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Raymond expands real estate business and focuses on apparel
Real Estate

Raymond expands real estate business and focuses on apparel

Raymond is set to expand its real estate business by forming joint development agreements with other landowners and engaging in joint venture projects. Additionally, the company plans to monetise its substantial 60-acre land bank in Thane, Mumbai.

Following the sale of its FMCG business to Godrej Consumer Products in May, the Raymond Group will focus on real estate through Raymond and the branded apparel business under Raymond Consumer Care, which is scheduled for listing.

In the company's F23 annual report, Gautam Singhania, Chairman and Managing Director, stated that Raymond Realty will be a core business going forward, actively pursuing new projects and JDAs in the Mumbai Metropolitan Region (MMR) due to its significant growth potential.

Currently, the company has launched three projects in Thane, with reported bookings of Rs 16 billion from these ventures last year. Two projects have already sold 80 per cent of their inventory, while the recently launched third project has sold a quarter of its inventory. The company foresees a total revenue potential of Rs 14 billion from this third project.

Raymond Ltd recorded a revenue of Rs 83.37 billion, with the realty business contributing Rs 11.15 billion, a notable 58 per cent increase from the previous year. The realty segment also achieved an impressive EBITDA margin of 25.7 per cent in FY23. The company intends to expand its real estate operations beyond Thane in the MMR region.

Godrej Properties, Macrotech Developers, Mahindra Lifespaces, Birla Estates, and L&T Realty currently dominate the MMR real estate market, with recent entrants seeking to establish their presence in the sector.

The branded textile, apparel, garments, and high-value cotton shirting business constitute the majority of Raymond Group's revenue, accounting for 77 per cent of the total. Notably, the company has been rapidly scaling up in the ethnic wear segment with its new addition, 'ethnix,' alongside existing brands such as 'Raymond Fine Fabrics,' 'Raymond Ready to Wear,' 'Park Avenue,' 'Color Plus,' and 'Parx.'

After divesting its FMCG business, Raymond Ltd anticipates becoming debt-free, with a surplus of Rs 15 billion available for growth capital. The company is currently devising its capital allocation strategy.

Over the next 12-18 months, the group plans to open approximately 200 retail stores, with 100 dedicated to the ethnic wear brand and the remainder allocated to other apparel businesses. The majority of store additions will be carried out through the franchise model, although the company also intends to open flagship stores in prominent locations.

Raymond Ltd's shares have nearly doubled over a 52-week period, and the company has experienced over six-fold appreciation in value over the past decade.

Raymond is set to expand its real estate business by forming joint development agreements with other landowners and engaging in joint venture projects. Additionally, the company plans to monetise its substantial 60-acre land bank in Thane, Mumbai.Following the sale of its FMCG business to Godrej Consumer Products in May, the Raymond Group will focus on real estate through Raymond and the branded apparel business under Raymond Consumer Care, which is scheduled for listing.In the company's F23 annual report, Gautam Singhania, Chairman and Managing Director, stated that Raymond Realty will be a core business going forward, actively pursuing new projects and JDAs in the Mumbai Metropolitan Region (MMR) due to its significant growth potential.Currently, the company has launched three projects in Thane, with reported bookings of Rs 16 billion from these ventures last year. Two projects have already sold 80 per cent of their inventory, while the recently launched third project has sold a quarter of its inventory. The company foresees a total revenue potential of Rs 14 billion from this third project.Raymond Ltd recorded a revenue of Rs 83.37 billion, with the realty business contributing Rs 11.15 billion, a notable 58 per cent increase from the previous year. The realty segment also achieved an impressive EBITDA margin of 25.7 per cent in FY23. The company intends to expand its real estate operations beyond Thane in the MMR region.Godrej Properties, Macrotech Developers, Mahindra Lifespaces, Birla Estates, and L&T Realty currently dominate the MMR real estate market, with recent entrants seeking to establish their presence in the sector.The branded textile, apparel, garments, and high-value cotton shirting business constitute the majority of Raymond Group's revenue, accounting for 77 per cent of the total. Notably, the company has been rapidly scaling up in the ethnic wear segment with its new addition, 'ethnix,' alongside existing brands such as 'Raymond Fine Fabrics,' 'Raymond Ready to Wear,' 'Park Avenue,' 'Color Plus,' and 'Parx.'After divesting its FMCG business, Raymond Ltd anticipates becoming debt-free, with a surplus of Rs 15 billion available for growth capital. The company is currently devising its capital allocation strategy.Over the next 12-18 months, the group plans to open approximately 200 retail stores, with 100 dedicated to the ethnic wear brand and the remainder allocated to other apparel businesses. The majority of store additions will be carried out through the franchise model, although the company also intends to open flagship stores in prominent locations.Raymond Ltd's shares have nearly doubled over a 52-week period, and the company has experienced over six-fold appreciation in value over the past decade.

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