Raymond Limited Fundamental Analysis

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We feel going forward this can emerge as strong wealth creators for the Investors who are patient and willing to take risks.

The risk here is that company has an extremely high level of debt as compared to almost all other darkhorsestocks ideas suggested before and also management in past had internal disputes which created a drag on the company.

Additionally, the demerger can also take an uncertain amount of time due to regulatory approvals despite management’s efforts to get it done as quickly as possible.

Therefore anyone willing to invest in this company is strongly requested to read this report in full and understand that there is a significantly high amount of risk associated with investing in this stock.

Business Overview of Raymond Limited

Raymond is a part of almost 96 years old Raymond group which is a diversified group with majority business interests in Textile & Apparel sectors as well as presence across diverse segments such as FMCG, Realty, Engineering and Prophylactics in national and international markets 55+ Countries including the USA, Europe, Japan & Middle East.

Raymond Limited - Journey

Incorporated in 1925 Raymond now has a significant presence in the Indian Fashion Industry.

The group owns apparel brands like Raymond, Raymond Premium Apparel, Park Avenue, Park Avenue Woman, ColorPlus, Kamasutra & Parx.

All the brands are retailed through ‘The Raymond Shop’ (TRS), with a network of over 700 retail shops spread across India and overseas, in over 200 cities.

The Company has a retail network of 1,638 stores, including 1,589 stores in about 600 towns and cities in India and 49 overseas stores in nine countries. It is one of the largest vertically and horizontally integrated manufacturers of worsted suiting fabric in the world.

With an expansive network of over 20,000 points of sale in India, Raymond and its brands are also available in tier IV & V cities.

Diversification in the Business


Raymond is one of the largest vertically and horizontally integrated manufacturers of worsted suiting fabric in the world and commands a dominant market share of over 60 percent in the worsted suiting fabric space in India.

It can manufacture suiting fabric extending across all wool, poly-wool, silk, polyester viscose blend, cotton blend, linen blend, and other premium blends.

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Marketed under the brand ‘Raymond Fine Fabrics’, it is undoubtedly amongst the most preferred brands in the Textile sector.

It produces suiting fabric, with a capacity of producing 31 million meters of wool and wool-blended fabrics.


Raymond manufactures some of the finest shirting fabrics in India, marked by innovative designs and aligned to the latest fashion trends.

A B2B business, Raymond Luxury Cottons, produces the world’s finest 340s count cotton and 150 lea pure linen fabrics.

Raymond Limited is the largest OTC branded fabric player in the organized shirting segment and commands a strong brand preference in the category.


A white label-integrated supplier to leading international brands, the garmenting business includes the manufacturing of high-end suits, jackets, trousers, and shirts with exports spanning to the USA, Europe, and Japan.

Silver Spark Apparel Ltd is the only Indian manufacturer with expertise to craft Full Canvas Suits.

Retail Business

With the launch of its first exclusive retail showroom, at King’s Corner, in Ballard Estate (Mumbai), Raymond’s expansive retail presence has been the cornerstone of the brand’s success.

Raymond Limited has an indomitable retail presence with over 2 million square feet of retail space spread across its 1100+ stores spread in over 380+ cities & towns and is growing steadfastly.

Today, Raymond Group is amongst the three leading branded apparel players in the menswear industry with a portfolio of four Power Brands – Raymond Ready-to-wear (RRTW), Park Avenue (PA), Color Plus (CP), and Parx.

E-commerce Business

Marking its foray into the e-commerce space, Raymond launched raymondnext.com – a one-stop fashion solution for all brands under the Raymond umbrella.


Raymond UCO Denim (a JV with UCO NV of Europe) is a pioneer in the introduction of specialty ring denim in India.

The business caters to customers across the Americas, Europe, Asia as well as domestic markets.

Tools and Hardware Business

Raymond Limited Group ventured into the engineering business in early 1949, with the inception of JK Files & Tools.

This segment comprises of manufacturing of steel files and cutting tools and the marketing of hand tools and power tools.

Today, JK Files & Tools is the largest manufacturer of Steel Files in the world. This business holds over 60% market share in India and 30% share in the global markets and is the leader in the category.

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FMCG Business

The Raymond group forayed into the FMCG business in 1964 through its subsidiary JK Helene Curtis and has various products in the male grooming space such as the Park Avenue range of fragrances, soaps, shaving foam, and gel, among others.

