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Raymond Lifestyle Ltd., the recently demerged retail and lifestyle arm of Raymond Ltd., is poised to make its market debut on Thursday, September 5th. This separation from the parent company, which occurred last month, is anticipated to unlock substantial shareholder value, ushering in a new era for the lifestyle business. Analysts from various brokerages have expressed optimism about Raymond Lifestyle's future, highlighting its potential for significant growth across various segments.
Antique Stock Broking, in particular, anticipates Raymond Lifestyle's ability to scale its branded apparel segment by replicating the success of its TRS brand across other lines. The brokerage expects the company to expand its exclusive brand outlets (EBOs) through an asset-light model, aiming to reach 250-300 stores for each brand within the next three years. The focus on wedding-related products, which constitute 35%-40% of Raymond Lifestyle's revenue, is expected to contribute to a 15% compound annual growth rate (CAGR) over the medium term, driven by differentiated premium products and an expanding network of ethnic stores.
Furthermore, Antique Stock Broking projects Raymond Lifestyle to achieve a revenue CAGR of 13% and an EBITDA CAGR of 15% over the fiscal years 2024-27. The brokerage estimates a fair valuation for the company at Rs 18,000 crore based on its projections for fiscal year 2027. This bullish outlook is further substantiated by Raymond Lifestyle's impressive sales figures in the wedding business, reaching Rs 2,550 crore in fiscal year 2024. Amit Agarwal, the Chief Financial Officer of Raymond Group, expects the company to double its EBITDA to Rs 2,000 crore within the next three years. In addition, Agarwal anticipates a 12-15% sales growth in the lifestyle sector, with Raymond Lifestyle aiming to secure a 7% market share in the dynamic men's-wear wedding market by 2027.
MOFSL, which attended Raymond Lifestyle's investor conference, provided further insights into the company's financial performance and future plans. The firm reported that Raymond Lifestyle invested Rs 100 crore in capital expenditure (capex) during fiscal year 2024 to increase its production capacity to 10.7 million pieces. An additional Rs 100 crore capex is planned for fiscal year 2025, which is projected to generate Rs 400 crore of incremental revenue by fiscal year 2027, translating to a 2x asset turnover ratio. Assuming an EBITDA margin of 10%, MOFSL forecasts Rs 40 crore of incremental EBITDA with a 16% post-tax incremental return on capital employed (RoCE). The brokerage models an 11% revenue growth over the fiscal years 2024-27.
InCred Equities highlighted the strategic importance of Raymond Lifestyle's Vapi facility in Gujarat, which is the largest in its suiting segment at 112.6 acres and contributes 45% to the segment's revenue. The facility is equipped to manufacture high-quality suiting fabrics across various price points. The company's other two suiting facilities are located in Jalgaon (38 acres) and Chhindwara (100 acres). InCred Equities emphasizes Raymond Lifestyle's strategic move to capitalize on the rising demand for ethnic wear in India, particularly for wedding-related occasions. The company's target of adding 300 new Ethnix stores over the next two to three years positions it to capture this growing market. Management projects a 1.5x growth in the wedding business by fiscal year 2027 and a 2.3x growth by fiscal year 2030 compared to fiscal year 2024 levels, underscoring the significant potential of this segment to drive substantial revenue growth.
Source: Raymond Lifestyle shares to list tomorrow; what analysts say ahead of stock market debut