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8/4/2019 Case Asssignmnent RAYMond
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DEFTONES
RAYMONDS LIMITED
Case
SUBMITTED BY
RUCHIKA MOHANTY
ENROLLMENT NO- 10BSP1146
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RAYMOND LIMITED
Website:www.raymondindia.com
Tagline :The complete man since 1925
History
Incorporated in 1925, Raymond Limited has five divisions comprising of Textiles, Denim,
Engineering Files & Tools, Aviation and Designer Wear. Raymond Textile is India's leading
producer of worsted suiting fabric with over 60% marketshare. With a capacity of 25 million
meters of wool & wool-blended fabrics, Raymond Textilesis the worlds third largest integrated
manufacturer. The company exports its suiting to more than50 countries including USA, Canada,
Europe, Japan and the Middle East. Over the years,aymond Textile has developed strong in
house skills for research & development, which hasresulted in path-breaking new products.
Perceived as pioneer and innovator, Raymond Textilehas been responsible for raising the
standard of the Indian textiles industry. Garment companies have been successful in the Indian
market using different approaches and distribution methods. Raymond, with its history of more
than 75 years, relies on its long-standing reputation; loyal customer base and well-established,
extensive retails network in over 400 towns through 30,000 retailers and over 270 exclusive
Raymond Shops. Sometime in the 1960.s one ofRaymonds regular textile importers in Sweden
made the observation that the cost of manufacturing readymade garments was becoming
increasingly prohibitive in his country. Thiswas true for the rest of Europe as well. Raymond was
quick to seize this opportunity. Assessing the viability and future scope of garment exports,
Raymond set up a readymade garment plant at Thane (Mumbai) in1968 whilethe machinery and
equipment arrived from Italy, Sweden, Germany and the U.S., the know-howcame from
Scandinavia. Swedish experts trained a team of technicians at Raymond in every areaof the
garment business contribution in making these utilitarian items
.
RAYMOND IN BRIEF
Chairman and Managing Director Mr.Gautam Singhania
R 1925Headquarter Mumbai, India
Industry Textiles
Products Fabrics, Designer Wear, Cosmetics,
Engineering files & tools, Aviation Servivces.
Industry Textiles
Net Earning Rs.2100
http://www.raymondindia.com/http://www.raymondindia.com/http://www.raymondindia.com/http://www.raymondindia.com/8/4/2019 Case Asssignmnent RAYMond
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Internal Issuues
BUSINESS ISSUES ARISED ACTION TAKEN PRESENT STATUS
ERP
IMPLEMENTATION
Teething issues in SAP
implementationresulting in lost sales
and cost increase
Resolved FY 08 The ERP package isfunctioning very welland has led to better
inventory management
and lower lead time.
DENIM Denim JV ran up lossesto the tune of USD
26mn in FY08 & USD
35 mn in FY09,excluding exceptional
exceptional writedowns.
USA and Belgium
operations which
accounted for nearly
80% of the losses wereshutdown in Dec 2008.
JV operates from low
cost operations in India
and Romania which are
together EBITDApositive in Q1 & Q2
FY10
GAS Losses to the tune of
USD 11 mn in FY09
Discontinued the
JVwith the Raymondgroup taking over. All
GAS outlets closed
GAS is now a wholly
owned subsidiary ofRaymond ltd.with no
loss in H1 FY10
WOOLLENOUTERWEAR
BUSINESS
Erstwhile JV facedproblems consequent to
partners lack of focus.
Took over the companyand all day to day
operations from the
partner
The company has beenconsistently EBITDA
positive ever since
.
Vision Statement:
RAYMOND the most desired Workplace for top talent.
