Relaxo Q1 FY27: standalone PAT up 12% YoY to ₹54.9 Cr, OPM edges up to 15.3% despite QoQ dip
PAT +12.35% YoY · revenue +7.73% · margins expanding
₹705.05 Cr
+7.73% YoY
₹54.94 Cr
+12.35% YoY
7.65%
+0.3pp YoY
₹2.21
Relaxo Footwears' standalone Q1 FY27 (quarter ended June 30, 2026) revenue from operations rose 7.7% YoY to ₹705.05 Cr from ₹654.49 Cr, while PAT grew a faster 12.4% YoY to ₹54.94 Cr from ₹48.90 Cr, lifting EPS to ₹2.21 from ₹1.96. Sequentially, both lines eased from Q4 FY26's seasonal peak — revenue down 6.1% and PAT down 18.8% QoQ from ₹67.67 Cr — consistent with Q4 (Jan-Mar) typically being the stronger quarter for the footwear category; this sequential softness should not be read as a demand issue.
Q1 FY-2027 vs prior quarters
Margins improved modestly YoY: EBITDA-level operating margin (PBT + finance cost + depreciation, less other income, over revenue) rose to 15.35% from 15.20% a year ago, and net profit margin (on total income) improved to 7.65% from 7.34%. The driver sits on the materials line: combined cost of materials, purchases and inventory movement fell to roughly 33% of revenue from about 38% a year ago, helped by the sizeable inventory build this quarter (a working-capital timing effect ahead of the festive/monsoon season) rather than a genuine gross-margin structural shift. That improvement was partly offset by employee benefits expense jumping 17% YoY and 29% QoQ to ₹123.56 Cr, likely reflecting continued EBO (exclusive brand outlet) staffing tied to the company's premiumization push. Versus the prior (Q4 FY26) quarter, both OPM (16.51%→15.35%) and NPM (8.87%→7.65%) compressed, in line with the normal seasonal pattern rather than a deterioration.
The stock went into the print at ₹419, up 10.9% over the past month of trading.
What the summary numbers don't show
No subsidiaries/JVs/associates — standalone is the only reported basis. No exceptional items in the P&L this quarter
Management expressed confidence in sustaining Q4 performance in the near term, with an intent to improve operating margins by over 1% compared to FY26's 13.8%. While acknowledging geopolitical uncertainties and potential inflationary pressures, they foresee revenue growth supported by continued price increases and volu
— This quarter: met
Management's FY26-Q4 concall guidance had targeted full-year FY27 OPM improvement of over 1 percentage point above FY26's 13.8%, alongside cautious 4-5% annual volume growth supplemented by price hikes, and capex of ₹180-200 Cr including EBO expansion and mould investment. Q1's 15.35% OPM and 7.7% revenue growth are directionally consistent with that plan, though a single quarter (historically one of the stronger ones alongside Q4) is not conclusive proof the full-year margin target will be met — FY26's weaker Q2/Q3 quarters aren't yet visible for FY27. No formal Street consensus estimates for this specific print could be located via search, so the beat/miss call versus analyst expectations remains unknown. The company did not issue a separate press release with this filing, so there is no fresh management commentary to reconcile against the numbers beyond the standard board-meeting outcome disclosure. Corporate activity this quarter was largely administrative (registrar reports, insider-trading window closure) plus incorporation of a green-energy SPV on June 16, which ties loosely to the company's ESG/capex intentions but had no P&L impact this quarter; the ₹3.50 dividend recommendation dates to the Q4 FY26 (May 29) board meeting, not this quarter's results.
W1
FY27 OPM guidance targets >14.8% (FY26 base 13.8%); Q1 print of 15.35% is a good start but Q2/Q3 (historically softer) will determine if the full-year target holds
W2
Volume growth guided at 4-5% annually alongside price hikes — confirm the volume/ASP split once management gives quarter-specific commentary
W3
Employee cost run-rate (₹123.56 Cr, +29% QoQ) — watch whether this moderates or is a structural step-up from EBO/premiumization investment
Standalone only — company has no subsidiary/associate/JV per note 3. Clean scan, unambiguous column headers, totalIncome and PAT tie exactly to reported figures. A large negative 'changes in inventories' (-₹99.25 Cr) vs +₹32.59 Cr in Q4 reflects seasonal inventory build, not a one-off P&L item.