The Raymond Group has a noteworthy presence in the FMCG business through associate companies – Raymond Consumer Care Private Limited.

With pioneering brands like Park Avenue and KS; home care segment through Premium brand and sexual wellness segment through KamaSutra brand, Raymond is steadfastly expanding its presence in the category.


Raymond acquired control of brand KamaSutra globally by buying out Ansell’s stake in a joint venture entity known as JK Ansell Pvt. Ltd. Ansell is an Australian company that had a 50 percent stake in the joint venture company.

Raymond Group already owned the balance stake.

This acquisition paved the way for Raymond to further scale up the FMCG Business and unlock the immense potential of brand KamaSutra globally. Raymond announced the formation of its FMCG group last year.

KamaSutra Condoms is India’s second-largest condom brand. KamaSutra was launched in 1991 and is today a leading condom brand in India.

It is also exported to over 40 countries around the globe

Automotive Components

Raymond Limited forayed into the Automotive Components sector by acquiring a controlling stake in Ring Plus Aqua Ltd- a prominent Ring gear & Flex-plate manufacturer in India.

Incorporated in 1984, Ring Plus Aqua Ltd has a long celebrated history with the global Auto industry through its manufacturing base for Starter Gears, Water Pump Bearings & Flex Plates.

Raymond Group is one of the three leading branded apparel players in the menswear industry comprising a portfolio of four Power Brands – Raymond Ready-to-wear (RRTW), Park Avenue (PA), Color Plus (CP), and Parx.

All four brands command a significant share of wardrobe solutions in the market.

Raymond has also forayed into the ethnic wear segment through the launch of ‘ethnix’ brand.

Raymond Realty Business

Brand Raymond has pushed the benchmarks of quality, leadership, and extraordinary product across fashion, apparel and lifestyle industries for years now.

From clothing the Complete Man in impeccable sartorial flair, the legacy of Raymond now enters into the Real Estate space with Raymond Realty.

The same dedication to quality, minute details, and absolute style will now take a form in luxurious residential spaces.

The fabric of choice this time is brick and mortar. They have woven into residences that offer the man-about-town and his family a COMPLETE LIFESTYLE.

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In 2019, Raymonds announced its venture into the real estate business under Raymond Realty.

The new venture is poised to start with an investment of Rs. 250 crore (approx $36 million) in developing mid-income and premium housing units on 20 acres of land in the growing suburb of Thane. Raymond group holds over 125 acres of land in this region.

In addition, the group also has business interests in readymade garments, designer wear, cosmetics & toiletries, engineering files and tools, prophylactics, and air charter operations.

Raymond Limited also has a significant presence in theB2B space through its garmenting business.

Its state of the art & wholly-owned subsidiaries such as Silver Spark Apparel Ltd, Celebrations Apparel Ltd & Everblue Apparel Ltd by crafts suits, trousers, shirts & Jeans for leading fashion labels across the world and is the only manufacturer of Full canvas premium jackets in India.

It ventured into the engineering business with the establishment of JK Files (India) Ltd. in 1949. Today, JK Files Ltd. is a leading manufacturer of steel files in the world with a domestic market share of about 65% in the business of the file.

The group also has a presence in the auto components industry through its subsidiary Ring Plus Aqua Ltd.

This business comprises the manufacture of Ring Gears, Flexplates and Water pump bearings.

The company is present in diverse industry segments such as Automotive, Industrial and Power generators, Agricultural and Marine Applications, marked by strong relationships with domestic and international OEMs.

Recently, Raymond Group forayed into the real estate development business. With a central theme of ‘Go Beyond’, the company has undertaken the project to build quality housing for all.

A large gated community named ‘Aspirational District’ is spread over 14 acres that celebrate a new epoch in living.

Raymond Limited Group


Raymond Ltd announced the demerger of its core Lifestyle business to be listed as a separate entity – Raymond Lifestyle Ltd.

The move is a crucial part of the strategic transformation aimed at leveraging value through the Company’s strengths by optimizing its resources and enhancing its brand equity.

The resulting simpler group structure will further infuse efficiencies across the organization. Overall it offers a strong and more focused choice to investors, thereby unlocking shareholder value.

