Raymond Group Targets Doubling Real Estate Revenue in 5 Years

Raymond Group, a prominent Indian conglomerate, is setting ambitious targets for its real estate business. The company is looking to nearly double its topline from its soon-to-be-listed real estate division to Rs 4,000 crore over the next five years. This growth strategy is part of a broader plan to strengthen its market position and capitalize on the burgeoning real estate sector in India.

“We are looking at a topline growth of 15% and Ebitda (earnings before interest, taxes, depreciation and amortisation) growth of 25% every year,” said Gautam Singhania, chairman and managing director of Raymond Group, in an interaction with The Financial Express.

Raymond has already taken significant steps to achieve these goals. The company has demerged its real estate business and is planning to list it next month. This follows the successful demerger and listing of its lifestyle business. The real estate division, Raymond Realty, posted a profit before tax (PBT) of Rs 370 crore on revenue of Rs 2,313 crore in FY25, with a topline growth of 45.2%.

Singhania declined to comment on the valuations of the real estate company, stating that it would be determined through market discovery. However, he emphasized the company's commitment to strong financial discipline.

Currently, Macrotech (Lodha) is the biggest developer in Mumbai, with pre-sales of Rs 14,000 crore for FY25. Prestige Estates and Oberoi Realty follow with pre-sales of about Rs 5,000 crore each. Mumbai holds a significant 28% share in the total residential sales of 700,000 units a year in the top 10 cities, making it a crucial market for Raymond Realty.

Raymond Realty is currently debt-free at the net level, although Singhania acknowledged that it might be challenging to maintain this status in the coming years. “We want to be a strong company with good financial discipline,” he stated. Despite predictions of slower growth in residential sales due to price increases, Singhania remains bullish about the market. “Sales are doing well,” he added, noting that residential prices have grown by around 7-8% and are expected to see similar growth this year.

The company has a development potential worth Rs 25,000 crore in its Thane land and Rs 14,000 crore in joint development projects. These joint development projects are expected to account for 50% of annual pre-sales within two years. Raymond plans to launch two new projects on its own land in Thane and four new joint development projects in Mumbai in FY26.

In the fourth quarter of FY25, Raymond signed two joint development agreements in Mahim and Wadala in Mumbai, with a combined gross development value of Rs 6,800 crore. These strategic moves underscore the company's commitment to expanding its footprint in the real estate market and achieving its ambitious growth targets.