Raymond CFO Foresees Real Estate, Engineering Divisions To Contribute 45% To Revenues By FY29

Raymond Ltd. is aiming for a more significant contribution from its real estate and engineering divisions in its financial structure. The company expects the real estate and engineering division to contribute up to 45% to the group's revenues over the next four-to-five years, according to Chief Financial Officer Amit Agarwal.

The company's strategic plans align with the company's focus on the lucrative real estate sector. Projects in Thane and Mumbai hold substantial revenue potential.

In the fiscal year ending March 2023, real estate contributed 13% to revenues, rising to 17% in the subsequent fiscal year. Conversely, the textile business saw a decline from 77% to 74%, while the engineering business maintained a steady share of 9–10%.

Raymond owns a 100-acre plot in Thane, with roughly 4.5 million square feet already sold, generating approximately Rs 9,000 crore. An additional Rs 25,000 crore is expected from the remaining 60 acres over seven-to-eight years, with plans for projects in Bandra, Mahim, and Sion.

Over the next three to four years, 40–45% of real estate revenue will derive from joint development agreements, and 50–55% from the Thane project. Agarwal anticipates JDAs to yield Rs 8,000–10,000 crore by March 2024. The company expects real estate to contribute 25-30% to the group's revenue.

The engineering segment is set for growth, especially post the acquisition of Maini Precision and Agarwal projects, aiming to contribute 12–15% to the group's revenue, a substantial increase from its current share. Despite global market challenges, resilient domestic demand buoyed the segment.

Regarding the Lifestyle Business, Raymond plans to expand its branded apparel stores, with over 500 stores expected in the next three years. Agarwal forecasts mid-teens growth in revenue and high-teens growth in the operating income over the next three-to-four years.

Raymond's shares ended 1% lower at Rs 2,528.90 apiece, compared to a little change in the country's benchmark NSE Nifty 50. The stock has advanced by 55% in the past 12 months.

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