Are Relaxo Footwears Ltd latest results good or bad?

The latest financial results for Relaxo Footwears Ltd indicate a challenging operational environment. For the quarter ended September 2025, the company reported a net sales figure of ₹628.54 crores, reflecting a year-on-year decline of 7.48%. This marks the third consecutive quarter of year-on-year revenue decline, raising concerns about the company's ability to maintain its market position amid sector-wide challenges.
The operating profit before depreciation, interest, tax, and other income (PBDIT) was recorded at ₹81.16 crores, which represents a significant decrease compared to previous periods. The operating margin has contracted to 12.91%, indicating pressure from elevated costs and operational inefficiencies. Furthermore, the net profit for the quarter was ₹36.16 crores, showing a slight year-on-year decline of 1.55%, but a more pronounced quarter-on-quarter decline of 26.05%. This decline in profitability metrics raises questions about the sustainability of earnings quality moving forward.

In terms of operational efficiency, the return on equity (ROE) has decreased to 8.33%, down from a five-year average of 11.65%, reflecting a decline in capital efficiency. The company's balance sheet remains robust, with zero long-term debt, but the declining cash position suggests challenges in working capital management.

Overall, the financial data presents a picture of deteriorating operational performance for Relaxo Footwears, with significant margin compression and revenue challenges. Additionally, the company experienced an adjustment in its evaluation, which reflects the current operational difficulties and market dynamics. Moving forward, the focus will be on the company's ability to stabilize revenue and improve margins in a competitive landscape.