Relaxo Footwear Q1 2026 Results: Profit Up 10% Despite 13% Drop in Sales

Relaxo Footwear, one of India’s most recognized names in the non-leather footwear industry, has reported its financial performance for the first quarter of 2026. While the top line shows a dip in sales, the company has managed to maintain profitability and even post gains in its bottom line. The financials reveal the resilience of the brand and its operational efficiencies despite a challenging consumer market.

Let’s break down the numbers and understand what’s driving Relaxo’s performance this quarter.

Sales Decline but Margins Hold Steady

Relaxo’s revenue from operations in Q1 2026 stood at ₹654 crore, reflecting a 13% drop compared to ₹748 crore in the same quarter last year. This fall in sales comes at a time when discretionary spending remains under pressure, especially in rural areas. Consumers are still cautious, and demand in the affordable footwear segment hasn’t fully recovered to pre-pandemic levels.

The sequential drop from ₹695 crore in the previous quarter (Q4 2025) further indicates seasonal softness in demand. While the summer season generally favors higher slipper and sandal sales, this quarter did not meet expectations, possibly due to competitive pricing pressures and macroeconomic uncertainty.

However, Relaxo’s ability to maintain its operating profitability despite this sales dip is a testament to its cost management strategy.

EBITDA Sees Marginal Growth

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) rose by 1% year-on-year, coming in at ₹99.4 crore versus ₹98.9 crore in Q1 2025. This mild uptick in EBITDA amid falling sales shows the company’s focus on maintaining margins through better procurement, improved operational efficiencies, and possibly optimizing marketing spends.

Although sequentially, EBITDA is lower than ₹112 crore in the previous quarter, the year-on-year comparison suggests that Relaxo has maintained discipline in managing core business costs. Raw material inflation has somewhat cooled, and the benefit is beginning to reflect in the operating numbers.

Net Profit Grows by 10%

Perhaps the most striking metric in the Q1 2026 results is the 10% year-on-year growth in net profit. The company reported ₹48.9 crore in net earnings, up from ₹44.4 crore in the same quarter last year. This growth also comes despite the decline in top-line sales, emphasizing the efficiency of the business model.

The improvement in profit could be attributed to both lower input costs and tight control on overheads. While the demand recovery remains slow, Relaxo has clearly prioritized profitability over aggressive expansion, a prudent strategy in the current environment.

EPS Growth Matches Profit

The earnings per share (EPS) for the quarter stood at ₹1.96, up 10% from ₹1.78 in Q1 2025. This consistency in EPS growth with net profit indicates that there has been no dilution in equity base, and the earnings growth is translating directly to shareholder value.

An EPS of ₹1.96, though modest, is significant in a subdued quarter and reflects the company’s commitment to delivering value to its shareholders.

Valuation and Market Sentiment

At the current stock price of ₹461, Relaxo Footwear commands a market capitalization of ₹11,472 crore. Its price-to-earnings (PE) ratio stands at 65.6, which might seem steep at first glance. However, it reflects the premium that investors are willing to pay for a consumer brand with consistent profitability, brand recall, and a wide retail footprint.

The high PE also suggests that the market expects future growth, possibly banking on improving rural demand, festival-season sales, and a long-term shift towards branded, affordable footwear. Relaxo’s historical performance and conservative debt profile continue to attract institutional investors despite short-term revenue softness.

Business Outlook: Can Growth Return?

Relaxo has shown it can protect margins and deliver profits even in a tough quarter. But the real test lies in reigniting revenue growth. Going forward, demand recovery in Tier-II and Tier-III cities will be critical. With inflation easing and interest rates stabilizing, disposable income levels may see improvement, helping boost sales volumes.

In addition, Relaxo’s expansion through multi-brand outlets, e-commerce partnerships, and regional market penetration should offer long-term growth. However, the company will have to navigate rising competition from domestic and international brands, especially in the low-to-mid price segment.

Relaxo may also benefit from a growing trend of consumers preferring comfortable and durable daily wear footwear. Its wide range of flip-flops, sandals, and casual shoes gives it an edge in addressing this demand.

Management Focus and Strategic Plans

While the company hasn’t released forward-looking guidance, its actions hint at a defensive yet stable strategy. Relaxo is reportedly focusing on rationalizing SKUs, controlling marketing costs, and enhancing inventory turnover. This approach, though conservative, ensures that the company remains cash-flow positive and prepared to scale operations when the demand environment improves.

The focus on digitization and tech-enabled supply chains may also offer productivity benefits in coming quarters. If Relaxo can maintain its operational efficiency while preparing for festive demand, it could surprise on the upside in the second half of 2026.

What Should Investors Watch?

Investors should keep an eye on two key things:

1. Sales recovery: Especially in Tier-II, Tier-III, and rural markets. This will determine how quickly Relaxo can regain revenue momentum.

2. Input cost trends: While input costs are down now, any reversal in raw material prices could squeeze margins again. The company’s ability to hedge or pass on costs will be crucial.

Additionally, festival season sales, upcoming monsoon demand for waterproof footwear, and new launches in the comfort segment could influence the next quarter’s results.

Conclusion

Relaxo Footwear’s Q1 2026 results reflect stability amid sluggish consumer demand. Despite a 13% fall in sales, the company managed to post a 10% rise in net profit, signaling strong cost discipline and operational efficiency. With a consistent EBITDA, improving EPS, and a steady market valuation, Relaxo remains a well-positioned player in India’s growing affordable footwear segment.

While growth will depend on broader economic recovery and rural demand revival, the company’s fundamentals remain strong. Investors may need to be patient, but Relaxo’s strategy indicates that it is built for sustainability more than flash-in-the-pan growth.

FAQs

Q1. What was Relaxo Footwear’s revenue in Q1 2026?
Relaxo reported ₹654 crore in revenue for Q1 2026, a 13% decline from ₹748 crore in Q1 2025.

Q2. How much profit did Relaxo make in Q1 2026?
The net profit stood at ₹48.9 crore, marking a 10% year-on-year increase.

Q3. What is the EPS of Relaxo for Q1 2026?
EPS for the quarter was ₹1.96, up from ₹1.78 in the same quarter last year.

Q4. What is Relaxo’s PE ratio currently?
The PE ratio is approximately 65.6, reflecting the market’s confidence in the company’s future growth.

Q5. Why did sales drop despite profit growth?
Sales dropped due to weak consumer demand, particularly in rural and price-sensitive segments. However, better cost management helped maintain profitability.

About TOD News Desk: TOD News Desk is a team of dedicated digital journalists who specialize in breaking down complex news across business, tech, and markets into simple, insightful stories. Our mission is to help readers stay ahead with timely, accurate, and helpful updates that matter.

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