Relaxo Footwears Faces Significant Volatility Amid Deteriorating Financial Performance

Relaxo Footwears has experienced significant volatility today, reaching a new 52-week low of Rs. 375.35. The stock opened with a notable gap down, reflecting a loss of 10.63% at the start of trading. Over the past two days, Relaxo has seen a cumulative decline of 7.61%, underperforming the consumer durables sector, which itself has fallen by 3.96%.
In terms of performance metrics, Relaxo Footwears has struggled over the past year, with a staggering decline of 52.70%, contrasting sharply with the Sensex's decline of just 2.18%. The company's financial health appears to be deteriorating, as evidenced by a negative operating profit growth rate of 5.57% over the last five years. Recent quarterly results have also been disappointing, with net sales hitting a low of Rs. 666.90 crore and a profit after tax of Rs. 33.01 crore, down 14.4%.

Technically, the stock is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a bearish trend. With a return on equity of 8.7 and a price-to-book ratio of 5.2, Relaxo Footwears is considered to have a high valuation relative to its peers.