Detailed Transaction Overview 

Demerger of Raymond Limited
Demerger of Raymond Limited

  • Demerger of its core Lifestyle business into a separate entity that will be listed through mirror shareholding structure
  • Every shareholder of Raymond Ltd will be issued shares of the new company in the ratio of 1:1
  • Create a clear demarcation of Lifestyle & other businesses leading to the simplification of the Group structure


The deleveraging and demerger will enable Raymond ltd to create a stronger, more efficient, and simplified organization.

The two separately listed companies will optimise their resources & strengths and will focus their energies on accelerated growth. Both the entities will have the advantage of brand Raymond that exemplifies Quality, Trust, and Excellence through its 95-year journey.

The existing company will have real estate development as its core business which has already received overwhelming response in the market.

The new company will continue to be a market leader in textiles and branded apparel segment and will further pursue newer growth opportunities.

Demerger has been an important step for the group. The company has received approval from stock exchanges and already filed an application with NCLT.

Due to the Covid-19 pandemic and related lockdowns, the entire business environment and processes including regulatory approvals have been impacted due to the temporary closure of business offices and government departments.

The company expects the overall process to be completed in the current financial year – FY22.

Financials of Raymond Limited

Revenue, EBITDA, PBT, and Net Profit

Raymond Limited Fundamental Analysis

Geography-based Revenue

Profit and Loss

Profit Margins

Cash, Reserves, and Debt Condition

Q4 FY2021 Results

  • Consolidated revenue for FY21 at Rs. 3,648 Cr, compared to Rs. 6,578 cr in the previous year
  • Pandemic significantly impacted the revenues during the 1st Half. However, with the unlocking sales recovered almost 3 times in H2 as compared to H1
  • Raymond Limited reported positive EBITDA @ Rs. 135 cr in FY21 compared to Rs. 612 cr in the previous year.
  • Net working capital reduced by Rs. 738 cr from Rs. 1,855 cr in Mar-20 to Rs. 1,117 cr in Mar-21 by focused approach on collections and reducing inventory
  • Operating Cash flow: Rs. 702 Cr & Free Cash flow: Rs. 417 Cr
  • The cost rationalization efforts and effective working capital management helped to reduce Net Debt by 24% which is Rs. 443 cr from Rs. 1,859 Cr in Mar-20 to Rs. 1,416 cr in Mar-21
  • Q4FY21 revenue grew by 9% over the previous year from Rs. 1,291 cr to Rs. 1,407 cr.
  • EBITDA of Rs. 197 cr with EBITDA margins of 14.0% which has improved sequentially from 12.2% in Q3FY21 as well.
  • Net profit of Rs. 56 cr for the quarter compared to Net Loss of Rs. 68 Cr in last year
  • The core business of Branded Textile segment grew by 24% led by strong pickup in primary sales from upcoming wedding season and Branded Apparel segment saw improvement in recovery led by extended EOSS and marriage demand . Engineering businesses continued strong profitable growth momentum with Tools & Hardware having strong growth of 53% over previous year and Auto Components also having a strong 46% growth over previous year.
  • The company was able to maintain about Rs. 600 – 650 cr of Cash & Cash Equivalents throughout the period while reducing the debt at the same time.
  • The company’s gross debt was lower at Rs. 2,076 Crores vis-à-vis Rs. 2,191 Crores as of end of December and Rs. 2,430 Crore as of end of March, 2020. The net debt levels in March 2021 stood lower at Rs. 1,416 cr compared to Rs. 1,583 Crore in December, 2020 and Rs. 1,859 Crore in March, 2020 .
  • Raymond Limited has maintained a strong focus on de-leveraging and demonstrated a net debt reduction of over Rs. 1,000 cr over the last 6 quarters. This reduction has been achieved mainly through internal cash accruals and proceeds of land sale which was done in 3rd quarter of FY20.

