Relaxo Footwears (RELAXO) | News Based Sentiment Analysis

• On September 4, 2025, Relaxo Footwears and other footwear companies saw their stock prices jump after the GST Council decided to reduce the Goods and Services Tax on shoes priced up to ₹2,500 from 12% to 5%, effective September 22, 2025. Relaxo’s share price specifically zoomed 8.6% to ₹489.10 on the BSE, signaling anticipated increased demand, especially in semi-urban and rural markets.
• Despite a 12.52% year-on-year decrease in revenue to ₹654.49 crore for Q1 FY26 (April-June 2025), Relaxo Footwears reported a 10.21% year-on-year increase in net profit to ₹48.90 crore as of September 9, 2025. This indicates improved efficiency despite lower sales, a trend investors will be watching closely.
• Following the financial results, analysts updated their price targets for Relaxo Footwears on September 9, 2025, with an average target of ₹466.67, representing a -5.63% downside from the last price of ₹494.50. However, Dailybulls projects a more optimistic September 2025 target of ₹547.82, and a bullish year-end target of ₹595.59.
• Earlier in the month, on August 28, 2025, Relaxo Footwears held its Annual General Meeting (AGM) where a final dividend of 300%, or INR 3.00 per equity share, was approved for the Financial Year 2024-2025. This approval, confirmed by voting results on August 29, 2025, represents a direct return of capital to shareholders.
• The company’s share price continued to react to market news, surging 7.04% to ₹478.85 on August 29, 2025, with significant trading volumes on both the BSE (1.44 lakh shares) and NSE (21.21 lakh shares) following the financial results announcement.
• Relaxo Footwears acknowledged challenges in Q1 FY26 due to muted consumer demand in the mass and mid-market segments and increased regional competition since the GST increase in 2022, as reported in August 2025. The company is focusing on sales transformation and distribution network expansion to address these issues.

The Investment Story: Relaxo Footwears navigated a challenging quarter with declining revenues but improved profitability, benefiting from positive market sentiment surrounding the GST rate cut. The company's strategic focus on sales transformation and distribution expansion remains key to future growth.

What It Means for Investors: Despite revenue headwinds, Relaxo's improved margins and the substantial dividend provide some reassurance. The mixed analyst outlook suggests caution, but the potential for demand boost from the GST cut and strategic initiatives offer long-term growth prospects.

Looking Ahead: Investors should monitor the impact of the GST rate cut on sales, track the progress of the company's sales transformation, and watch for further updates on consumer demand and competitive pressures.

The Bottom Line: Relaxo Footwears presents a mixed investment opportunity. While facing short-term revenue challenges, the company's profitability improvements, shareholder returns, and strategic initiatives offer potential for future growth, making it a stock to watch closely.