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Target: ₹3,200
CMP: ₹2,421.45
Raymond Lifestyle Ltd (RLL), formed as a demerger from Raymond Ltd, has a strong presence in men’s wear (with about 65 per cent share in worsted suiting). RLL’s portfolio includes branded textiles (B2B and B2C) and several apparel brands (such as Park Avenue, ColorPlus, Ethnix by Raymond) that cater to formal, casual and ethnic wear. With a strong brand affinity and wide distribution network, RLL has about 5 per cent share in men’s wedding wear industry.
We anticipate RLL’s growth will be driven by: fast paced growth in branded apparels through retail expansion (target to double EBOs); capitalising on opportunities from Bangladesh +1 and China +1 trends in B2B garmenting; launch of new categories such as innerwear and sleepwear; increasing focus on casualisation and premiumisation of portfolio; and achieving sourcing efficiencies through scale, which could enhance operating leverage.
Although the valuation of the Raymond’s Lifestyle business has almost doubled since the demerger, the stock is currently trading at a relatively lower P/E and an EV/EBITDA (pre-Ind-AS-116) of 25x and 16x on FY26E, respectively. The valuation is significantly lower than that of our Coverage Universe and other retail and discretionary companies.
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