Raymond Ltd Management Discussions

This Management Discussion and Analysis (MDA) provides a comprehensive overview of Raymond Limiteds performance for the fiscal year ended March 31, 2025. It delves into the companys financial results, operational advancements, and strategic initiatives, particularly focusing on the progress of its demerger exercise. This report should be read in conjunction with the audited financial statements of Raymond Limited and its demerged entities for FY2025.

. i econoMic anD inDustry lanDscape global econoMy overview anD outlook¹

In calendar year 2024, the global economy demonstrated considerable resilience, achieving a growth rate of 3.3% according to the International Monetary Funds (IMF) World Economic Outlook. This growth occurred despite of uneven progress across different regions and sectors. Headline inflation eased to 5.8%, moving closer to central bank targets and triggering the initial round of interest rate cuts in several major economies.

Labour markets remained relatively robust, with unemployment rates hovering near historic lows, although there were signs of slight softening. Strong nominal wage increases, coupled with declining inflationary pressures, led to an improvement in real household incomes. Nevertheless, private consumption stayed muted, reflectingcautious consumer sentiment and persistent uncertainty.

Geopolitical tensions, especially in Eastern Europe and the Middle East-intensified, contributing to global instability. These developments disrupted trade, investment flows, and financial markets, continuing to weigh on business confidence and long-term investment planning. outlook

The global economy is at a critical juncture,withsignificant internal and external imbalances and vulnerabilities. Major policy shifts are underway, generating a new wave of uncertainties with potentially significant implications for the functioning of the global economy. The global economic outlook for 2025 is characterized by slower growth, with the US trade policy playing a in shaping the landscape. The average US duties remain historically elevated, continuing to exert a drag on global trade and activity. This uncertainty surrounding US trade policy is expected to contribute to slower global growth, with advanced economies projected to grow by only 1.2%.

The ongoing war situations in Russia and Ukraine and escalating war situation in middle east countries can present significant risk of oil price surges, finances and raising inflation. Disruption of trade routes can lead to higher shipping and insurance costs and volatility in financial markets which may lead to investors shift towards safe-haven assets. The emerging geopolitical landscape presents a cautious and complex picture of the global economy for the year 2025. Escalating trade tensions and policy uncertainty and escalating war situations are major drivers for the economic outlook. The divergent and swiftly changing policy positions and deteriorating sentiment could lead to tighter global financial conditions. Demographic shifts threaten fiscal sustainability, while the recent cost-of-living crisis may reignite social unrest. The financial market landscape is marked by increased uncertainty and market volatility, against the backdrop of stretched valuations within many segments of financial markets. Global growth is projected to decline, following a period of steady but underwhelming performance. As per the IMF report of April 2025, the global growth is expected to decline to 2.8% in 2025 and 3% in 2026, down from 3.3% in both 2024 and 2023. Advanced economies are projected to grow at 1.4% in 2025, with the US slowing to 1.8% and the Europe at 0.8% and emerging market and developing economies are expected to slow down to 3.7% in 2025 and 3.9% in 2026. ii inDian econoMy overview anD outlook²

³India continues to be one of the fastest-growing major economies globally, supported by its favourable demographic profile, strong domestic consumption, ongoing structural reforms, and a sustained drive towards digital transformation. Key contributors to this growth include healthy GST collections, expanding infrastructure, manufacturing sectors, and rapid technological adoption across industries. The governments emphasis on improving the ease of doing business and nurturing a vibrant startup ecosystem has further bolstered economic momentum. However, GDP growth moderated to 6.5% year-on-year role in FY2025, reflecting the combined impact of global economic headwinds and domestic challenges. Factors contributing to this slowdown include a decline in manufacturing output, elevated food inflation, tepid urban demand, limited job creation, widening trade deficits, and subdued private sector investment. Despite these hurdles, India remains on a stable growth trajectory, driven by robust manufacturing, diversifying services, increased infrastructure spending, and government-led initiatives promoting digitalisation, and business-friendly reforms. Efforts to diversify trade through new free trade agreements have helped mitigate external risks, while rising urbanisation and growing middle class have supported consumer spending. Inflationary pressures, driven by global supply chain disruptions and volatile commodity prices, prompted the Reserve Bank of India (RBI) to take proactive measures to balance inflation control with economic growth. Indias total exports reached a record high of $824.9 billion in 2024-25, driven by strong services exports and increased merchandise exports excluding petroleum products. This figure represents a 6.01% increase over the US$778.1 billion exported in 2023 24, marking a significant leap in the countrys economic trajectory. Private consumption saw a rebound, contributing to overall economic growth. ⁴Indias real GDP is expected to expand by 6.3% in FY2025-26 and 6.4% in FY2026-27. This growth will be primarily driven by a gradual recovery in private consumption, supported by rising real incomes due to moderate inflation, recent tax relief measures, and a strengthening labour market. Investment activity is likely to benefit from falling interest rates and robust public capital expenditure. However, increased tariffs from the United States may dampen export performance. Inflation is projected to remain stable at around 4%, in line with trend-level economic growth. Nonetheless, risks such as spike in global commodity prices could lead to higher food inflation.

