Raymond Lifestyle Bounces Back: Can a 40% Rise from All-Time Lows Spark a Turnaround?

Raymond Lifestyle recently faced tough times. In FY25, its revenue slipped 5% to ₹6,360 crore. Weak consumer demand was a big factor as margins shrank to 10.2%. Even more startling, net profit plummeted 80% to ₹100 crore, causing the stock price to drop nearly 70%, reaching a low of ₹911 by April. Luckily, things seem to be changing. The stock has climbed over 40% to ₹1,284. So, is the worst behind us? Let’s take a closer look.

Raymond is a well-known brand in India for men’s wedding and formal wear. It has a diverse product range, including Raymond, Park Avenue, ColorPlus, Parx, and Ethnix by Raymond. The company operates in four key areas: branded textiles, branded apparel, garmenting, and high-value shirting.

In FY25, branded textiles generated the most revenue, bringing in ₹3,002 crore, contributing 47% of total revenues. It also made ₹420 crore in Ebitda, or 64.5% of the overall profit. This was followed by branded apparel, which contributed ₹1,593 crore and ₹118 crore in Ebitda. The garmenting and high-value shirting segments also made notable contributions to the overall earnings.

Raymond’s plan focuses on reinforcing its textiles business, accelerating growth in apparel and garmenting, and exploring new categories like ethnic wear and sleepwear.

However, challenges hit the textile segment hard. A 13% drop in revenue to ₹3,002 crore was largely due to weak demand. A ransomware attack in February also disrupted operations for nearly a month, leading to an estimated loss of ₹150-175 crore in Q4 alone. Ebitda margins for textiles fell sharply to 14% from 20.9% the previous year.

Despite these setbacks, there are green shoots of recovery. Raymond has noted a 12-13% increase in bookings and healthy orders for the upcoming autumn-winter 2025 collection. Management is optimistic, forecasting a 10-15% revenue growth for FY26. This optimism is bolstered by potential increases in discretionary spending, thanks to tax cuts and lower inflation.

The branded apparel segment saw flat growth at ₹1,593 crore. Demand for weddings dipped, affecting foot traffic in stores. Despite adding 170 new stores (totaling 1,688), Ebitda margins fell from 11.9% to 7.4% due to ongoing investments in retail expansion.

Raymond’s new ethnic wear brand, Ethnix, has exceeded ₹100 crore in revenue within a year. They plan to double their store count by FY27, aiming to boost profitability while keeping overheads low. In FY25, they also expanded into sleepwear and innerwear, tapping into new market segments.

The garmenting business saw a modest revenue rise of 3% to ₹1,068 crore. While they added over 20 new clients, uncertainties in the global market put pressure on profitability, causing margins to halve to 4.7%. However, with shifts in sourcing trends and a recent free trade agreement with the UK, management is hopeful about future growth.

Lastly, the shirting segment experienced a revenue drop of 4% to ₹800 crore. However, Ebitda rose 21% thanks to a one-time government subsidy.

Overall, FY25 was a difficult year for Raymond Lifestyle, with a consolidated revenue decline of 5%. But the company ended the year without debt and with ₹90 crore in cash reserves. Looking ahead, FY26 is seen as a year of renewal, with management forecasting a bounce-back in revenue and profitability.

The company’s stock now trades at a lower price-to-sales multiple compared to peers, suggesting room for potential recovery in valuation. While there have been some concerns about management turnover, early signs of recovery are promising. Investors are eager to see if Raymond can sustain this momentum in FY26 and beyond.

According to experts, focusing on core operations and strategic expansion could be key to a sustainable recovery. The textile industry’s resilience in times of economic distress also plays a role in shaping Raymond’s future. Understanding these dynamics can offer investors a clearer picture of what’s ahead.

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