. The PAT is expected to grow at a CAGR of 29.9% to `98cr for the same period. At the current market price, the stock is trading at 14.1x FY2016E earnings. With the consolidating business and increasing brand value, we are valuing the company at a higher multiple of 16.0x FY2016E earnings and recommend an Accumulate rating on the stock with a revised target price of `262.

Exhibit 11: One-year forward PE

300.0 250.0 200.0

(` )

150.0 100.0 50.0 0.0

Jul-10

Jul-11

Jul-12

Jan-10

Jan-11

Jan-12

Jan-13

Jul-13

Price (`)

5x

10x

15x

20x

Source: Company, Angel Research

February 3, 2014

Jan-14

3QFY2014 Result Update | Relaxo Footwears

Exhibit 12: Comparative analysis

Company Relaxo footwears Year end FY2014E FY2015E FY2016E Bata India* FY2014E FY2015E
Source: Company, Angel Research, *Bloomberg

Mcap (` cr) 1,385 1,385 1,385 5,925 5,925

Sales (` cr) 1,125 1,300 1,502 2,477 2,886

OPM (%) 11.3 12.0 12.5 15.8 16.1

PAT (` cr) 57 77 98 247 301

EPS (`) 9.5 12.8 16.4 38.1 46.7

RoE (%) 24.3 26.6 27.1 25.7 25.9

P/E (x) 24.2 18.0 14.1 25.0 20.6

P/BV (x) 5.4 4.3 3.4 6.0 5.0

EV/EBITDA (x) 12.5 9.9 7.9 15.2 12.7

EV/Sales (x) 1.4 1.2 1.0 2.4 2.1

With the same level of ROE, when compared with Bata, the market leader in the footwear market, Relaxo trading at a reasonable valuation on EV/Sales providing a better investment opportunity.

February 3, 2014

3QFY2014 Result Update | Relaxo Footwears

Risks
Rise in raw material prices and depreciating rupee
A rise in the price of key raw materials EVA and rubber can adversely impact the profitability of the company. Rubber prices have fallen in last quarter, which was in favor of the company; however, if they again start to head northwards, then the companys profitability could get hampered. Also, Relaxo imports its entire EVA requirement for which the average price in last quarter was ~`140/kg. Any depreciation in the rupee could pose a serious risk to the operating margin and thereby impact profitability of the company.

Exhibit 13: Rubber price trend

270 250 258

Exhibit 14: Rupee depreciation A concern for EVA

70.0 65.0 60.0 55.0 50.0 45.0 40.0 53.2 65.7 62.7

( ` /Kg)

210 190

219

170 170 150

(USD/INR)

230

Feb-13

May-13

Sep-13

Jul-13

Dec-13

Jan-12

Jan-13

Jan-14

Apr-11

Apr-12

Apr-13

Jan-13

Jun-13

Mar-13

Aug-13

Apr-13

Oct-11

Oct-12

Oct-13

Source: Company, Angel Research

Source: Company, Angel Research

Competition from both - branded and unorganized sector

Relaxo competes with both, branded as well as the unorganized market. Hawaii, the mass market product faces stiff competition from the unorganised market. On the other hand, Sparx faces competition from branded shoes. Though the company has competitively priced its products, however, any price cut by competitors can put pressure on Relaxos sales and margin.

The company
Relaxo is a key player in the retail footwear industry, with a strong foothold in the slippers market targeting the footwear needs of ~1.2bn people of India. It has 8 manufacturing units, a portfolio of ~10 brands and ~50,000 retailers and distributors. The company presently has 168 company-owned outlets across India, with a concentrated presence in Delhi, Rajasthan, Gujarat, Haryana, Punjab, Uttar Pradesh and Uttarakhand. It has nine manufacturing plants, seven in Bahadurgarh (Haryana) and one each in Bhiwadi (Rajasthan) and Haridwar (Uttaranchal). Currently, the company sells its products under three major brands Hawaii, Flite and Sparx.

February 3, 2014

Nov-13

Oct-13

Jan-14

Jul-11

Jul-12

Jul-13

3QFY2014 Result Update | Relaxo Footwears

Profit & Loss Statement (Standalone)