The Union Budget for FY2025-26 outlines a path of moderate fiscal consolidation, targeting a reduction in the fiscal deficit from 4.8% of GDP in FY2024-25 to 4.4% in FY2025-26. With inflation well within the target range, monetary policy is expected to gradually shift towards a more accommodative stance. Enhancing the efficiency of public spending through better targeting of energy and fertilizer subsidies, along with rationalising tax expenditures, could free up resources for other developmental priorities. Additionally, improvements in logistics, digital infrastructure, and greater policy predictability especially in tax administration are expected to encourage private sector investment.

iii. inDustry overview global real estate sector perforMance in 2024

The global real estate sector in 2024 navigated a transitional year, shaped by macroeconomic stabilization, shifting inclusion, demand patterns, and increased focus on sustainability. Residential Real Estate saw mixed performance. While affordability challenges persisted in developed markets due to high interest rates and tight supply, emerging economies particularly in India and Southeast Asia witnessed strong housing demand driven by urban growth and rising incomes. Government support measures in China attempted to stabilize its troubled property sector, with modest results.

Commercial Real Estate continued to undergo structural change. The officesegment remained under pressure in many global cities as hybrid work reduced demand for traditional office space. Conversely, industrial and logistics assets performed strongly, fuelled by e-commerce growth and supply chain reconfiguration. Retail real estate showed signs of recovery, especially in regions with strong tourism and consumer spending.

Investment activity remained cautious but selective. Global real estate investors favored asset classes like logistics, data centers, healthcare, and green buildings. Real Estate Investment Trusts (REITs) showed varied performance, with industrial and alternative segments outperforming office and retail.

Sustainability and ESG integration became central to asset strategy and development. Regulatory focus on climate resilience, energy efficiency, and green certifications continued to grow across regions. iv. inDian real estate Market:⁵ overview of the inDian housing sector

The Indian housing sector continues to be a vital contributor to the countrys economic growth, with its share in GDP expected to reach 13% by 2024 25. This underscores both its current strength and future potential. Real estate is Indias second-largest employment generator after agriculture. Recognizing housing as a basic necessity and a major source of employment, the government has consistently supported the sector through budgetary allocations, regulatory reforms, and targeted welfare initiatives.

By 2030, the housing market is anticipated to grow into a USD 1 trillion industry, propelled by demographic changes, supportive policies, and global trends. Tier 2 and Tier 3 cities are emerging as significant growth hubs. Urban homeownership is on the rise and projected to increase from 65% in 2020 to 72% by 2025, driven by affordable financing, the trend toward nuclear families, rapid urbanization, and a younger population entering the market. The Urban population is expected to hit 542.7 million by 2025. The FDI inflow in construction between year 2000 2024 has reached US$ 44.46 billion supporting momentum for continuous growth. The major growth vectors for real estate can be summarised as under:

1. policy support

100% FDI allowed in township development.

PM Awas Yojana Urban 2.0: Rs. 10 lakh crore investment for housing.

2. government support

PMAY-U: 119.7 lakh houses sanctioned.

REITs and InvITs raised US$ 9.7 billion.

Tax reliefs and stamp duty reductions.

Green building movement gaining momentum.