Relaxo Q1: Growth momentum meets seasonal headwinds
With Q4's 8.1% revenue growth and 20.4% PAT surge behind it, the footwear leader enters Q1 on strong footing. Watch for margin hold amid input cost cycles and seasonal demand patterns.
The setup: Growth, but watch the levers
Relaxo closed FY26 in fine form—Q4 revenue up 8.1% YoY to ₹751 Cr, with PAT climbing 20.4% to ₹68 Cr. That profit surge hints at operational leverage kicking in; full-year FY26 saw ₹2,702 Cr revenue and ₹179 Cr PAT. Entering Q1 FY-27, the stock trades at ₹425.8, well above 20/50/200-day SMAs and near ATH, signaling market confidence. The question for August 13: does the company sustain that profit momentum, or does Q1 seasonality and input costs clip margins? Promoter ownership remains steady at 71.3%, and the board just backed a ₹3.50 dividend (350% payout)—capital discipline looks intact.
~₹630–₹660 Cr
On-plan 8–10% YoY growth; Q1 typically softer seasonally vs Q4
₹50–₹58 Cr
7–10% YoY growth; margin hold on operational leverage vs input cost headwinds
Track vs Q4
Raw material & freight cycles; any guidance update on pricing power critical
A strong print: Revenue tracks the ~9% YoY run-rate with no major shortfall; PAT margin holds 8.5–9% (in line with full-year FY26 ratio of ~6.6% net profit, adjusted for quarterly volatility); management gives upbeat FY-27 guidance or flags demand tailwinds. A weak print: Revenue misses the 8% floor (driven by retail/wholesale weakness); margin compresses below 7% (input costs or pricing pressure); any caution on H2 demand or competitive intensity.
On track with guidance?
No explicit full-year FY-27 guidance was announced with the Q4 results, but the board's dividend and recent capex moves (₹2.5 Cr solar investment via a CleanMax SPV, June 2026) suggest management is confident. The 20.4% PAT jump in Q4 masks volatility—Q4 often benefits from year-end demand and one-time items. Q1's test is whether 8–10% revenue growth is repeatable, and whether the operational leverage that lifted PAT in Q4 persists or normalizes. Watch for any update on FY-27 assumptions (margin assumptions, volume targets, capex) on the call.
What the Street sees
Since last quarter: filings & signals
1 · Green energy capex
Board approved investment of ₹2.5 Cr in a CleanMax solar SPV (June 2026). Signals capex discipline and ESG focus; typical for a consumer brand managing utility costs.
2 · Dividend payout
₹3.50 per share (350% on ₹1 face value) recommended for FY26. Strong cash generation; no red flags on liquidity or dividends being cut.
3 · Management reshuffle
VP Supply Chain appointed (May 2026), plus other SMP changes in late May. Routine succession planning; no material disruption signals.
4 · Insider trading window
Trading window closed (June 29, 2026) ahead of Q1 result. Standard pre-result blackout; no large insider trades flagged.
5 · Ownership stable
FII 3.04%, DII 9.74%, promoter 71.27% (as of Q4 FY26). No material pledges or bulk deals in recent months beyond routine MICROCURVES flows (neutral technical activity). Promoter backing intact.
On result day—what to watch
1. Revenue & volume: Does Q1 sustain the 8–10% YoY momentum seen in Q4? Watch for any wholesale/retail channel weakness or e-commerce headwinds. 2. Margin hold: PAT as % of revenue—the 20.4% jump in Q4 was impressive; reiteration of 8–9% PAT margins (or guidance on H2 FY-27 rates) will be critical. 3. FY-27 outlook: Any color on full-year guidance, capex plans (post solar investment), and input cost assumptions will reset Street sentiment. 4. Demand signals: Management commentary on urban vs rural penetration, festive season outlook, and competitive pricing will help gauge durability of the growth arc. The stock's technical setup is strong; execution credibility now rides on margin durability and volume. Result on August 13 after market close.
Relaxo enters Q1 FY-27 on a positive note—strong Q4 numbers, steady ownership, and capital discipline (dividend, solar SPV). The near-term risk is seasonal slowdown and margin pressure from input costs; the upside is operational leverage if volume holds and pricing power persists. The Street is cautiously optimistic but will scrutinize the margin story closely. For a stock trading near ATH on strong conviction, execution matters: the August 13 result will test whether Q4's profit surge is the new baseline or a peak.