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Relaxo vs Bata | Footwear industry king stock

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The footwear industry is one of the largest consumable and competitive industries in India dominating with numerous brands across all sectors. India is the second largest producer of footwear pairs in the world after China. New brands are evolving in the market in different footwear styles like sandals, flip-flops, shoes, and others. Some companies are even making footwear products with recyclable plastic, and waste materials. 

Despite this, there are only a few brands with a long history and a significant market share. There are two of them: Relaxo and BATA, which is what we are going to talk about today.

Foot ware market size in India 

As per Statista the foot ware market size in India is $27.1 billion dollars in 2023. And the footwear industry is expected to annually by 4.60% CAGR (2023-2027). 

Foot ware growth

Relaxo vs Bata – About

Let us look at the Relaxo stock first

Relaxo

Relaxo is an Indian footwear brand that offers a diverse set of foot ware products for men, women, and children. the company was incorporated in 1984 since then it has become the industry leader in the footwear industry. Relaxo foot ware has some iconic brands such as Sparx, Flite, Bahamas, Boston, Marry Jane, and kids fun.

Revenue

DateDec 2019Dec 2020Dec 2021Dec 2022
Revenue2,2922,4102,3592,653
PAT175226291232
Relaxo footwear revenue and profit

BATA

Bata India is one of the oldest companies in India which was formed way before Indian independence has gotten. The company was incorporated in 1931 as Bata shoe company private limited near Calcutta. The company went public in 1973 as bata limited.

Bata has a retail network of 1,375 stores and 30,000 dealers.

DateDec 2019Dec 2020Dec 2021Dec 2022
Revenue2,9283,0531,7072,387
PAT329326-90100
Bata foot ware revenue and profit

Although both companies certainly possess equal numbers in revenue, the share performance is different.

Relaxo vs Bata – Ratios comparision

Differences

MetricsRelaxo Foot wareBata Foot ware
Market share Relaxo is the no 1 brand in the market shareRelaxo is the no 2 brand in the market share
Revenue GrowthAlthough Relaxo foot ware has a revenue growth of 12.47%, Bata foot ware has a revenue growth of 39.85% in one year. But its 3-year growth is very poor
Profit growth-20.19% is the profit growth in one year.Has a staggering growth of 211.75% in one year compared to the previous year.
ROE, ROCE ROE and ROCE are 14% and 19.5% respectively.ROE and ROCE are 5.65% and 13.22% respectively.
Liabilities2,382 cr ( Total liabilities as of 2022) 3,419 cr ( Total liabilities as of 2022)
Dividend yield0.33%3.84%
Shareholding patternPromoters – 71.02%
Public – 18.35%
DII – 7.64%
Promoters – 50.16%
DII – 31.58%
FII – 4.86%
Ratios comparison between Relaxo and Bata

Relaxo vs Bata – SWOT Analysis

Strengths

Relaxo FootwearBata Footwear
Strengths1) Strong brand reputation – Relaxo has a strong brand reputation in the market with its superior quality and customer service
2) Relaxo offers several brands such as
* Relaxo
* Sparx
*Flite
*Bahamas
* Schoolmate
* Elena
3) Relaxo foot ware offers its products at competitive pricing with superior quality.
1) Bata has a rich legacy in the Indian market and it is one of the oldest brands in India.
2) Bata has a different set of brands such as
* Bata
* Hush puppies
* Power
* Bubblegummers
* Weinbrenner
* Marie Claire
3) Bata has a strong distribution network across India. Its retail network of 1,375 stores and 30,000 dealers.
Weakness1) Dependence on the Indian market – Relaxo doesn’t have a great market share outside of India.
2) Low Pricing – Most of the products produced by Relaxo footwear have competitive pricing. So, the margins are lower
1) Low expansion – Similar to Relaxo, Bata has a very low expansion globally.
2) Limited product innovation – Bata stills lacks in product innovation and development.
Opportunities1) Increasing demand for footwear – There has a growing demand in the footwear industry, especially from the Genz and millennials
2) Online e-commerce –
1) Demand for footwear – There has a growing demand in the footwear industry, especially from the Genz and millennials
2) More products
Threats 1) Rise in competition – new brands are expanding their business by capturing the trending market.
2) Commodity prices – Due to inflation, prices of raw materials are rising which in turn damages the product margins.
1) Rise in competition – new brands are expanding their business by capturing the trending market.
2) Commodity prices – Due to inflation, prices of raw materials are rising which in turn damages the product margins.
SWOT analysis between Relaxo and Bata

Bottomline

Relaxo and Bata are two people’s favorite brands in India which have a strong product line across all the segments. Relaxo lost almost 33% last year whereas compared Bata lost 16%. Relaxo is facing some issues related to this prediction and profit margin. While both of the companies are debt-free, Relaxo has a better return on capital equity.

thewallstreeteye

Varun is a stock market enthusiast and passionate writer. He has 2+ years of experience in writing about stock market and personal finance.