RAYMOND_base

8/7/2019 RAYMOND_base

1/4

CRISIL COMPANY REPORT | 1

Raymond Ltd

GICS Industry : Textiles, Apparel & Luxury Goods l Sub Industry : Textiles l Website :www.raymondindia.com

NSE Ticker : RAYMOND

Bloomberg Ticker : RW:IN

Face value / Share: 10.0

Div. Yield (%): 0.0

CMP (as on 15 Dec 2010Rs/share): 365.2

52-week range up to 15 Dec 2010 (Rs)(H/L): 443.80/188.05

Market Cap as on 15 Dec 2010 (Rs mn): 22,416

Enterprise Value as on 15 Dec 2010 (Rs mn): 38,712

Shares outstanding (mn) : 61.4

Free Float (%) : 61.0

Average daily volumes (12 months) : 837,336

Beta (2 year) : 1.14

Ke Stock Indicators

Raymond Ltd (Raymond) was incorporated in 1925; it manufactures fine fabrics, wool, wool-

blended worsted suiting, ring denims and high value shirting. It has some of the most highly

respected apparel brands in its portfolio like Raymond, Raymond Premium Apparel, Manzoni, Park

Avenue, ColorPlus, Parx, Zapp! and Notting Hill. All the plants of the company are ISO certified,

leveraging on cutting-edge technology that adheres to the highest quality parameters while also

being environment friendly.

KEY HIGHLIGHTS

Expansion of capacity

Raymond has expanded capacity of worsted suiting to 33 million meters with a new facility at Vapi,

Gujarat in FY10, in addition to expansion of capacity of denim fabric to 40 million meters. It has set

up three world class garmenting units near Bangalore for the manufacture of formal suits, jeans

wear and dress shirts.

New joint ventures increase companys product range

Raymond has joined hands with UCO NV of Belgium, a leading producer of high end denim, to form

a global denim company with a combined capacity of 80 million meters and manufacturing facilities

in 3 continents with a global marketing network. It has formed a JV with Lanificio Fedora (Italy's

leading woollen fabric manufacturer) for the manufacture of carded woollen products.

Tough times continue for the companys overseas subsidiaries

In FY10, its wholly owned subsidiary in Europe - Regency Texteis Portuguesa Limitada (Regency),Portugal, filed for insolvency due to adverse changes in European market conditions coupled with

the bankruptcy of its major customers.

KEY RISKS

Volatility in prices of cotton Foreign exchange fluctuations

YTD 1-m 3-m 12-m

RAYMOND 35 -20 -16 76

NIFTY 9 -8 2 13

Returns (%)

Note:

1) YTD returns are since April 1, 2010 to Dec 15, 2010.

2) 1-m, 3-m and 12-m returns are up to Dec 15, 2010.

Mar-08 Mar-09 Mar-10

Revenue (Rs mn) 24,768.1 26,610.4 25,733.8

EBITDA margins (%) 7.6 8.5 10.5

PAT (Rs mn) -16.8 -2,272.8 -453.4

PAT margins(%) -0.1 -8.5 -1.8

Gearing (x) 1.2 1.6 1.5EPS (Rs/share) -0.3 -37.0 -7.4

PE (x) n.m n.m n.m

P/BV (x) 1.4 0.4 1.9

RoCE (%) 3.7 0.5 2.8

RoE (%) -0.1 -17.9 -3.8

EV/EBITDA (x) 17.9 9.9 14.4 n.m. : Not meaningful

Promoter

39%

FII

7%

DII

27%

Others

27%

0

2000

4000

6000

8000

10000

0

50

100

150

200

250

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

('000)(index)

Volumes (RHS) RAYMOND NIFTY

Indexed price chart

Shareholding (As on September 30, 2010)

Key Financial Indicators

Stock Performances vis--vis market


2/4


Raymond Ltd

BACKGROUND

Raymond is Indias leading producer of worsted suiting fabric with a 60% market share. The Raymond Shop retail chain occupies a space of more than 1 million square feet

built-up area. Wide reach all over the country across big cities and smaller towns allows the company to reach a wide spectrum of consumers. It has 500 stores in prime

locations, in over 200 cities in India, overseas network spans 39 stores in 15 plus cities across the Middle East, Saudi Arabia, Sri Lanka and Bangladesh.

