Recent Price Movement and Market Context
On the day the new low was recorded, Relaxo Footwears Ltd’s share price fell by 3.32% intraday, closing with a day change of -3.36%. This decline contributed to a three-day consecutive fall, during which the stock lost 4.76% in value. The stock’s performance notably lagged behind the footwear sector, underperforming by 1.78% on the same day.
Relaxo’s current trading levels are below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum. This contrasts with the broader market, where the Sensex, despite a negative close of 0.39% at 83,246.18 points, remains only 3.5% shy of its 52-week high of 86,159.02. However, the Sensex itself has been on a three-week losing streak, down 2.93% over that period.
Long-Term Performance and Valuation Metrics
Over the past year, Relaxo Footwears Ltd has delivered a total return of -35.23%, a stark contrast to the Sensex’s positive 8.65% return. The stock’s 52-week high was Rs.598.55, highlighting the extent of the decline. This underperformance extends beyond the last year, with the company consistently lagging behind the BSE500 index for the past three annual periods.
Financially, the company’s operating profit has contracted at an annualised rate of -4.33% over the last five years. The most recent quarterly results for September 2025 showed a 14.77% fall in profit before tax excluding other income, down to Rs.36.59 crores. Net sales for the quarter also declined by 7.48% to Rs.628.54 crores. Cash and cash equivalents stood at a low Rs.25.22 crores for the half-year period, indicating limited liquidity buffers.
Return on equity (ROE) remains modest at 8.3%, while the stock’s valuation is elevated with a price-to-book value of 4.6 times. This premium valuation is higher than the average historical valuations of its peers in the footwear sector, suggesting that the market may be pricing in expectations not currently reflected in the company’s financial performance.
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Shareholding and Debt Profile
The company maintains a very low average debt-to-equity ratio of 0.01 times, indicating minimal leverage on its balance sheet. Promoters remain the majority shareholders, maintaining significant control over the company’s strategic direction.
Comparative Sector and Market Performance
Relaxo Footwears Ltd’s stock has consistently underperformed its footwear sector peers and the broader market indices. While the Sensex trades below its 50-day moving average, it remains above its 200-day moving average, reflecting a mixed but relatively more stable market environment compared to Relaxo’s persistent downtrend. The company’s Mojo Score stands at 30.0 with a Mojo Grade of Sell, downgraded from Strong Sell on 10 Nov 2025, reflecting a slight improvement in sentiment but still indicating caution.
Summary of Key Financial Indicators
Recent quarterly and half-yearly financials highlight several areas of concern:
- Profit before tax excluding other income declined by 14.77% to Rs.36.59 crores in the latest quarter.
- Net sales decreased by 7.48% to Rs.628.54 crores in the same period.
- Cash and cash equivalents are at a low Rs.25.22 crores for the half-year.
- Operating profit has contracted at an annual rate of -4.33% over five years.
- Return on equity remains modest at 8.3%.
- Price-to-book ratio is elevated at 4.6 times, above peer averages.
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Concluding Observations
Relaxo Footwears Ltd’s stock reaching a 52-week low of Rs.375.35 reflects a culmination of subdued financial results, valuation concerns, and persistent underperformance relative to the broader market and sector peers. Despite a low leverage position and promoter stability, the company’s declining sales and profits over recent quarters have weighed on investor sentiment. The stock’s premium valuation metrics, in the context of shrinking profitability and negative returns, highlight the challenges faced by the company in maintaining market confidence.
As of 19 Jan 2026, the stock remains in a downtrend, trading below all major moving averages and continuing to underperform the footwear sector and benchmark indices. This performance underscores the cautious stance reflected in its Mojo Grade of Sell, despite a slight upgrade from Strong Sell in November 2025.
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