Mission Statement:
"We will strive to weave in the core Raymond values namely Quality, Trust, Leadership, and
Excellence in all our actions & HR Processes so as to make every Raymondite a complete
man.MA
VALUES:
TRUST
QUALITY
LEADERSHIP
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EXCELLENCE
Organization Structure:
kshay Chudasama Independent Director
Aniruddha Deshmukh President - Textiles & FMCG
Boman Irani Independent Director
Gautam Hari Singhania CEO
Gautam Hari Singhania Chairman and Managing director
H Sunder President - Finance & Chief Financial Officer
H Sunder Addl. Director & WTD
Harshal Jayavant President - Engineering Business
I D Agarwal Director
K A Narayan President - HR
Nabankur Gupta Director
P K Bhandari Director
Pradeep Guha Director
Rakesh Pandely President - Retail & Business Development
Robert Lobo President (Operations) - Group Apparel
S L Pokharna PresidentCommercial
Shailesh Haribhakti Director
Shreyas Joshi President - Group Apparel
Thomas Fernades Director - Secretarial & Co. Secretary
Thomas Fernades Secretary
Vijaypat Singhania Chairman Emeritus
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BUSINESS OVERVIEW
B2C constitutes 84% of its revenue.
B2B
CONSTITUTES 16% OF ITS
REVENUE
STATEGIC THRUST AREAS
Leadership Position
- Permanently anchor Raymond leadership position across the consumer volume
spectrum
Brand Focused Approach
- Focus on Power brands to help maintain pricing power and profitability through its
premium positioning
Market Access
- Continous rapid penetration in untrapped smaller towns and cities through its
exclusive retail network.
BRANDS
RAYMOND
Parx Avenue
Parx
colour plux
RETAIL
Wholesalers
MBOs
Exclusive stores.
DOMESTIC MARKET
FABRIC MARKETING
GARMENT
MANUFACTURING
INTERNATIONAL MARKET
EXPORTS
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Finance:
INTERPRETATION
In the year 2004, share price is increasing every month and ends with Rs.317.20/share.
In the year 2005, share price is fluctuating every month like Sine Wave
In the year 2006 & 2007, per share price is fluctuating around Rs.400.
In the year 2008, market downfall hits Raymond very hard. Every month in 2008, the
share price is declining and it comes to its lower price in last 10 years at Rs.81.95 per
share.
But in 2009, Raymond is recovering from market downfall period like other companies
does and at the end of the year its price increases to the Rs.195 per share.
INTERPRETATION OF EXHIBIT3
The total income in march 2008, is 1510.64 cr but in 2009 it increased further to
1178.77 due to global recession, but in 2010 the net sales again increased to
1358.04cr and as the sales turnover increased so the total income further increased
in 2011 to 1406.91cr.
The total expenditure has increased in 2009 by 12.94cr bt in 2010 it decreased as
the other factors like raw materials, employees cost and miscellaneous expenses
decreased.
AWARDS AND RECOGNITION
TEXTILES
The Business world Most Respected Company Award 2011 in the Apparel & Textile
category.
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Raymond has been ranked 20thin The Brand Trust Report, India Study,2011.
Images Fashion Awards 2009Most Admired Textile Brand of the Year
Readers Digest- Platinum Trusted Brand,20084
Lyrca Images Fashion Awards 2008Most Admired Textile Brand of the Year
Lyrca Images Fashion Awards 2008- Most Admired Suiting Brand of the Year. CNBC Consumer Award 2007The Best Branded Readymade Garment and Textile.
BRANDS
PARK AVENUE
Images Fashion Awards 2011Most Admired Mens Formalwear Brand of the Year.
Images Fashion Awards 2009Most Admired Menswear Brand of the Year.
Lyrca Images Fashion Awards 2008Most Innovative Lyrca Brand of the Year.
HR
ACCOR SERVICES(International Leader and Indias Foremost in Employee Benefits,
Motivation and Loyalty Solutions)Presented the GLOBAL HR EXCELLENCE AWARDS
200708 for the Outstanding Contribution to the Cause of Education at the Asia Pacific HRM
Congress.
HUMAN RESOURCE PRACTICES IN RAYMONDS LIMITED:
Craftsmanship, teamwork and professionalism have come together at Raymond to weave tales of the
finest Fabrics for over 80 years. Today, it has gained its market leadership position primarily on the
strength of its vast talent pool.The company has always emphasized on the continuous and consistentup gradation of manpower in order to fully embrace the rapid changes in the textile industry. The popular
HR practices in Raymond are-
1. MANPOWER RESOURCING:
a. Internal Resourcing: The company first scouts for talent within the organization to provide
opportunities to its employees
b. lateral recruitment:Market skilled employees from other companiesare periodically
inducted into the organization from time to time. A combined force of existing talent and
induction of fresh blood o be competitive in the face of increasing business complexities.
