30-Oct-2026 12:33:30
RAYMOND LIFESTYLE Q2 FY27 CONCALL: RETAINS DOUBLE-DIGIT REVENUE GROWTH GUIDANCE; TARGETS MID-DOUBLE-DIGIT EBITDA GROWTH, ₹300 CR+ NET CASH & STRONG H2 RECOVERY
• FY27 Revenue Guidance: Management reiterated its double-digit revenue growth outlook, supported by festive and wedding demand, premiumization and garmenting exports. • FY27 EBITDA Guidance: Management maintained its mid-double-digit EBITDA growth expectation, supported by higher H2 volumes, price increases and cost-saving initiatives. • FY27 PBT Outlook: Management expects double-digit PBT growth, with full-year PBT potentially reaching approximately ₹220–225 Cr. • FY27 Cash Guidance: Management expects to end FY27 with over ₹300 Cr in net cash, compared with ₹69 Cr at the end of September 2026. • H2 FY27 Outlook: Management expects H2 revenue growth to exceed H1 growth of 10%, supported by the delayed festive season and stronger wedding demand. • EBITDA Margin Recovery: Management expects H2 EBITDA margins to potentially exceed Q2's 12.7%, supported by operating leverage and price pass-through. • Branded Apparel Margin Target: Management expects branded apparel EBITDA margins to return to double-digit levels over the next couple of years, compared with 8.8% in Q2 FY27. • FY27 Capex Guidance: Company plans approximately ₹200 Cr of capital expenditure, including around ₹70 Cr for the Hindupur garmenting expansion. • Retail Store Expansion: Management expects to end FY27 with approximately 1,665–1,670 stores, compared with 1,634 at the end of Q2. H2 net additions are expected at around 35–36 stores. • Hindupur Expansion: Company is expanding its garmenting facility from the initially planned 3 production lines to 10 lines, supported by increasing export opportunities. • Garmenting Capacity Outlook: Management expects peak garmenting capacity to reach approximately 10 million units, providing room for growth over the next two years. • Hindupur Commissioning Timeline: Three lines are already operational, with the fourth expected to begin operations by November–December 2026. All 10 lines are expected to become operational over approximately 18–21 months. • Garmenting Order Book: Management indicated that factories are largely booked through January and part of February 2027, with fresh orders being accepted for late February. • Europe Export Opportunity: Management expects additional export opportunities following implementation of the proposed India-EU trade agreement. European garmenting business grew approximately 30% YoY in H1 and 50% in Q2. • UK Export Momentum: Management highlighted improving demand from the UK market and expects geographical diversification to support garmenting growth. • Branded Textiles: Q2 revenue increased 7% YoY to ₹971 Cr, supported by premiumization, higher volumes and strong wedding-season bookings. EBITDA margin stood at 19.3%. • Branded Apparel: Revenue increased 20% YoY to a record ₹559 Cr, while EBITDA increased 20% YoY to ₹49 Cr, with an 8.8% margin. • ColorPlus Growth: Management indicated approximately 26% growth in ColorPlus during Q2, supported by stronger casualwear demand, product launches and retail execution. • Festive Demand: Management reported approximately 14% like-for-like growth during the Dussehra comparison period and around 23% growth in the Diwali-related comparison period at the time of the call. • Garmenting Business: Revenue increased 26% YoY to ₹339 Cr, while EBITDA surged 75% YoY to ₹25 Cr. EBITDA margin improved to 7.4%. • High-Value Shirting: Management expects better margins in H2 as cotton and flax input costs stabilize, cost-saving measures take effect and higher-priced orders are executed. • Emerging Businesses: Revenue increased 15% YoY to approximately ₹100 Cr, although the segment reported an EBITDA loss of ₹23 Cr due to continued investments in developing brands. • Raymond Home Breakeven: Management expects the Home business to achieve breakeven or better by the end of FY27, supported by premium product launches and sales growth. • Innerwear Breakeven: The ongoing innerwear business is operating around breakeven, but residual losses from the discontinued sleepwear category could delay overall breakeven until FY28. • Ethnix Breakeven Guidance: Management expects Ethnix to achieve breakeven and profitability over the next 18–24 months, supported by store rationalization and an asset-light operating model. • Marketing Investments: Brand expenditure increased to approximately ₹116 Cr from ₹98 Cr YoY, representing 7.2% of B2C sales versus 6.8% previously. Management plans to continue investing in brand development. • Working Capital Guidance: Management expects the working capital cycle to decline from 82 days in September 2026 to potentially around 60 days by FY27-end, supported by stronger H2 sales and collections. • Q2 Financial Performance: Revenue from operations increased 13% YoY to ₹2,075 Cr, while total income increased 14% YoY to ₹2,125 Cr. • Q2 EBITDA: EBITDA increased 4% YoY to ₹270 Cr, with the reported EBITDA margin at 12.7%, down approximately 120 bps YoY. • Q2 Profitability: PBT before exceptional items stood at ₹91 Cr, while the company reported a net cash surplus of ₹69 Cr at the end of September 2026.
RAYMOND LIFESTYLE LIMITED