Buy Raymond; target of Rs 2310: Motilal Oswal

Motilal Oswal's research report on Raymond

Raymond’s revenue doubled YoY to INR9.4b, led by strong performance in the real estate segment and the contribution from Maini Precision Products (MPPL), which was acquired on Mar’24. EBITDA reported over two-fold growth to INR1b as consol. EBITDA margins improved by 100bp to 10.8%. However, growth in adj. PAT was constrained at 26% due to higher interest costs, leading to a ~350bp decline in PAT margins.

Outlook

We arrive at a valuation of INR126b (i.e., INR1900/share). Engineering business is valued at EV/EBITDA of 12x on FY26E, arriving at a value of INR410/share. The combined value of the real estate and engineering businesses works out to be INR2,310/share. Reiterate BUY.