2. CONTINOUS LEARNING AND DEVELOPMENT
There is great emphasis on behavioral and attitudinal training apart from technical and on-the-job
training.
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Raymond Management Development Programme
The Raymond Management Development Programme (RMDP) provides participants designatedfrom various divisions at Raymond with basic and advanced management perspectives and an
opportunity for self-learning. The participants will be trained at Welingkar Institute of
Management Development & Research, Mumbai followed by sessions back home over the next
six month
At Raymond, an Performance Management System provides opportunity for employees toexplore their potential for professional growth and personal development.
Good performers are promptly recognized and rewarded. Developmental needs and futurepotential are established through assessment centers and on-line testing . Feedback is shared on
an on-going basis and reward and recognition are linked through measurement of Key Result
areas
360-Degree Feedback System
A 360 Degree Feedback System provides senior managers with valuable inputs throughassessment from their colleagues, subordinates and internal as well as external customers. This
enables the management to prepare their employee's individual development plans by
understanding their potential, interests and goals
Employee Involvement
Raymond believes that employee involvement is the key to continuous improvement, sounddecision-making and developing an open and transparent organization. Open forums provide
opportunities to employeesshare their views regarding people policies. This ensures a foundation
of people centric policies. An online HR Manual brings transparency in HR processes. Latent
creativity among organizational members is tapped through initiatives like Kaizen, Quality
Circles and Suggestion Schemes in units.
The Raymond Interchange, a think-tank of the Co's top management group, is an on-goinginitiative which harnesses the collective views on business strategy and is one of the drivers of
employee involvement. Usage of the internal branding concept throughout the Group also plays
an important role in driving employee involvement. We are proud of the fact that we are one ofthe most empowered organizations in terms of decision making down the line.
COMPENSATION AND BENIFIT
Wherever Raymond has created industry and employment, it has also provided educational,
housing, recreational and spiritual support systems for its people. Employees' children have thefacility to enroll themselves in the schools run by the J.K. Trust, at 50% of the fees. In many
cases, children's education is absolutely free. From subsidized transport facilities or availability
of Raymond products at concessional rates to its employees; the company always strives to makeemployees feel a part of the large Raymond family.
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OPERATION IN RAYMOND
,
Raymond has fully integrated Value chain as clearly stated from the diagram.
Competitors:
Ashnoor Textile Mills Ltd.
Digjam Ltd.
Globus Constructors & Developers Ltd.
Hytone Texstylers Ltd.
LWS Knitwear Ltd.
Modella Wollens Ltd.
FUTURE ASPECTS:
It has started having many retail stores to increase their reach to the consumers.
They have tied up with international brand called GAS & Ansell- Australia based
company with 50:50 ratio joint joint venture. Itll increase the employment & apparel
industry in India.
Raymond have bought 50 acres of land near Thane, Mumbai of worth Rs.750 crores.
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Raymond are planning to invest Rs.1billion to open 300 more stores by the end of march,
2011.
Raymond expects its turnover to exceed Rs.2 million per annum from these stores.
SWOT ANALYSIS
STRENGTH
The company has strong Research andDevelopment dept. for product and new
technology The company has many qualified and
experience Human Resource department who
takes care of the best quality of employees by
selection and recruitment. Raymond has maintained its leadership
position in brand track studies as compared toits competitors.
WEAKNESS
The company has obsolete technology. The company has low production in
off session. The company has less man power
according to the work.
OPPORTUNITIES The company is a market leader in the textile
sector in India, has a powerful brand
Raymond and strong retail presence in theform of THE RAYMOND SHOP
domestically.
The Companys long term strategy forestablishing itself as a preffered supplier of
value- added premium fabric in theinternational markets, has started yieldingresults.
The company is becoming a ONE STOP SHOPfor premium international customers.
The Company is now concentrating a newavenues to increase sales and is geared up to
meet opportunities for growth in new market
segments like corporate-wear, service industry,
hospitality industry etc. which are emerging asbig segments for textile manufacturers.
THREATS China continues to be a dominant
player in the market with betterinfrastructure facilities and removal of
quoata restrictions in 2008 by US,
China is a stronger competitor in
exports as well as in the domesticmarket.
