Relaxo may find it difficult to fully pass on the rise in costs, which is likely to weigh on margins in the near term
Relaxo Footwears Ltd is walking a tightrope. Results for the three months ended March (Q4FY22) show costs pressures have deeply hurt profitability. Ebitda (earnings before interest, tax, depreciation and amortization) margin has contracted by 587 basis points (bps) year-on-year (y-o-y) to 15.9% last quarter. One basis point is 0.01%.