Relaxo Footwears Investment Idea By IIFL

Relaxo Footwears Ltd (RFL) has tasted success by roping in celebrities (like Salman Khan, Akshay Kumar, Katrina Kaif etc.) to build its brand image and increase product visibility even as competition has stayed away from investing in celebrity endorsement. As a result, revenues have tripled in last five years in a fragmented footwear market. RFL has a strong differentiated portfolio of slippers and shoes catering to the middle income population. Most organized players are either absent or have limited product offerings in this segment of the value chain which has further boosted sales. Consequently, volumes and realizations have witnessed ~16%/23% cagr over FY09-14. We expect RFL to maintain the growth momentum and have built in ~23% revenue cagr over FY14-17.

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