Raymond Group to expand realty business through joint developments, JVs

June 19, 2023

Raymond Ltd is planning to expand its real estate business through joint development agreements with other landowners and joint venture projects while it will also be monetising the over 60-acre land bank that it holds in Thane in Mumbai.

After selling its FMCG business to Godrej Consumer Products in May the Raymond Group plans to focus on real estate under Raymond Ltd and the branded apparel business under Raymond Consumer Care, which will soon be listed.

“Going forward we envisage Raymond Realty as a core business which will continue and take on new projects and JDAs in the MMR (Mumbai Metropolitan Region) that has enormous growth potential,” Chairman and Managing Director Gautam Singhania said in the company’s F23 annual report.

The company has launched three projects so far, all in Thane, and last year it reported bookings of ₹1,600 crore from the projects. In two projects 80 per cent of the inventory has been sold; in the recently launched third project, a quarter of the inventory has been sold and the company sees a total revenue potential of ₹1,400 crore.

Of the total revenue of the company of 8,337 crore, the realty business contributed Rs 1115 crore, a rise of 58 per cent on the year and an EBITDA margin of 25.7 per cent. The company intends to expand beyond Thane in the MMR region.

The MMR region is currently dominated by Godrej Properties, Macrotech Developers, and Mahindra Lifespaces. Birla Estates, L&T Realty have recently made their forays into the sector.

The branded textile, branded apparel, garments and high value cotton shirting business that constitutes the lion’s share of Raymond group’s revenue at 77 percent is also rapidly scaling up, especially with its entry into ethnic’s wear.

The branded textile segment has ‘Raymond Fine Fabrics’ and ‘Raymond Ready to Wear’, while in apparel, it sells brands such as ‘Park Avenue’, ‘Color Plus, ‘Parx’ and now the newly introduced ‘ethnix’.

After selling its FMCG business, the company expects to be debt-free with ₹1,500 crore surplus available for growth capital. The company is still working on the capital allocation  strategy.

The group intends to add about 200 retail stores over the next 12-18 months, of which 100 would be for the ethnics’ brand and the remaining for the other apparel business. Store additions will be mainly through the franchise model, though it will also open some flagship stores in some prominent locations.

Raymond Ltd.’s shares have nearly doubled over 52 weeks; over a decade, it has appreciated just over six times.

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