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Rs 1 lakh to Rs 1 crore in ten years! Did you catch this multi bagger stock?

Rs 1 lakh to Rs 1 crore in ten years! Did you catch this multi-bagger stock?

Rs 1 lakh to Rs 1 crore in ten years! Did you catch this multi-bagger stock?
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By Pranati Deva  Jul 19, 2019 2:26:15 PM IST (Published)

The footwear firm has surged nearly 16,700 percent, rising from Rs 2.5 in 2009 to Rs 420 per share in this time. If you had invested Rs 1 lakh into the stock ten years ago, the investment would be worth Rs 1.68 crore today.

The Relaxo Footwears stock gave massive returns to investors during the last ten years. The footwear firm has surged nearly 16,700 percent, rising from Rs 2.5 in 2009 to Rs 420 per share now. If you had invested Rs 1 lakh into the stock ten years ago, the investment would be worth Rs 1.68 crore today.

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The smallcap stock gained nearly 11 percent in the last one year and 13 percent in 2019. In comparison, the benchmark Sensex rose 5.6 percent in the last one year and 6.4 percent in 2019. The stock hit its 52-week high of Rs 497 on July 2, 2019, and a 52-week low of Rs 333 on October 12, 2018.
Compared to its peers, the company has proved to be a multi-bagger and the top gainer in the industry. Bata generated 1684 percent returns in the last 10 years, while Liberty Shoes clocked 65 percent returns during the same period.
Relaxo has shown eight consecutive quarters of double-digit volume growth despite challenging circumstances. The company has witnessed a constant rise in its sales over the last 10 years. Sales rose to Rs 2,292.08 crore for fiscal ending March 2019 compared to Rs 407.46 crore for the fiscal ended March 2009. For Q4, net profit of Relaxo Footwears rose 1.78 percent to Rs 54.41 crore Yoy. Net Sale rose 15.51 percent to Rs 635.70 crore in Q4 March 2019 YoY.
JM Financial recently initiated coverage on Relaxo Footwears with a 'buy' rating as its premium valuations are merited for stable growth, expansion in new territories coupled with strong brand equity.
"Operating margins have expanded by 365 bps over a 5-year period. Good return ratios with a 5-year average ROE of 25.3 percent and ROCE of 26.8 percent are on the back of improving product mix and penetration into new geographies," the brokerage noted.
The board recommended a final dividend of Rs 1,80 per equity share (pre- bonus) and has also approved bonus in the ratio 1:1 i.e one equity shares for every share held.
The last bonus issue that Relaxo Footwears announced was in 2015 in the ratio of 1:1. The share has been quoting ex-bonus from July 1, 2015. The bonus issue was announced on May 11, 2015.
Relaxo Footwears Limited (RWL), a part of Relaxo Group which has a major interest in footwear production, was incorporated on September 13, 1984, as a private limited company to market the products of group concerns such as Hawai slippers, lightweight slippers, canvas shoes and PVC footwear.
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