Buy Raymond; target of Rs 755: Finquest

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26 Aug, 2025 12:21

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Finquest's reserach report on RaymondThe company is focusing on building its brands and has been incurring higher promotional expenses over the past year or so. On the other hand it is also revamping its stores to give a new shopping experience for the customer which could keep the margins under a leash in the near term. The company's continued thrust on initiatives like the Made to Measure concept, linen line and B2C shirting business would be the areas of growth for RYMD. On the other hand the continued brand building and store renovations are expected to boost the profitability of theapparel business going ahead.Owing to a lower RoE and weak margin profile of the company, Raymond even though a legacy brand continues to trade at a discount to some of its branded peers. However, as the company continues its brand building initiative and revamps showrooms, its apparel business should do well going ahead. Garmenting which has shown a declining trend off late should benefit from the INR depreciation while Tools and Hardware business has started to show some recovery. Further, the declining interest rates should aid the company in lowering the interest outgo. We value the core operations of the company at a P/E of 14x FY17E earnings, which comes to Rs 470/share while the land bank at Thane is valued at a 40% discount to the expected market  value at Rs 275/share giving a combined price target of Rs 755 for FY17E. Any stake sale of its non-core businesses like the auto components /tools & hardware and any new development on the Thane land could be a major positive for the stock price.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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