Raymond Lifestyle - On A Transformative Journey: Motilal Oswal

Motilal Oswal Report

Raymond Ltd. has been demonstrating positive actions in the form of selling the FMCG business, de-merging the lifestyle business, shaping the real estate business and demerging it, and establishing an engineering unit after the Maini Precision acquisition.

These three vectors may create shareholder value for each of the businesses led by professional management, net cash, and optimisation of costs and working capital.

We estimate 6% revenue/Ebitda growth for FY24-26, led by branded apparel and garmenting segments and cashflow supported by branded textiles. FY24 return on equity/return on capital employed figures stood at 10/32%, as per the company.

We ascribe enterprise value/Ebitda of 15 times on FY26 (implied PE of 28 times) to arrive at a valuation of Rs 159 billion (per share price of Rs 2,610).

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