Nonetheless, what adopted was removed from splendid. In FY25, income fell 5% to ₹6,360 crore resulting from weak shopper demand, whereas margins contracted by 610 foundation factors to 10.2%. Internet revenue declined much more sharply, crashing 80% to ₹100 crore. Consequently, the inventory worth slumped almost 70% by April, hitting a low of ₹911.
Since then, nonetheless, the inventory has proven indicators of restoration, rallying over 40% to ₹1,284. So is the worst over, and are issues lastly turning round?
Let’s let a more in-depth look.
A legacy model constructed on weddings and formalwear
Raymond Way of life wants no introduction. It’s India’s largest males’s marriage ceremony and formal put on firm. It has a robust portfolio that features Raymond, Park Avenue, ColorPlus, Parx and Ethnix by Raymond. The corporate operates throughout 4 enterprise segments: branded textiles, branded attire, garmenting, and high-value shirting.
In FY25, the branded textile section remained the most important contributor to each income and revenue. It generated ₹3,002 crore in income, contributing 47%, and ₹420 crore in Ebitda, or 64.5% of the overall.
This was adopted by branded attire, with ₹1,593 crore in income (25% of the overall), and ₹118 crore in Ebitda (18%). The garmenting enterprise contributed one other ₹1,068 crores in income (17%) and ₹50 crore in Ebitda (7.6%). Excessive-value shirting accounted for 12.6% ( ₹800 crore) of the highest line and ₹114 crore of Ebitda (17.5%).
The corporate’s strategic strategy is to strengthen the core (branded textiles), speed up development (branded attire and garmenting), and create new classes (ethnic put on, innerwear, and sleepwear).
Textiles hit by demand weak point & ransomware
Branded textiles, which incorporates worsted suiting and shirting materials, recorded a 13% drop in income to ₹3,002 crore in FY25. This was primarily proudly owning to weak discretionary demand, an industry-wide pattern all year long.
A ransomware assault on 19 February disrupted operations for about 25 days, additional hampering the section’s efficiency. This disruption is estimated to have resulted in a income lack of ₹150-175 crore in This fall FY25.
Consequently, Ebitda margins for the section dropped sharply to 14% in FY25 from 20.9% the earlier yr, whereas Ebitda fell 42% to ₹420 crore from ₹721 crore in FY24. That stated, early indicators of a restoration are seen.
The corporate is seeing a 12-13% uptick in reserving traits and has secured wholesome orders for its autumn-winter 2025 assortment. Administration expects this momentum to translate to greater than 10-15% income development in FY26, together with margin restoration.
Discretionary spending can be more likely to improve because of revenue tax cuts and decrease inflation, thereby supporting the restoration.
Retailer growth and decrease demand impacted branded attire
The branded attire section reported flat income of ₹1,593 crore in FY25. Weak demand for weddings and fewer auspicious dates weighed on foot visitors, impacting efficiency. Nonetheless, Ebitda margins declined to 7.4% from 11.9% resulting from continued investments in retail growth and an unfavourable channel combine.
The corporate added 170 new shops through the yr, taking its complete to 1,688 shops as of March 2025. These embody 1,098 The Raymond Store (TRS) shops (up from 1,065 in FY24), 537 unique model shops (vs 409), and 53 Made to Measure (MTM) shops (up from 44).
New class for ‘full man’ positioning
Ethnix, the brand new ethnic put on model by Raymond, has crossed ₹100 crore in income. On the finish of FY25, its retailer rely stood at 152, with 38 added through the yr.
The addition of shops shall be modest in FY26, as the corporate’s precedence shall be stabilising and enhancing the efficiency of the prevailing community. It additionally plans to concentrate on brand-building, strengthening its distribution community, and launching extra merchandise.
Encouragingly, secondary gross sales for branded attire have seen sturdy traction in March, April and Might, signaling a return in shopper demand. That is anticipated to translate into restocking and improved throughput on the retailer stage.