3. increasing investments

PE investment rose 6% to US$ 2.82 billion in FY25.

Foreign inflows up 37% YoY in H1 2024

4. robust Demand

Luxury housing sales up 53% in 2024.

Data center demand to grow by 15 18 million sq. ft. by 2025.

5. attractive opportunities

Real estate CAGR of 9.2% (2023 2028).

Blackstone plans US$ 22 billion additional investment by 2030.

The sectors growth, which picked up momentum in 2023, continued robustly through 2024-25. Residential sales across Indias top eight cities reached 4.5 lakh units, reflecting a 10% year-on-year growth. New project launches hit a record 5.6 lakh units. Early 2025 saw further momentum, with 1.4 lakh units sold and inventory levels dropping by 8%.

The mid-income housing segment, priced between 40 80 lakhs, remains dominant, accounting for 34% of new launches. Demand is robust across all price brackets, supported by stable interest rates, rising disposable incomes, and a growing preference for larger homes. There is a noticeable shift toward high-value home loans, driven by increased construction costs and the preferences of upper-middle-class buyers and High Net-Worth Individuals (HNIs) for luxury and spacious homes.

Despite these advancements, India still faces a significant housing deficit, with a shortfall exceeding 31 million units. Of this, 26 million units are needed by the Lower Income Group (LIG) and Economically Weaker Sections (EWS), particularly in rural and semi-urban areas. In urban regions, the shortage is mainly due to overcrowding and substandard housing, while in rural areas, it stems from the prevalence of non-serviceable or kutcha homes.

v. rayMonD realty perforMance

Realty business demonstrated strong performance in the fiscal year 2024-25, marked by significant revenue growth, robust property sales, and strategic expansion initiatives. The Companys revenue in FY 2024-25 surged by 45% year-on-year, reaching Rs. 2,313 crore compared to

1,593 crore in the previous fiscal year. The Company has recorded Pre- sales value of Rs. 2,314 crore in FY 2024-25.

thane Market:

Our maiden project Ten X Habitat launched in Thane in 2019 is ~ 96% sold by the end of FY 2024-25. TenX Habitat have also set a new benchmark in the real estate sector by delivering its first 3 towers, 2 years ahead of RERA timeline. To further cater to the demand for 2 BHKs and compact 3 BHKs, the Company launched ‘Ten X Era in Thane in February 2023 and successfully sold ~ 70% of the total inventory by the end of FY2024-25.

Premium projects - ‘Address by GS Season 1 launched in FY2022 is ~ 97% sold and ‘Address by GS Season 2 launched in FY 2023 is ~ 75% sold by the end of FY 2024-25.

To cater to luxury real estate demand, the Company launched ‘Invictus by GS in August 2023, which is ~ 72% sold by the end of FY2024-25.

Ten X Vibes Convenience Retail shops launched in Q4 FY

2024 within the Ten X project is ~ 93% sold by the end of FY2024-25.

In Q2 FY2025, the Company launched Park Avenue High Street Retail shops and sold ~ 58% of the units by the end of FY2024-25.

outside thane Market:

We launched our first JDA project in Bandra, Mumbai in March 2024 and received an overwhelming response with ~ 57% of the launched inventory sold by the end of FY 2024-25.

vi. corporate restructuring anD DeMergers

A significant highlight of FY 2024-25 was the continued execution of Raymonds strategic demerger plan, aimed at unlocking value and enhancing focus for each of its core businesses.

Raymond Lifestyle Limited (RLL): The lifestyle business was successfully demerged and listed as Raymond Lifestyle Limited (RLL). This strategic move aims to create a more agile and focused entity for its branded textiles, branded apparel, garmenting, and high-value cotton shirting segments.

