Raymond Lifestyle Ltd. is likely to witness healthy growth as demand improves due to festive and wedding seasons, Motilal Oswal Financial Services Ltd said. in a note Wednesday. The company struggled earlier as demand remained sluggish over the past 12-15 months.
Motilal Oswal Financial Services Ltd. has maintained “Buy” on Raymond Lifestyle Ltd. with an unchanged price target at Rs 3000. The target price implied an upside of 48.43% from Tuesday’s closing price.
The brokerage estimates double-digit growth of around 12-14% in secondary sales and further improvement in collection in the third quarter for Raymond Lifestyle. At the same time, the improvement in demand in primary sales will be reflected with a one-quarter lag due to increased inventories and weak demand in recent months.
The number of wedding days extends into the second half of fiscal 2026, which will keep demand dynamics at a healthy pace. This will likely create a sweet spot for Raymond Lifestyle as the wedding portfolio accounts for 35-40% of its total revenue.
Raymond Lifestyle is targeting revenue growth of 12-14% and Ebitda/PAT growth of 15-18% in the medium term. The branded clothing segment will be the key growth driver with an increase in exclusive brand outlets and a rise in Ethnix, as well as the entry of Raymond Lifestyle into sleepwear and innerwear , according to Motilal Oswal Financial Services.
Raymond Lifestyle aims to increase the number of EBOs to 900 by fiscal 2027, while brands like Park Avenue, ColorPlus and Ethnix could expand their presence to 300 stores each in tier 1 to 4 cities, said Motilal Oswal Financial Services.
Raymond Lifestyle could see an incremental turnover of Rs 300 crore by FY2027 in the sleepwear and innerwear category, the brokerage said.
The company operates with an operational return on capital employed of 30% and management hopes to improve further. Improving demand and better collections, along with moderation in capital expenditure will help Raymond Lifestyle improve its ROCE.