In FY25, Raymond entered new classes to increase its product suite for the ‘The Full Man’. These embody sleepwear below the model SleepZ by Raymond and innerwear below Park Avenue Innerwear. The corporate additionally launched an informal put on section, which holds large development potential.
Garmenting sees shopper additions, however profitability below strain
Raymond’s garmenting enterprise, which primarily caters to B2B exports, posted a 3% improve in income to ₹1,068 crore in FY25. In the course of the yr, the corporate added over 20 new shoppers throughout key worldwide markets, together with the US, the UK and Europe.
Nonetheless, the section’s efficiency was weighed down by international uncertainties as prospects adopted a cautious stance and renegotiated pricing agreements. As well as, elevated coaching prices for brand spanking new product traces additional impacted profitability. Consequently, margins halved to 4.7%, whereas Ebitda fell sharply by 52% to ₹50 crore.
That stated, Raymond Way of life is scaling up its garmenting capability and is well-placed to learn from the continuing China Plus One and Bangladesh Plus One sourcing shifts. The current free commerce settlement (FTA) with the UK additionally presents a robust development alternative. The UK at the moment accounts for round 20-22% of its garmenting income, and administration expects this to develop by 30-40% over the following two years.
Raymond can be positioning itself as a aggressive international provider of formal put on and goals to develop into one of many world’s largest go well with makers. The corporate additionally highlighted its vertically built-in provide chain (from cloth to completed garment) as a aggressive benefit, serving to it provides higher pricing and sooner turnarounds within the export market.
Shirting margin boosted by one-time subsidy
Income from this section was additionally impacted by weak shopper demand, falling 4% to ₹800 crore, whereas Ebitda grew 21% to ₹114 crore. This was led by a 300 bps enchancment in margins to 14.3%, aided by a one-time authorities subsidy of ₹53 crore, booked in Q4FY25.
FY25 was powerful, however FY26 seems like a reset yr
On a consolidated foundation, Raymond Way of life reported a 5% decline in income to ₹6,360 crore in FY25. Ebitda fell 40% year-on-year to ₹651 crore, with margins contracting 610 bps to 16.3%.
Weaker working leverage, provide chain disruptions, upfront investments in retail growth, and subdued discretionary demand drove the decline. Consequently, internet revenue dropped sharply by 80% to ₹100 crore.
That stated, the corporate ended the yr with a net-debt-free steadiness sheet and ₹90 crore in money reserves. Administration expects FY26 to be a restoration yr, supported by enhancing traits in textiles and attire bookings.
The corporate has guided for income development of 10-15% in FY26, with the opportunity of outperforming if the demand surroundings strengthens. Profitability can be anticipated to get better according to gross sales momentum.
Inventory trades at a reduction
Owing to its current underperformance, the corporate’s inventory trades at a price-to-sales a number of of simply 1.3, considerably decrease than that of its listed friends Aditya Birla Trend (2.5), Kewal Kiran (4.3), Cantabil (3.2), and Vedant Fashions (14.5).
Additionally it is buying and selling beneath its e book worth of ₹1,574, providing a margin of security. This valuation hole means that any significant restoration in financials may set off a re-rating.
Governance considerations linger
That stated, the corporate has additionally skilled administration attrition, with a number of key personnel resigning over the previous six months, elevating governance considerations amongst traders.
With early indicators of a segmental restoration, a internet money place, and an aggressive however calibrated retailer growth technique, the query now’s whether or not Raymond Way of life can sew collectively a sustainable turnaround in FY26 and past.
For extra such analyses, learn Revenue Pulse.
Madhvendra has over seven years of expertise in fairness markets and has cleared the NISM-Collection-XV: Analysis Analyst Certification Examination. He makes a speciality of writing detailed analysis articles on listed Indian corporations, sectoral traits, and macroeconomic developments.
Disclosure: The author does maintain the shares mentioned on this article.
The aim of this text is just to share fascinating charts, knowledge factors, and thought-provoking opinions. It’s NOT a advice. Should you want to take into account an funding, we strongly advise you to seek the advice of your monetary advisor. This text is strictly for academic functions solely.