Raymond Realty Limited (RRL): The vertical demerger of the real estate business into Raymond Realty Limited (RRL), a wholly-owned subsidiary, was a key development, with the NCLT approval received in March 27, 2025. This demerger, with a record date of May 14, 2025, will result in Raymond Realty being listed as a separate entity on BSE Limited and National Stock Exchange of India Limited in the upcoming fiscal year. This is expected to provide greater operational flexibility and attract specialized real estate investors.

vii. financial perforMance highlights

(Consolidated and segmental) a. o verview

The financial year 2024-25 (FY 2025) was a transformative period for Raymond Limited, marked significant strategic restructuring and a sharp re- by focus of its business operations. The most impactful event was the demerger of its lifestyle business undertaking into Raymond Lifestyle Limited, effective June 30, 2024 (with an appointed date of April 1, 2023). This move aimed to create distinct and focused entities, with Raymond Limited now primarily concentrating on its Engineering (Tools & Hardware, Auto Components, Precision) and Real Estate development businesses, in addition to non-scheduled airline operations.

Furthermore, the Real Estate business undertaking itself was slated for demerger into Raymond

Realty Limited, effective April 30, 2025 (with an appointed date of April 1, 2025). These demergers have significantly altered the financial structure and operational profile of Raymond Limited, necessitating a careful analysis of both continuing and discontinued operations to understand the full picture of the years performance. The financial results for FY 2025 reflect these strategic shifts and the underlying performance of the re-aligned business segments.

B. FinanCial PerFormanCe review - consoliDateD

Continuing Operations: "Revenue from operations" for continuing businesses (post-demerger) significantly increased to

1,946.84 Crore in FY 2025 from Rs. 972.57 Crore in FY 2024. This growth reflects the expansion and consolidation of the

Engineering businesses, particularly the inclusion of Maini Precision Products Limited (MPPL) whose control was acquired effectively from March 28, 2024. "Profit from continuing operations before tax" was

78.34 Crore in FY 2025, comparable to Rs. 78.75 Crore in FY 2024. This indicates stable underlying profitability for the core businesses that remain with Raymond Limited.

Discontinued Operations: The "Profit from discontinued operations (after tax)" was an extraordinary Rs. 7,583.60 Crore in FY 2025, a massive leap from Rs. 1,588.80 Crore in FY24. This is primarily due to the gain on demerger of the lifestyle business amounting to Rs. 7,337.84 Crore, recognized as an exceptional item in FY 2025 (Refer Note No.44(a) in Notes to the Accounts). In FY 2024, discontinued operations also included a significant profit contribution from the erstwhile Demerged Lifestyle Business and Demerged Realty Business.

Earnings Per Share (EPS): Consolidated Basic and Diluted EPS from continuing and discontinued operationssurgedto 1,147 and Rs. 1,146 respectively in FY 2025, compared to Rs. 246 in FY 2024. This dramatic increase is a direct consequence of the large one-time demerger gain. Basic EPS from continuing operations remained relatively stable at

7 in FY 2025 compared to Rs. 7 in FY 2024.

C. segmental analysis (Post-demerger FoCus)

Post-demerger, Raymond Limiteds continuing operations are primarily segmented into Tools & Hardware, Auto Components, Precision, and Others (including non-scheduled airline operations).

Revenue from continuing operations grew from Rs. 972.57 Crore in FY 2024 to Rs. 1,946.84 Crore in FY 2025, largely driven by the inclusion of the Precision business (Maini Precision Products Limited) acquired in FY24.

Geographically, revenue from India increased to Rs. 878.47 Crore from Rs. 548.70 Crore, and from the Rest of the World to Rs. 1,068.37

Crore from Rs. 423.87 Crore, indicating a strong international presence in the new core businesses.

Capital expenditure for continuing operations was Rs. 97.70 Crore in FY 2025.

viii. key ratios anD perforMance inDicators

(standalone) al ratios: financi nalyzingthestandalone

Current Ratio: Increased significantly to 14.29 times in FY 2025 from 1.76 times in FY 2024. This indicates a much stronger short-term liquidity position, likely due to the restructuring of assets and liabilities post-demerger.

Debt-Equity Ratio: Dramatically reduced to 0 in FY 2025 from 0.92 times in FY 2024. This reflects a significant deleveraging of Raymond Limiteds balance sheet, as a substantial portion of debt was transferred with the demerged businesses.

Debt Service Coverage Ratio: Improved considerably to 39.29 times in FY 2025 from 1.68 times in FY 2024, indicating enhanced ability to cover debt obligations.

Return on Equity Ratio: Decreased to 1.17% in FY 2025 from 18.69% in FY 2024. This is primarily due to the decline in net worth due to demerger.

