Motilal Oswal has issued a sell rating on Relaxo Footwears with a target price of ₹330 in its research report dated January 30, 2026. According to the brokerage's analysis, despite recent stock correction, valuations remain stretched at approximately 50x FY27E EPS. The recommendation is based on 35x FY28E EPS valuation methodology.
The company's Q3FY26 performance was impacted by GST-related transition effects, as reported by Motilal Oswal. Despite these challenges, revenue remained flat year-on-year, successfully arresting a five-quarter streak of decline. However, demand remained subdued amid cautious consumer behavior and persistent competitive pressure from unorganized players in the footwear market.
To protect volumes and support distributors, Relaxo Footwears stepped up sales promotions, resulting in near-term margin pressure. According to Motilal Oswal's analysis, EBITDA margin declined 125 basis points year-on-year to 11.2% during the quarter. This strategic approach reflects the company's focus on market share retention despite margin compression.
Recent financial data shows Relaxo Footwears reported net sales of ₹668.03 crore for December 2025, representing a 0.17% year-on-year growth. The company faced additional challenges with employee costs increasing by ₹14 crore due to abrupt labour law reforms implemented by the government. Despite these headwinds, management commentary remains very positive about margin improvement in future periods.
Current market data shows Relaxo Footwears trading at various price levels with different target recommendations, reflecting mixed analyst sentiment. The stock has shown very bullish trend in recent periods, though the sell recommendation from Motilal Oswal suggests caution given the stretched valuations and competitive pressures in the footwear sector.