Y/E March (` cr) Total operating income % chg Net Raw Materials % chg Other Mfg costs % chg Personnel % chg Other % chg Total Expenditure EBITDA % chg (% of Net Sales) Depreciation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of sales) Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Adjusted EPS (`) (Post stock split) % chg Dividend Retained Earning FY2012 860 25.4 459 22.3 55 26.8 82 10.6 174 37.5 770 90 35.9 10.5 23 67 47.8 7.8 19 5 0.6 48 63.0 0.0 54 14 25.4 40 40 48.7 4.6 33.3 6.7 48.7 2 38 FY2013 FY2014E 1,005 16.8 469 2.2 64 17.5 113 37.6 253 45.3 900 105 16.7 10.4 25 79 18.8 7.9 18 6 0.6 62 28.1 0.0 68 23 33.8 45 45 12.2 4.5 37.3 7.5 12.2 2 42 1,125 11.9 506 7.9 72 11.9 116 2.2 304 20.1 998 127 20.7 11.3 29 97 22.6 8.7 23 11 1.0 75 21.2 0.0 86 29 33.5 57 57 27.8 5.1 9.5 9.5 27.8 12 45 FY2015E 1,300 15.6 590 16.4 82 14.5 134 15.6 338 11.3 1144 156 22.9 12.0 32 124 27.3 9.5 18 9 0.7 106 41.2 0.0 115 38 33.0 77 77 34.3 5.9 12.8 12.8 34.3 12 65 FY2016E 1,502 15.6 687 16.5 95 15.6 155 15.6 377 11.6 1314 188 20.8 12.5 35 153 23.4 10.2 16 9 0.6 137 30.1 0.0 146 48 33.0 98 98 27.6 6.5 16.4 16.4 27.6 12 86

February 3, 2014

3QFY2014 Result Update | Relaxo Footwears

Balance Sheet (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves& Surplus Shareholders Funds Total Loans Other Long Term Liabilities Long Term Provisions Deferred Tax (Net) Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Lease adjustment Goodwill Investments Long Term Loans and adv. Other Non-current asset Current Assets Cash Loans & Advances Inventory Debtors Other current assets Current liabilities Net Current Assets Misc. Exp. not written off Total Assets 379 108 272 21 0 0 0 12 1 169 1 15 128 23 2 131 38 0 344 464 133 330 20 0 0 0 15 1 240 3 39 159 36 3 154 87 0 453 515 162 352 20 0 0 0 15 1 280 3 44 196 34 3 172 108 0 496 545 194 351 5 0 0 0 15 1 354 17 65 225 43 4 197 156 0 528 589 229 360 5 0 0 0 15 1 433 41 75 260 49 8 227 206 0 586 6 166 172 146 0 3 22 344 6 208 214 205 6 3 24 453 6 252 258 205 6 3 24 496 6 315 321 174 6 3 24 528 6 399 405 148 6 3 24 586 FY2012 FY2013 FY2014E FY2015E FY2016E

February 3, 2014

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3QFY2014 Result Update | Relaxo Footwears

Cash Flow (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Direct taxes paid Others Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments (Inc.)/Dec. in LT loans & adv. Others Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances
FY2012 FY2013 FY2014E FY2015E FY2016E

54 23 (4) (14) 14 73 (46) 0 1 (2) (47) 0 (11) (2) (14) (27) (1) 2 1

68 25 (46) (23) (6) 18 (83) 0 3 6 (75) 0 59 (3) 2 59 2 1 3

86 29 (21) (29) (11) 54 (51) 0 0 11 (40) 0 0 (12) (2) (14) 0 3 3

115 32 (34) (38) (9) 65 (16) 0 0 9 (7) 0 (31) (12) (2) (45) 14 3 17

146 35 (26) (48) (9) 99 (44) 0 0 9 (35) 0 (26) (12) (2) (40) 24 17 41

February 3, 2014

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3QFY2014 Result Update | Relaxo Footwears

Standalone Key Ratios

Y/E March Valuation Ratio (x) P/E (on FDEPS) Adjusted EPS (Rs) (Post stock split) P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) WC (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.8 1.6 3.6 0.9 1.9 4.5 0.8 1.6 4.3 0.5 1.0 6.8 0.3 0.6 9.8 2.4 52 10 60 14 2.4 52 11 58 21 2.3 58 11 63 30 2.5 59 12 63 33 2.6 59 12 63 36 19.5 20.8 26.0 17.6 18.5 23.2 19.6 20.6 24.3 23.5 24.5 26.6 26.1 28.3 27.1 7.8 0.7 2.7 15.5 9.6 1.0 21.4 7.9 0.7 2.3 12.3 5.7 0.9 18.1 8.7 0.7 2.4 13.7 7.3 0.9 19.2 9.5 0.7 2.6 16.4 7.0 0.6 22.4 10.2 0.7 2.8 19.0 7.0 0.4 23.5 33.3 6.7 52.5 1.5 143.7 37.3 7.5 58.6 2.0 178.7 9.5 9.5 14.4 2.0 43.0 12.8 12.8 18.1 2.0 53.4 16.4 16.4 22.2 2.0 67.5 34.7 22.0 8.0 0.1 1.8 17.0 4.5 30.9 19.7 6.5 0.2 1.6 15.1 3.5 24.2 16.0 5.4 0.9 1.4 12.5 3.2 18.0 12.7 4.3 0.9 1.2 9.9 2.9 14.1 10.4 3.4 0.9 1.0 7.9 2.5
FY2012 FY2013 FY2014E FY2015E FY2016E

February 3, 2014

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3QFY2014 Result Update | Relaxo Footwears

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Pvt. Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Relaxo Footwears No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 3, 2014

13