Relaxo margin falls 3.20 points as costs outpace revenue in Q2FY27
Standalone revenue was nearly flat sequentially, while expenses rose 3.27%; other income contributed 24.89% of pre-tax profit.
Filed 13 Nov 2026, 18:01 IST · after market close · Relaxo Footwears Ltd (RELAXO)
Key takeaways
- Standalone operating margin narrowed 3.20 percentage points sequentially as expenses rose 3.27% while revenue fell 0.49%.
- Revenue grew 11.63% year on year, but net profit rose only 2.18% as expenses increased 12.60% and interest costs rose 18.62%.
- Operating margin was 12.15%, 0.97 percentage points above the 11.18% median for 343 Consumer Discretionary peers that have reported.
Price around the results
Q2FY27 growth did not flow through to profit
Relaxo's standalone revenue grew 11.63% year on year, but operating profit increased only 5.05%, showing that higher sales were partly absorbed by costs. Net profit rose just 2.18% year on year to Rs 36.95 cr, while sequentially it fell 32.74% as revenue was nearly flat but operating profit declined 21.22%. Other income contributed 24.89% of pre-tax profit, making reported profit less dependent on operations alone.
Costs push margin down for a second straight quarter
Sequential expenses rose 3.27% even as revenue declined 0.49%, narrowing operating margin by 3.20 percentage points to 12.15%. Year on year, expenses also grew faster than revenue, at 12.60% versus 11.63%, reducing margin by 0.76 percentage points. Interest costs rose 18.62% year on year and 4.75% sequentially, adding pressure below operating profit. Margin has now declined from 16.51% in Q4FY26 to 15.35% in Q1FY27 and 12.15% in Q2FY27.
Management points to lean manufacturing and yield improvement
Management said it is maintaining a continuous focus on lean manufacturing and improving yields to optimise operations. The reported 12.15% operating margin was 0.97 percentage points above the 11.18% median among 343 Consumer Discretionary peers that have reported the quarter.
Results were filed after market close
The standalone results were filed after market close on 13 November 2026, so there was no current results-session reaction to assess. Across the previous eight results, the stock rose three times and fell five times, with a median absolute move of 4.11%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹702 cr | ₹705 cr | -0.49% | +11.63% |
| Other income | ₹12 cr | ₹13 cr | -3.70% | +1.79% |
| Expenses | ₹616 cr | ₹597 cr | +3.27% | +12.60% |
| Operating profit | ₹85 cr | ₹108 cr | -21.22% | +5.05% |
| Operating margin (%) | 12.15% | 15.35% | — | — |
| Interest | ₹6 cr | ₹6 cr | +4.75% | +18.62% |
| Depreciation | ₹41 cr | ₹40 cr | +2.98% | +5.21% |
| Profit before tax | ₹50 cr | ₹75 cr | -33.20% | +2.66% |
| Tax | ₹13 cr | ₹20 cr | -34.46% | +4.02% |
| Net profit | ₹37 cr | ₹55 cr | -32.74% | +2.18% |
| EPS (₹) | ₹1.48 | ₹2.21 | -33.03% | +1.37% |
Operating margin of 12.15% compares with a Consumer Discretionary sector median of 11.18% across 343 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
New initiatives
- The company is maintaining a continuous focus on optimizing operations through lean manufacturing and yield improvement.
What to watch
- Whether operating margin holds above 12.15% after its decline from 16.51% in Q4FY26.
- Whether expense growth moves below the 11.63% year-on-year revenue growth rate.
- Whether other income remains below its current 24.89% share of pre-tax profit.