This footwear stock has raced more than 6% in a day, can the good run continue?

Shares of Relaxo Footwears surged more than 6 percent intraday on September 13, with analysts upebat on the stock as rubber prices come down and expected uptick in sales during the festival season.

At 2.37 pm, the stock was trading 6.7 percent higher at 1,076.60 on the NSE, the stock's biggest single-day gain since October 7, 2021.

Relaxo is among the largest footwear manufacturer in the country that boasts several popular brands including Relaxo, Sparx, Flite and the Bahamas.

While the stock has given negative returns of 18 percent in 2022 so far, long-term investors holding the stock for more than five years have seen the price quadruple from Rs 265 in September 2017.

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Ahead of the festival season, Axis Securities has a “buy call” on the stock with a target price of Rs 1,120.

“We believe value players such as Relaxo will see earnings and profitability improvement as rural and small towns recover, coupled with market share gain from smaller/unorganized players, continued demand for quality value-for-money products in rural and smaller towns, strong festive season and sustained product additions,” the brokerage firm said.

Moreover, macro drivers such as lower per capita consumption in India and lower penetration will remain the company’s long-term growth drivers, it added.

Another key positive for the company is prices of natural and synthetic rubber, and Ethylene Vinyl Acetate (EVA) – key raw materials for Relaxo–coming off from their recent peaks. This will help in margin expansion, analysts said.

Sharekhan, too, is bullish on the stock and has a “buy” rating with a target price of Rs 1,130.

“A diversified portfolio, enhanced distribution network, sustained investment on brands and a customer-centric approach will aid Relaxo in achieving consistent topline growth in the medium to long term,” according to Sharekhan.