Segment-wise Financials

  • Branded Textile: segment grew by 24% in Q4
  • Suiting business grew by 24%
  • B2C Shirting grew by 40% over the previous year
  • Branded Apparel witnessed recovery at 60% of the previous year levels
  • Garmenting segment sales at Rs.126 Cr, witnessed recovery at 69% levels led by a recovery in Bulk business due to slowly opening up of global markets.
  • High-Value Cotton Shirting segment sales at Rs. 133 Cr, grew by 12%
  • Tools & Hardware segment sales at Rs. 120 Cr, growth of 53% vs PY levels
  • Auto Components segment sales at Rs. 69 Cr, reported growth of 46% over the previous year
  • Real Estate business, continue to maintain growth trajectory with one of the strongest quarterly bookings in 4Q since the launch of the project driven by consumer incentives
  • Overall, received ~214 bookings in 4Q resulting in a total of 1,387 bookings (over 60% of the total inventory of ~2,350 units launched is sold) till Mar’21 with a booking value of ~Rs. 203 Cr
  • Raymond’s affordable project located in prime location in Thane with unparalleled connectivity has received about 400 bookings in H2. Its construction is in full swing and currently the status is: 38th-floor slab competed for Towers 1, 2 & 3 and 20th-floor work in progress for Tower 4 while for Towers 5, 6, 7 & 8 – Ground Floor work in progress; Tower 9: Excavation complete and Tower 10: Excavation work in progress
  • Currently, almost 30% (384 out of 1353) of the company’s stores are operational.

The Future Ahead for Raymond Limited

The company is having discussions with a couple of customers both in Europe and the US to diverge and they have been successful in a couple of cases.

With respect to order book what has happened over the last one year is there are a lot of inventories, which have been consumed in the international space and especially in the US all the retailers have reduced their inventory and now they have also seeing a further surge in demand and they are seeing increased improvement in full-price sales for them as compared to the discounted sales, which are a majority ratio.

So, so far the company has seen the reflection in its order book for the future during H1 and the company is very positive that this can convert into a good quarter and half year past.

On the real estate side, that company is selling close to 3,000 apartments, which puts the revenue close to Rs.2,800 Crores to Rs.2,850 Crores, and based on this project the net profit, which the company is going to generate over the next three to four years would be in the range of Rs.750 Crores to Rs.850 Crores that is the kind of profitability company is expecting from the real estate projects.

Apart from that company is also sitting on huge land bank which is close to 100 acres, roughly valued at around Rs.3,500 Crores.

New Wedding Campaign

Raymond has launched its latest campaign titled ‘Weddings by Raymond’ welcoming the season of weddings. The 360 degree marketing campaign spells for its viewers the modern way of weddings.

With its thought-evoking storyline, the campaign showcases couples and their families starting a new journey by embracing something new, be it a new definition of equality, a new culture, a new bond, and a beautiful new dream.

The company is expecting a strong pickup in primary sales from the upcoming wedding season.


The Branded Textile business has registered a significant recovery with topline growing by 24% YoY in Q4, The Branded Apparels segment has seen a recovery to the tune of 60% of the previous year levels , The Tools & Hardware business grew by 15% yoy this quarter with EBIDTA margins at 18.5%.

The real estate business has seen one of the highest booking of 214 in this quarter as compared to 179 bookings in the December quarter.

The total cumulative bookings as on March,21 have now reached almost 60% (1,387 units) of the total units opened for booking (2,350 units).

Additionally there is debt reduction of around 1000 crores from internal accruals and cash and equivalents have increased from 328 crores to 552 crores which suggest the company’s strong financial position despite posting loss for the year ended FY 21.

However going forward management is strongly confident of the revival of the business on an overall basis that is from the domestic as well as global perspective with company in talks with customers for many orders in recent times .

Additionally Company is also working on de-merging its business across two listed companies which could again be a value unlocking for the company and can be rewarding for the shareholders as well.

Apart from the above , if we put in simple terms Raymond Ltd is trading at around 372 Rs while the value of the Land Bank company has is around 3500 crores which are approx 530 Rs per share basis.

Considering the total debt of the company at 2200 crores there would still be significant value left after discharging the complete debt of the company.

Normally we do consider stocks with a holding period of 1-2 years at least but in cases where there is demerger considered we would suggest users to increase the time horizon to beyond 2 years that is in some cases there can be significant delays on account of compliances as well as permissions from the various authorities and not to mention there always prevails risk of demerger not going through due to various regulatory concerns .

So those points must also be kept in mind while exploring Raymond Limited in the long term.

Also, there were various other points related to the family disputes which we have not covered as we feel that it is all behind the company. Therefore users are requested not to send unnecessary queries regarding the same.

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