The company is experiencing pressureon margins due to severe competitionfrom low-cost countries and stronger
Indian Rupee.
There is also a threat of high inflationas the prices of commodities has beenincreasing since last 3 quarters.
Textile being a labor intensiveindustry, rising labor and skilled
human resource costs can put pressureon.
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Porters Five Force Model
Threat of new entrants
Decrease in profitability due to increase in number of entrants.
This results in high entry barriers.
Bargaining power of suppliers
Bargaining power of suppliers is low.
Supplierss margins have been stagnant despite strong growth in volumes.
Threat of established rivals
Raymond is having 64% of the Market share in India.
High competition in the sector.
Established rivals are a threat to upcoming players
Threat of substitute product
Threat of Substitute product due to pricing policy
inta
industry
rivalry BU
potential
newentrants
bargaining
power of
buyer
substitute
product
and
services
bargaining
power of
supplier
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EXHIBIT-I
THE RAPID INCREASE IN SHOWROOMS OF RAYMOND
Year No. of showrooms in INDIA and
OVERSEAS2006-07 437
2007-08 547
2008-09 548
2009-10 676
2010-11 739
EXHIBIT -II
Shareholding pattern - Raymond Ltd.
Holder's Name No of Shares % Share Holding
Promoters 2,39,93,618 39.09%
GeneralPublic 1,31,80,340 21.47%
FinancialInstitutions 89,84,990 14.64%
NBanksMutualFunds 83,28,487 13.57%
ForeignInstitutions 38,69,753 6.30%
OtherCompanies 21,77,810 3.55%
Others 1,343 0.00%
EXHIBIT-III
PROFIT AND LOSS STATEMENT
Mar'11 Mar'10 Mar'09 Mar'08 Mar'07
12 Months
12
Months 12 Months 12 Months
12
Months
INCOME:
Sales Turnover 1,502.51 1,360.84 1,414.21 1,352.33 1,315.95
Excise Duty 0.96 4.16 14.00 14.79 15.59
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NET SALES 1,501.54 1,356.68 1,400.21 1,337.54 1,300.36
Other Income 0.00 0.00 0.00 0.00 0.00
TOTAL INCOME 1,562.23 1,406.23 1,474.06 1,402.08 1,340.01
EXPENDITURE:
Manufacturing Expenses 197.76 161.05 172.83 166.08 164.50
Material Consumed 484.69 512.03 507.94 522.06 484.98
Personal Expenses 251.28 254.54 261.00 233.16 225.58
Selling Expenses 151.08 134.59 146.14 134.17 130.28
Administrative Expenses 200.10 165.78 192.95 190.54 148.14
Expenses Capitalised 0.00 0.00 0.00 0.00 -1.79
Provisions Made 0.00 0.00 0.00 0.00 0.00
TOTAL EXPENDITURE 1,284.92 1,227.98 1,280.86 1,246.02 1,151.69
Operating Profit 216.62 128.70 119.35 91.52 148.67
EBITDA 277.31 178.24 193.21 156.07 188.32
Depreciation 103.72 111.31 88.81 81.07 63.06
Other Write-offs 0.00 0.00 0.00 0.00 0.00
EBIT 173.59 66.94 104.39 75.00 125.26
Interest 101.88 98.17 85.20 60.30 48.59
EBT 71.70 -31.24 19.19 14.69 76.67
Taxes -47.78 -6.32 -27.15 15.57 36.98
Profit and Loss for the Year 119.49 -24.91 46.34 -0.8 39.69
Non Recurring Items -243.88 26.68 -324.28 57.66 150.47
Other Non Cash Adjustments 24.20 23.29 6.38 15.64 11.96
Other Adjustments -4.68 1.31 1.15 -6.30 -0.8
REPORTED PAT -104.87 26.37 -270.40 66.12 201.25
KEY ITEMS
Preference Dividend 0.00 0.00 0.00 0.00 0.00
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Equity Dividend 6.14 0.00 0.00 15.35 30.69
Equity Dividend (%) 10.00 0.00 0.00 25.00 50.00
Shares in Issue (Lakhs) 613.81 613.81 613.81 613.81 613.81
EPS - Annualised (Rs) -17.09 4.30 -44.05 10.77 32.79