LKP Securities
Raymond (Buy)
Target: ₹485
CMP: ₹342.9
Raymond is the No.1 player in the Branded Textile Segment and a leading player in Branded Apparel Segment with a nationwide retail presence. The company is constantly adding new and innovative products along with the launch of new segments such as Ethnic wear, Style Me and Khadi among others to attract a wider customer base and enhance the customer experience.
The garment business is also growing well with increasing demand for MTM business in US, Europe and contribution from PPE products.
Raymond is also the market leader in steel files and drills market where the recovery is back on the pre-covid levels. The Automotive component business has turned around and is one of the highest margin businesses of the company.
The company has created an extensive retail network with over 20,000 point of sales and 1,577 retail stores in India.
Raymond has launched seven towers in its ‘Aspirational’ 10 Tower project in Thane’s prime location. The company is also unlocking value through demerger of the lifestyle business and business integration of the FMCG business.
We value Raymond on SOTP basis considering each individual business vertical as a separate growth driver.
The stock has appreciated 26% post our coverage in September and we continue to remain optimistic on the prospects going forward with a price objective of ₹485.