COMPETITIVE POSITION

Peer Comparison

Raymond Ltd Siyaram Silk Mills Ltd. Arvind Ltd. Sangam (India) Ltd.Mar-10 Mar-10 Mar-10 Mar-10

Revenue (Rs mn) 25,733.8 8,004.6 32,769.7 8,578.5

EBITDA margins (%) 10.5 9.3 14.4 15.3

PAT (Rs mn) -453.4 337.2 530.6 171.5

PAT ma rgins(%) -1.8 4.2 1.6 2.0

Gearing (x) 1.5 1.0 2.2 3.7

EPS (Rs/sha re) -7.4 36.0 1.6 4.4

PE (x) n.m 10.4 31.4 11.1

P/BV (x) 1.9 2.1 0.8 1.0

RoCE (%) 2.8 16.8 8.0 8.2

RoE (%) -3.8 22.0 5.2 9.5

EV/EBITDA (x) 14.4 6.9 7.0 6.7 n.m: Not meaningful

FINANCIAL PROFILE

VRS drags the companys bottom-line into the red in FY10

Raymonds top line dropped by around 3% in FY10 on account of lower realisations

as compared to FY09. However EBIDTA margins though improved to 10.5% on

account of lower raw material and operating cost. However, a one time VRS

settlement with its workers at its Thane unit led the company to register a loss at

the net level in FY10.

Units Mar-08 Mar-09 Mar-10

Re ve nu e R s mi l li on 24,768.1 26,610.4 25,733.8

EBITDA margins Per cent 7.6 8.5 10.5

PAT Rs mil l ion -16.8 -2,272.8 -453.4

PAT margins Per cent -0.1 -8.5 -1.8

Revenue growth Per cent 17.1 7.4 -3.3

EBITDA growth Per cent -30.9 20.3 19.5

PAT growth Per cent -101.2 -13,423.9 80.1

Gearing Ti mes 1.2 1.6 1.5

RoCE Per cent 3.7 0.5 2.8RoE Per cent -0.1 -17.9 -3.8

Key Financial Indicators

INDUSTRY PROFILE

Worsted Fabric

The market for worsted fabr ics is small in India as demand mainly arises from the premium segment of the market for p roducts like suits and blazers. It is a niche market

and is characterised by high degree of brand consciousness. The industry comprises of few large organised players, and as compared to other segments in the textile

industry, competition is limited, which gives players greater pricing flexibility. The demand is, however, sensitive to substitutes like blended fabric (wool blended with

polyester) due to better crease resistance and lower prices. Wool is the main raw material used in the industry. Around 95 per cent of the wool used for worsted fabric is

imported from countries like Australia and New Zealand.

Readymade garments

Around 70 per cent of the demand for readymade garments emanates from the domestic market, with the remaining coming from exports. The domestic RMG market is

highly fragmented with few organised players and a large number of unorganised players. The organised segment is relatively better off as benefits of branding and

positioning accrue to them in the form of better price realisations. On the export front, India faces s tiff pricing pressure from low cost countries such as China, Vietnam,

Bangladesh, Indonesia, and Pakistan, which have been able to garner a substantial portion of the US and EU markets on the basis of lower prices. India scores over other

countries in respect of availability of raw material and labour; but heavy skew towards cotton-based apparel exports, limited diversification of export markets, and low

machinery and labour productivity compared to competing exporters restrict the growth prospects for Indian RMG exporters.


3/4


Raymond Ltd

ANNUAL RESULTS

Income Statement Balance sheet

(Rs million ) Mar-08 Mar-09 Mar-10 (Rs million ) Mar-08 Mar-09 Mar-10

Net Sales 23,985.6 25,913.5 24,992.8 Equity share capital 822.5 822.5 613.8

Operating Income 24,768.1 2 6,610.4 25,733.8 Res erves a nd s urpl us 12,531.3 11,194.4 11,057.1

Tangible net worth 13,353.8 12,016.9 11,670.9

EBITDA 1,872.2 2,252.9 2,691.9 Deferred ta x l iabl ity:|a ss et| 643.6 275.4 211.9

EBITDA Margin 7.6 8.5 10.5 Long-term debt 8,250.3 11,555.5 10,256.4

Short-term-debt 7,257.7 6,830.8 6,746.5

Depreciation 1,688.6 1,665.5 1,765.4 Total debt 15,508.0 18,386.3 17,002.9

Interest 798.3 2,631.5 1,177.3 Current l iabilities 4,648.9 5,354.1 4,934.4

Other Income 961.9 761.8 449.4 Total provisions 953.9 892.7 1,091.0

Total liabilities 35,108.2 36,925.4 34,911.1

PBT 270.6 -2,477.3 -344.9 Gross block 12,801.9 14,931.4 13,999.6

PAT -16.8 -2,272.8 -453.4 Net fixed assets 13,169.9 15,778.4 14,628.7

Investments 6,370.4 6,301.5 6,296.6

PAT Margin -0.1 -8.5 -1.8 Current assets 15,568.0 14,845.5 13,985.7

Receivables 4,641.4 4,588.6 4,509.8

No. of shares (Mn No.) 61.4 61.4 61.4 Inventories 6,664.9 5,950.9 5,624.7

Cash 579.3 835.9 706.7

Earnings per share (EPS) -0.3 -37.0 -7.4 Total assets 35,108.3 36,925.4 34,911.0

Cash flow Ratio(Rs million ) Mar-08 Mar-09 Mar-10 Mar-08 Mar-09 Mar-10

Pre-tax profit 347.1 -1,282.4 198.6 Revenue growth (%) 17.1 7.4 -3.3

Total tax paid -310.8 -163.8 -172.1 EBITDA growth(%) -30.9 20.3 19.5

Depreciation 1,688.6 1 ,665.5 1,765.4 PAT growth(%) -101.2 -13,423.9 80.1

Change i n worki ng capi tal -2,074.6 1,623.1 509.3

EBITDA margins(%) 7.6 8.5 10.5

Cash flow from operating activit ies -349.7 1,842.4 2,301.2 Tax rate (%) 93.5 -6.6 -49.9

