Raymond steady after multi-fold rise in Q3 Profit to Rs101cr

27 Jan 2022 , 01:16 PM

Raymond Limited reported higher profit at Rs101cr in Q3FY22 against Rs22.1cr in Q3FY21. Revenue jumped to Rs1,843.3cr from Rs1,243.4cr yoy. The company to demerge its real estate operations into subsidiary.

The company recorded highest Profit Before Tax (PBT) of Rs186cr and the highest margin of 9.9% in last 10 years. Highest ever EBITDA of Rs303cr with EBITDA margin of 16.2%. Significant reduction of net debt by Rs310cr leading to Net Debt of Rs1,253cr.

At around 12.50 pm, Raymond Ltd was trading at Rs777.50 per piece down by Rs6.45 or 0.82% from its previous closing of Rs783.95 per piece on the BSE

The company said in a filing that in domestic markets, improved consumer sentiments and strong festive & wedding season demand across our B2C businesses and strong momentum of export orders maintained in garmenting and engineering businesses helped in achieving 45% growth in total income to Rs1,871cr in the quarter, ~100% of pre-Covid levels.

It continued focus on cost optimization enabled reduction in overall operating cost in Q3FY22 & 9MFY22 by Rs102cr (lower by 18%) and Rs407cr (lower by 25%) respectively as compared to pre-covid levels of FY20.

The company launched premium residential project ‘The Address by GS’ at Thane during the quarter and received an overwhelming response with ~100 units booked within 45 days of launch.

Gautam Hari Singhania, Chairman & Managing Director, Raymond Limited said, “I am pleased to announce an overall strong performance in the quarter with business achieving 100% of pre-Covid levels. With our focused approach on capitalizing on the growing demand for our products and continued cost optimization, we delivered record profitability. We generated free cash flows to reduce debt and are progressing towards being a net debt-free business.

With Union Budget to be announced shortly, we are hopeful that there will be a further impetus for improving consumerism and expect reforms that increases the spending power of the consumer which will provide opportunity for Indian economy to achieve higher GDP growth in the coming fiscal.”

Q3FY22 Segmental Performance
Branded Textile segment sales reported strong growth of 49% to Rs899cr vs Rs603cr in previous year. The growth driver being the improved consumer sentiments and strong momentum in secondary sales on the back of buoyant festive demand, wedding related purchases and higher footfalls in retail outlets. The segment reported robust EBITDA margin of 21.2%, higher by 433 bps compared to previous year. Improved sales and operational efficiencies contributed largely to the growth.

In Branded Apparel segment, strong sales growth was witnessed in all trade and retail channels across regions leading to increase in sales by Rs105cr from Rs211cr in previous year to Rs316cr in Q3FY22. Online channel continued to contribute well during the quarter. The segment reported a healthy EBITDA margin of 10.7% higher by 771 bps compared to previous year mainly due to better sales and continued operational efficiencies.

Retail Operations:

• ~100% of our retail network of 1,411 stores operational as on 31st December, 2021
• Total 12 stores opened during the quarter mainly in Tier II — VI towns
• The Raymond Shop (TRS) network witnessed 13% growth in average transaction value (ATV) vs. previous year.

Garmenting segment sales grew strongly by 48% to Rs203cr compared to Rs137cr in previous year, mainly driven by growth in bulk business due to high demand from customers in US, UK & Europe markets. EBITDA margin for the quarter improved to 8.6%, higher by 204 bps compared to previous year, mainly due to higher utilization levels.

High Value Cotton Shirting segment sales recorded a high growth by 72% to Rs148cr compared to Rs86cr in previous year, led by higher cotton fabric sales in domestic markets. The segment reported lower EBITDA margin of 8.6%, impacted due to higher raw material prices.

During the quarter, the Engineering business was consolidated under JK Files & Engineering Ltd. On aggregate basis, the sales grew by 28% to Rs209cr as compared to Rs163cr in previous year.

Sales growth mainly driven in exports markets of US, Europe, Asia & Africa and in domestic market there was continued improvement in demand. The business reported EBITDA of Rs31cr in the quarter.

Real Estate segment sales grew by 177% to Rs175cr from Rs63cr in previous year. The business witnessed strong growth in bookings due to improved customer sentiments and overall liquidity in the market. Fast pace construction being one of the USP of TenX project contributed significantly for uptick in sales. Overall, project ‘Ten X’ received 208 bookings in Q3FY22 resulting in total 1,763 units booked (~73% of total inventory launched) till Dec-2021 with a booking value of Rs1,722cr.

Launched ‘The Address by GS’ premium residential project and received overwhelming response with 117 bookings in Q3FY22 (50% + of total inventory launched) with a booking value of Rs252cr. The Board of Directors approved the Real Estate business division to be subsidiarized into wholly owned subsidiary of Raymond Limited