Raymond Ltd. has undertaken cost reduction and resource mobilisation initiatives to become net debt-free by 2025.
The net debt of the lifestyle to realty company stood at ₹1,088 crore as of March 2022, down from ₹1,416 crore as of March 2021 and ₹1,859 crore as of March 2020.
“Net debt reduction was driven by focussed working capital management and cost rationalisation. The board has set a target of growing the group revenue exponentially by the time we compete a century of operations in 2025. The lifestyle and realty business will drive growth,” Amit Agarwal, Group Chief Financial Officer, Raymond Group said in an interview.
An application had been filed with SEBI for an IPO of the engineering business called JK Files & Engineering Ltd. The IPO comprises an Offer for Sale of about ₹800 crore which would be used to further reduce debt of the parent. The engineering business segment had revenues of ₹812 crore in FY22 with EBITDA of ₹123 crore (15.1% margin).
For FY22, the 98-year-old company reported a consolidated revenue from operations of ₹6,179 crore and EBITDA of ₹881 crore (up 13.9%).
Mr. Agarwal, who joined Raymond in July 2020 from Jet Airways is spearheading the performance improvement strategy at the group, which also includes making the group debt-free.
He said Raymond group had created way-forward strategies for its business verticals — the flagship Raymond Lifestyle (suiting, shirtings, fabrics, apparel, garments exports and garmenting); Raymond Realty, JK Files & Engineering (which includes the steel files, tools, hardware and auto components businesses) and education.
The group has appointed industry veterans like former PepsiCo India head Rajiv Bakshi to head its consumer vertical, and Ravi Uppal, the former ABB group & Volvo India top executive, to lead the engineering business.
Brokerage house Arihant Capital has projected in a report that Raymond Ltd.’s revenues would surpass the ₹10,000-crore-mark by 2025.
Analysts from brokerages expect while Raymond Lifestyle would clock ₹9,000-10,000 crore in revenue; the contribution from realty business will be more than ₹3,500 crore and the IPO-bound JK Files & Engineering is expected to nearly double the topline to ₹1,500-1,600 crore.
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