Buy Raymond; target of Rs 1362: Arihant Capital

Arihant Capital's research report on Raymond

Raymond’s overall performance for the quarter was stellar. This was due to the strength of the company’s brand strength and distribution network which was heavily capitalized on. They also faced good consumer demand owing to the opening post-covid economy. The export demand and realty segment also had notable growth this quarter. Raymond’s Q4FY22 Revenue from operations grew by 44.36% YoY to INR 2,032 Cr (+8.6% QoQ) vs our estimate of INR 1,261 Cr. Q4FY22 Gross Margin expanded by 646bps YoY 67.15% (+461bps QoQ). Q4FY22 EBITDA grew by 82.05% YoY to INR 358 Cr (+18.25% QoQ) vs our estimate of INR 110 Cr. EBITDA Margin expanded by 365ps YoY to 17.62% (+144bps QoQ) vs our estimate of 9%. This shows how the company’s continuous cost saving initiatives have proven to be successful. Q4FY22 PAT grew 354.03% YoY to INR 265 Cr (+162.16% QoQ) vs our estimate of INR 177 Cr.

Outlook

We value the stock at a TP of INR 1,362 with an upside of 58% from the CMP. We expect the revenue to grow at a CAGR of 11.62% from FY22- 25. Raymond has displayed excellent growth during the quarter, with the highest ever quarterly Revenues, PAT and EBITDA delivered.

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