RELAXO FOOTWEARS LTD.-$ Q2 FY26 Results

Q2 FY26 proved to be an encouraging quarter for the company, marked by positive momentum across all channels, particularly in Retail, E-commerce and Large Format Retail (LFR) Stores. The recent implementation of GST 2.0 norms, which reduced the GST on footwear priced below Rs. 2,500 to 5%, has significantly bolstered our position against rising competition from the unorganised sector, making our products more competitive in the mass and mid-market segments, which previously faced demand challenges. However, our General Trade sales continued to be slow, because of down stocking by our distributors and channel partners who are waiting for the old inventory to move out of the pipeline. We expect this slowness in the General Trade channel to be transitionary and should normalize in the coming quarters of the financial year. Additionally, the company successfully maintained its EBITDA margins during the quarter, driven by consistent efforts to enhance operational efficiencies, disciplined cost management and streamlined backend processes. For H1 FY26, EBITDA margins expanded by 101 bps, highlighting the effectiveness of the company’s cost management. Going forward, we see good traction coming in the next 2-3 quarters onwards, as we continue our sales transformation journey and expand our distribution network. Our focus on volume- driven growth and regaining market share positions us well for future stabilisation, especially as revised MRP (post GST rationalization) inventory becomes accessible to distributors and consumers. We remain dedicated to executing our path to achieving profitable, sustainable growth through innovation, efficiency, and building consumer trust.