When Raymond Lifestyle made its stock market debut on 5 September 2024, it did so with the swagger of a brand that needed no introduction. Spun off from its illustrious parent Raymond, the listing was celebrated as a strategic move to unlock value and allow the lifestyle arm to chart its own growth story. With a listing price of ₹3,100 and a market capitalization of ₹18,256 crore, the ambitions were sky-high: double Ebitda to over ₹2,000 crore by FY28, riding on 12–15% annual sales growth.
But what followed was a lesson in the unpredictability of markets and consumer sentiment.
The Sharp Descent: Weak Demand and Operational Hiccups
FY25 turned out to be a stormy year for Raymond Lifestyle. Revenue shrank by 5% to ₹6,360 crore as weak consumer demand weighed heavily. Margins took a major hit, contracting by 610 basis points to 10.2%, and net profit plummeted by 80% to ₹100 crore.
These financial blows sent the stock spiraling, crashing nearly 70% to a low of ₹911 by April 2025. However, since then, it has rebounded by over 40%, reaching ₹1,284, sparking hopes of a turnaround.
A Brand Steeped in Legacy — But Facing Modern Challenges
Raymond Lifestyle remains India’s dominant force in men’s wedding and formalwear. Its formidable brand portfolio — Raymond, Park Avenue, ColorPlus, Parx, and Ethnix by Raymond — commands widespread consumer recall. The business operates across four key segments: branded textiles, branded apparel, garmenting, and high-value shirting.
In FY25, branded textiles contributed the lion’s share of revenue (47%) and Ebitda (64.5%). Branded apparel followed, with 25% revenue share, while garmenting and shirting made up the rest.
The Textile Troubles
Branded textiles revenue dropped 13% to ₹3,002 crore, hit by weak discretionary spending and an unforeseen ransomware attack in February that disrupted operations for 25 days, costing ₹150–175 crore. Ebitda margins tumbled from 21% to 14%, with profits nearly halved.
Despite this, early signs of recovery have emerged. The company has reported a 12–13% improvement in bookings and expects 10–15% revenue growth in FY26, buoyed by a healthier consumer environment.
Branded Apparel: Expansion Amid Soft Demand
The branded apparel segment managed flat revenue at ₹1,593 crore. A dip in wedding demand and fewer auspicious dates translated into lower store footfalls. Meanwhile, Ebitda margins dropped to 7% from 12% due to aggressive retail expansion and an unfavorable channel mix.
In FY25, Raymond Lifestyle added 170 stores, growing its network to 1,688 outlets, including over 1,000 Raymond Shops and a burgeoning number of exclusive brand outlets. Encouragingly, strong secondary sales in March–May hint at a potential rebound.
Ethnic Wear and New Categories: Betting on the ‘Complete Man’
Ethnix by Raymond surpassed ₹100 crore in revenue with 152 stores, signaling success in ethnic wear. Plans are afoot to scale to 300 Ethnix stores and cross 900 exclusive outlets by FY27 through a franchise-led model — a move designed to keep overheads light.
Raymond has also entered new categories like sleepwear and innerwear, reinforcing its ‘Complete Man’ proposition. The introduction of casual wear opens doors to a growing market segment hungry for versatility.
Garmenting: Global Hopes, Local Pains
While garmenting revenue rose 3% to ₹1,068 crore, Ebitda was halved due to global uncertainties and higher training costs. The company’s strategy to ride the “China Plus One” and “Bangladesh Plus One” shifts is promising.
New client wins in the US, UK, and Europe — plus the India-UK free trade agreement — could drive 30–40% revenue growth from the UK over the next two years. With its vertically integrated supply chain, Raymond aims to cement its reputation as a leading global formalwear supplier.
Shirting: A One-Time Boost
High-value shirting revenue dipped 4% to ₹800 crore, but Ebitda rose 21% to ₹114 crore thanks to a one-time ₹53 crore government subsidy. Margins improved to 14%, providing a temporary cushion.
Financial Reset and Market Valuation
Raymond Lifestyle closed FY25 with ₹6,360 crore in revenue and ₹651 crore in Ebitda — down 40% year-on-year. Net profit stood at a subdued ₹100 crore. Yet, a net-debt-free balance sheet and ₹90 crore in cash reserves highlight its financial resilience.
At a price-to-sales ratio of just 1.3, the stock trades at a significant discount to peers like Aditya Birla Fashion and Vedant Fashions. This undervaluation offers a margin of safety — a potential upside if financial performance improves.
The Road Ahead: Promises and Pitfalls
Management expects FY26 to be a “reset year,” targeting 10–15% revenue growth and a profitability revival. The recovery momentum in textiles and apparel bookings, coupled with strategic store additions and brand extensions, could finally steady the ship.
However, governance remains a concern. Recent management attrition has sparked investor anxiety, underscoring the need for leadership stability to execute this ambitious roadmap.
Conclusion: Stitching Together a Comeback
Raymond Lifestyle’s journey embodies the tightrope walk between heritage and reinvention. While FY25 tested its resilience, FY26 could mark the beginning of a steady comeback if execution aligns with vision.
For investors and brand loyalists alike, the coming months will reveal whether Raymond Lifestyle can weave its challenges into a new narrative of sustained growth — or if it will remain a cautionary tale of overambitious expansion gone awry.
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Disclaimer
This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.