Capital Expenditure -1,216.0 -3,440.4 -560.4 PAT margins (%) -0.1 -8.5 -1.8

Investments and others -562.3 68.9 4.9

Dividend payout (%) -913.1 0.0 0.0

Cash flow from investing activities -1,778.3 -3,371.5 -555.5 Return on Equity (%) -0.1 -17.9 -3.8

Equity raised/(repaid) 0.0 0.0 0.0 Return on capital employed (%) 3.7 0.5 2.8

Debt raised/(repaid) 2,072.5 2,878.2 -1,383.4

Dividend (incl. tax) -184.6 -4.9 -0.8 Gearing (x) 1.2 1.6 1.5

Others (incl extraordinaries) 251.8 -1,087.7 -490.6 Interest coverage (x) 2.3 0.9 2.3Debt/EBITDA (x) 8.3 8.2 6.3

Cash flow from financing activities 2,139.7 1,785.6 -1,874.8

Change in cash position 11.7 256.5 -129.1 Asset turnover (x) 2.0 1.9 1.8

Opening cash 567.6 579.3 835.9 Current ratio (x) 1.5 1.5 1.5

Closing cash 579.3 835.9 706.7 Gross current assets (days) 212 194 188

n.m:Notmeaningful;

QUARTERLY RESULTS

(Rs million) Sep-10 % of Rev Sep-09 % of Rev Jun-10 % of Rev Sep-10 % of Rev Sep-09 % of Rev

No of Months 3 3 3 6 6

Revenue 4,184.8 100.0 4,140.2 100.0 2,555.4 100.0 6,714.1 100.0 6,703.0 100.0

EBITDA 988.0 23.6 733.3 17.7 103.0 4.0 1,091.0 16.2 834.6 12.5

Interest 225.3 5.4 227.7 5.5 210.1 8.2 435.4 6.5 459.2 6.9

Dep re ci a ti on 255.7 6.1 281.4 6.8 254.3 10.0 510.0 7.6 551.0 8.2

PBT 505.7 12.1 68.5 1.7 (380.1) (14.9) 125.6 1.9 (332.6) (5.0)

PAT 391.8 9.4 74.3 1.8 (248.8) (9.7) 143.0 2.1 (241.7) (3.6)

Profit and loss account


4/4


Raymond Ltd

FOCUS CHARTS & TABLES

Dec 2009 Mar 2010 Jun 2010 Sep 2010Promoter 38.4 39.0 39.6 39.0

FII 7.3 8.0 7.3 6.5

DII 22.9 22.4 21.5 27.2

Others 31.5 30.7 31.6 27.3

Shareholding Pattern (Per cent)

Director Name DesignationGautam Hari Singhania (Mr.) Executive Chairman & Managing

Di rector, Promoter-Director

Ishwar Das Agarwal (Mr.) Nominee Director, Non-Executive

Director

Pradeep Kumar Bhandari (Mr.) Non-Executive Director

Pradeep Kali Pada Guha (Mr.) Non-Executive Director

Nab ankur Gup ta (Mr.) Non-Execu tive Di rector

Shailesh Vishnubhai Haribhakti

(Mr.)

Non-Executive Director

Vijayp at S inghan ia (Dr.) Non -Execu tive Di rector

Board of Directors

Additional Disclosure

This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

Disclaimer

This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as

such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as o n the date of this report. Nothing in this report constitutes investment,

legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial

liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or

redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose.

CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please

contact 'Client Servicing' at +91-22-33423561, or via e-mail: [email protected].

-20

-15

-10

-5

05

10

15

20

25

30

0

500

1,000

1,500

2,0002,500

3,000

3,500

4,000

4,500

5,000

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Per centRs mn Quarterly sales & y-o-y growth

Sales Sale s growth y-o-y (RHS)

Quarterly PAT & y-o-y growth

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Rs mn

-1,200

-1,000

-800

-600

-400-200

0

200

400

600

Per cent

Net Profi t Net profi t growth y-o-y (RHS)

-50

-40

-30

-20

-10

0

10

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Rs/share EPS

-80-70

-60-50

-40-30

-20-100

1020

30

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Per cent Movement in operating and net margins

OPM NPM

Documents

RAYMOND_base