Hope to sustain 20-22% growth rate: Relaxo Footwear

In an interview to CNBC-TV18, Ramesh Dua, managing director of  Relaxo Footwear  shares his views on the company’s Q4 earnings. Below is the verbatim transcript of Ramesh Kumar Dua’s interview with CNBC-TV18's Anuj Singhal and Ekta Batra.

Anuj: Good quarter for you, revenues going up 18 percent and net profit nearly doubling but now the base effect will catch up, what kind of growth numbers do you think you will be able to deliver?
A: We are poised for a good growth for this quarter also. The momentum that we have picked up in the last year we have been regularly improving and this quarter we are poised for a good growth.

Ekta: Can you explain to us that for this quarter what resulted in your EBITDA growing 55 percent with your EBITDA margins expanding to 16 percent versus 13 percent on a year-on-year (YoY) basis. What led to that margin expansion and do you think it is sustainable?
A: There are two things. One is premiumisation of the products, another thing, the raw material prices have been a little comfortable.

Anuj: In terms of volume growth and sales growth what kind of targets do you have?
A: We will continue the momentum of last quarter, last year also and we have grown in the last year around 22 percent and we will be able to sustain this growth and our growth is also going to be profitable the way it has been in this quarter.

Ekta: Just to understand the business better can you just tell us what you mean by premiumisation like in terms of a category or premium products as opposed to regular and what is the pricing difference may be and what might be the volume that you could generate in premium versus regular? A: When you talk of premium products that is when you understand a customer and nowadays the need of the customer is evolving, people have become more fashion conscious, the youth has started wearing slippers even in outdoors. In the airports you can see they are using it everywhere and this fashion related footwear these articles we call premium. There when we create good designs, good models there we can expect better fashions.

Ekta: So what sort of volumes do you expect to generate in terms of the premium products, how much will it comprise of in terms of total share of revenues and what might be the pricing differential versus your regular products?
A: This is very difficult to say, it depends upon whatever demand we are able to generate, whatever is the need of the market accordingly we are making all kinds of products based on the market conditions.

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