Net Profit Ratio: Showed a remarkable increase to 589.76% in FY 2025 from 7.99% in FY 2024. This disproportionate increase is largely an effect of the massive exceptional gain from the demerger in the numerator (Profit for the year) compared to the relatively small revenue from continuing operations.

Return on Capital Employed: Decreased to 1.49% in FY 2025 from 21.68% in FY 2024.

Inventory turnover ratio, Trade receivables turnover ratio, and Net capital turnover ratio: These ratios are not directly comparable due to the demerger schemes.

i X. risks anD opportunities risks:

Real Estate Market Dynamics: While currently robust, the real estate market can be cyclical, influencedby economic conditions, interest rates, and regulatory changes.

Cybersecurity Risks: The ransomware attack experienced by the Company in FY 2025 highlights the increasing cyber risks faced by businesses.

Integration Challenges: Successful integration of acquired entities like MPPL and managing the complexities of multiple demerged entities.

Global Supply Chain Disruptions: Geopolitical events and trade tensions can impact the sourcing of raw materials and finished goods.

opportunities:

Value Unlocking through Demergers: The completion of the demergers is expected to unlock significant shareholder value by creating focused entities with distinct growth strategies and investor bases.

Strong Brand Equity: Raymonds enduring brand legacy continues to be a key asset across its businesses.

Growth in Indian Market: Indias growing economy and rising disposable incomes present substantial opportunities for both lifestyle and real estate businesses.

Asset-Light Real Estate Model: The JDA model in real estate offers a scalable and capital-efficient approach to expand in high-potential urban markets.

Diversification into Engineering: The enhanced engineering segment provides higher-growth, specialized manufacturing and sunrising aerospace and defence sector.

Sustainability Initiatives: Raymonds commitment to climate-related disclosures (aligned with IFRS S2) and sustainable practices can enhance its reputation and appeal to environmentally conscious consumers and investors.

X. future outlook

FY 2024-25 was a transformative year for Raymond Limited, marked by strategic demergers designed to unlock significant value entities.

Raymond Lifestyle Limited: Despite a challenging FY 2025, Raymond Lifestyle expects a revenue growth of 10-15% in FY 2026, driven by an anticipated recovery in demand, dealer restocking, and easing inflation. Profitability is also set to recover as scale improves and store performance stabilizes. Management targets steady-state margins of 20-22% for branded textiles and 14-15% for the overall lifestyle business.

Raymond Realty Limited: The real estate business is poised for robust growth, targeting to nearly double its topline to Rs. 4,000 crore over the next five years, with an aim for Rs. 500 crore in annual pre-sales within two years, leveraging its Thane land bank and the new JDA projects in MMR.

Raymond Limited (remaining entity): The core Raymond Limited entity, now primarily focused on the engineering business, along with other residual assets, is expected to benefit from the MPPL acquisition and continued demand in its specialized segments.

Overall, Raymond Limited is navigating a period of strategic transformation. While the short-term financial reporting for the consolidated entity reflects for each independently listed business appears promising, driven by distinct growth strategies, market opportunities, and a commitment to operational efficiency. The companys enhanced focus on ESG factors, as evidenced by its IFRS S2 climate-related disclosures, further underscores its commitment to sustainable value creation.

Xi. internal control systeMs anD their aDequacy

The Company maintains robust internal control systems commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial information. During FY 2025, the Company identified a ransomware infection which was promptly addressed with the help of external experts, and the accuracyandcompletenessof not affected. The Company continues to strengthen its cybersecurity infrastructure. While the audit trail feature was enabled at the application level, it was not enabled at the database level for certain accounting software, which the Company is addressing.

Xii. huMan resources

The Company recognizes its human capital as a critical asset. Employee benefits expenses were higher in FY

2025, reflecting commitments towards its workforce. The

Company continues to invest in employee development and welfare to ensure a skilled and motivated team.

Xiii. Forward-looking statements:

This MDA contains forward-looking statements based on managements current expectations and beliefs. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors include, but are not limited to, economic conditions, consumer sentiment, market competition, regulatory changes, successful integration of acquisitions, and the effective execution of demerger plans.