Raymond Group: Bright Future in Real Estate and Textiles
Gautam Singhania, Chairman and Managing Director of Raymond Group, discusses the promising outlook for real estate and textiles. Despite recent challenges, the group is optimistic about growth in both sectors, driven by robust demand and favorable governm
Raymond GroupReal EstateTextilesMumbaiDevendra FadnavisReal Estate MumbaiDec 03, 2024
The last six months have been challenging for many industries, including Raymond. Factors like a lack of weddings and political elections have slowed down sales. However, the outlook for Q3 and Q4 is looking promising. Retail sales are currently vibrant, and the wedding season, which will continue until May next year, is expected to drive demand. An average wedding in India costs around ₹36 lakh, with 20% of that budget allocated to clothing.
Raymond has been actively involved in joint development agreements, with a significant project underway in Bandra. The group is excited about the real estate sector, particularly in Mumbai, where redevelopment is a major focus. Maharashtra’s strong mandate to the Mahayuti (BJP-Shiv Sena and NCP alliance) is likely to bring stability to the state for the next five years. This stability, combined with Chief Minister Devendra Fadnavis's focus on infrastructure development, is highly beneficial for the real estate sector.
Mumbai is undergoing a significant transformation, with numerous residential societies being redeveloped. The group aims to be a key player in this redevelopment process. The Securities and Exchange Board of India (SEBI) has recently approved Raymond’s real estate business for listing, which is expected to happen by the middle of next year, around August or September.
Unlike many property companies that have seen a dip in bookings, Raymond has not experienced any such headwinds. The group's focus on affordable luxury and the right product at the right price has ensured steady sales. The macro-level development in Mumbai, with the city set to be rebuilt, is another positive factor.
In the engineering business, Raymond is expecting a sales growth of 15% and EBITDA growth of 20% annually. The group is closely monitoring the aerospace and defence sectors for potential acquisition opportunities. The recent Boeing strike has impacted the industry, but with India's strong relations with the US and the potential return of Trump, there are opportunities for beneficial arbitrage between India and China. Any tariffs imposed by the US are likely to be more favorable for India compared to China, creating new opportunities for Indian companies.
The integration of JK Engineering and Maini has brought significant benefits, including reduced overheads and economies of scale. Both companies have similar business models, making the integration a natural fit and beneficial for both entities.
Despite the proxy advisory firms' recommendation to shareholders to oppose his appointment as executive chairman of Raymond Lifestyle, Singhania chose not to comment on the matter.
Overall, the future looks bright for Raymond Group, with strong prospects in both real estate and textiles.
Frequently Asked Questions
How has Raymond Group performed in retail sales recently?
Recent retail sales for Raymond Group have been vibrant, particularly in the clothing sector, driven by the ongoing wedding season and a favorable market environment.
What is Raymond Group’s approach to real estate development in Mumbai?
Raymond Group is actively participating in the redevelopment of residential societies in Mumbai, with a significant project already underway in Bandra and more in the pipeline.
What is the expected growth in Raymond’s engineering business?
Raymond Group is expecting a sales growth of 15% and EBITDA growth of 20% annually in its engineering business, driven by strategic investments and market demand.
How has the integration of JK Engineering and Maini benefited Raymond Group?
The integration of JK Engineering and Maini has reduced overheads and achieved economies of scale, making the combined entity more efficient and competitive.
What is the status of the listing for Raymond’s real estate business?
SEBI has approved the listing of Raymond’s real estate business, and the group is on track for it to happen by the middle of next year, around August or September.
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