Relaxo Footwears Ltd Falls to 52-Week Low of Rs.370.05 Amid Continued Downtrend

Stock Performance and Market Context

On the day the new low was recorded, Relaxo Footwears Ltd’s stock fell by 1.40%, underperforming the footwear sector by 1.39%. This decline extends a losing streak that has persisted for four consecutive trading sessions, during which the stock has shed 6.16% of its value. The current price of Rs.370.05 stands well below the stock’s 52-week high of Rs.598.55, highlighting a steep depreciation of 38.2% from its peak.

Technical indicators further underscore the bearish momentum, with the stock trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day. This broad-based weakness suggests sustained selling pressure and a lack of short-term support levels.

Meanwhile, the broader market environment has also been challenging. The Sensex opened flat but closed lower by 220.47 points, or 0.31%, at 82,986.91, marking a third consecutive weekly decline with a cumulative loss of 3.24%. Although the Sensex remains within 3.82% of its 52-week high of 86,159.02, it is trading below its 50-day moving average, signalling cautious sentiment among investors.

Financial Performance and Valuation Metrics

Relaxo Footwears Ltd’s financial results have contributed to the stock’s subdued performance. The company reported a 14.77% decline in profit before tax excluding other income (PBT LESS OI) for the quarter ended September 2025, amounting to Rs.36.59 crore. Net sales for the same period contracted by 7.48% to Rs.628.54 crore, indicating pressure on revenue generation.

Over the last five years, the company’s operating profit has declined at an annualised rate of 4.33%, reflecting challenges in sustaining growth. Profitability trends have also been under strain, with reported profits falling by 3.7% over the past year.

Return on equity (ROE) stands at 8.3%, which, when combined with a price-to-book value ratio of 4.5, suggests a valuation premium relative to the company’s earnings and asset base. This premium is notable given the stock’s recent performance and contrasts with the average historical valuations of its peers in the footwear sector.

Comparative Performance and Market Position

Relaxo Footwears Ltd has consistently underperformed the benchmark indices and its sector peers. Over the past year, the stock has delivered a negative return of 35.76%, in stark contrast to the Sensex’s positive return of 7.66% during the same period. This underperformance extends over the last three years, with the stock lagging behind the BSE500 index in each annual period.

The company’s market capitalisation grade is rated at 3, reflecting its mid-tier positioning within the footwear sector. The Mojo Score of 30.0 and a Mojo Grade of Sell, upgraded from a previous Strong Sell on 10 Nov 2025, indicate a cautious stance based on fundamental and technical factors.

Despite the challenges, the company maintains a low average debt-to-equity ratio of 0.01 times, signalling a conservative capital structure and limited leverage risk. Promoters remain the majority shareholders, providing stability in ownership.

Summary of Key Metrics

To summarise, Relaxo Footwears Ltd’s stock has reached a new 52-week low of Rs.370.05, reflecting a sustained period of price weakness. The stock’s decline is supported by subdued financial results, including a contraction in net sales and profit before tax, alongside a negative trend in operating profit growth over the medium term.

Valuation metrics indicate a premium pricing relative to earnings and book value, despite the stock’s underperformance against the broader market and sector indices. The company’s low leverage and promoter majority ownership provide some balance to the overall risk profile.

Market conditions, including a weakening Sensex and sector pressures, have compounded the stock’s challenges, with technical indicators signalling continued downward momentum.

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