1
Jul 21, 2017
Raymond Ltd
Consumer Discretionary, Consumer Durables & Apparel
Raymond Ltd
India Research - Stock Broking
BUY
Bloomberg Code: RW IN
Recommendation (Rs.)
CMP 801
Target Price 935
Upside (%) 17
Stock Information
Mkt Cap (Rs.mn/US$ mn) 49154 / 764
52-wk High/Low (Rs.) 840 / 398
3M Avg. daily volume (mn) 0.9
Beta (x) 0.9
Sensex/Nifty 32029 / 9915
O/S Shares(mn) 61.4
Face Value (Rs.) 10.0
Shareholding Pattern (%)
Promoters 43.1
FIIs 8.2
DIIs 19.6
Others 29.1
Stock Performance (%)
1M 3M 6M 12M
Absolute 8 6 55 64
Relative to Sensex 5 (3) 31 42
Source: Bloomberg
Relative Performance*
Source: Bloomberg; *Index 100
Analyst Contact
Thomas V Abraham
040 - 3321 6277
thomas.abraham@karvy.com
For private circulation only. For important information about Karvy’s rating system and other disclosures refer
to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY<GO>,
Thomson Publishers & Reuters
Exhibit 1: Valuation Summary
YE Mar (Rs. Mn) FY15 FY16 FY17 FY18E FY19E
Net Sales 53745 51768 53913 59109 64823
EBITDA 4268 3873 3048 4213 5118
EBITDA Margin (%) 7.9 7.5 5.7 7.1 7.9
Net Prot 1128 855 300 1090 1685
EPS (Rs.) 18.4 13.9 4.9 17.8 27.5
RoE (%) 7.4 5.2 1.8 6.3 9.2
EV/EBITDA (x) 8.0 8.2 15.1 13.4 11.0
Source: Company, Karvy Research; *Represents multiples for FY15, FY16 & FY17 are based on historic market price
Moving Towards Increasing Profitability
Extending reach through asset light model: Raymond Ltd. has revamped 143
stores and added a net of 120 stores in the last 2 years. The main focus has been
the addition of EBOs, mostly in the franchisee (nearly 75% additions) model, thus,
enabling the company to extend its reach, particularly to the smaller cities, at lower
costs. Currently, Raymond has a total of 1,080 stores spread across Tier I, II, III and
IV cities in India.
Focus shifts to margin expansion: The company is setting up an additional
plant in Amravati for linen (capacity of 4 Mn meters, at a capex of ~Rs. 2000 Mn),
which is expected to be completed by Q4FY18E. Going forward, capex would be
mostly focused on stores (additions and renovations). Additionally, in the apparels
segment, ad spends should normalize to historic levels of ~6% vs elevated levels
of 7.5-8.5% seen during the expansion phase. Recently commenced Ethiopia plant
(for garmenting segment) will help improve operational eciencies as power and
labor costs are signicantly lesser to that in India.
Clarity on utilization of land bank to open new growth levers: Raymond
aims to utilize the land bank in Thane (125 acres) and is currently in the process of
acquiring approvals for the same. Monetizing/utilization of this land bank has the
potential to unlock signicant value in the long term. However, as we look forward for
management guidance regarding the utilization of land bank, we have not factored
the same in our estimates. More clarity on this is expected in the coming quarters.
Valuation and Outlook
Going forward, supported by increased reach and improvement in operational
eciencies, we factor revenue and EBITDA growth of 9.7% and 29.6% respectively
over FY17-19E. At CMP of Rs. 801 per share, we value the stock at 13.0x
EV/EBITDA FY19E and recommend “BUY”, with a target price of Rs. 935 per
share, with an upside potential of 17%.
Key Risks
Volatility in price of raw materials.
Delay in the implementation of the strategy for Thane land bank.
Lower demand pick-up.
80
100
120
140
160
180
Jul-16
Aug -16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Raymond Ltd
Sensex
2
Jul 21, 2017
Raymond Ltd
Company Background
Raymond Ltd., incorporated in 1925, is one of the largest
textile and apparel companies in India. The company
is headed by Mr. Gautam Hari Singhania, Chairman &
Managing Director. With a capacity of 38 Mn meters in wool &
wool-blended fabrics, Raymond commands over 60% market
share in worsted suiting in India. Other segments in its textile
business include Apparel (brands such as Park Avenue, Parx,
Colorplus), Garmenting division (Suits, Jackets & Shirts) and
Denim segment (through JVs). Raymond has a very wide
reach for its domestic textile business spread across 600 cities
through 160 wholesalers, 3,300 Multi Brand Outlets (MBOs),
800 Large Format Stores (LFS) and 1,080 The Raymond Shops
(TRS)/Exclusive Brand Outlets (EBOs). It also exports (20%
of revenues) to 55 countries including USA, Europe, Canada,
Middle East and Japan. Recently, it commenced a plant in
Ethiopia, at a capacity of 2.6 Mn pieces per annum to cater to
the markets in Europe and USA for their garmenting business.
The company’s Engineering business includes manufacture of
Files, auto components and marketing of tools.
Exhibit 2: Shareholding Pattern (%)
Source: BSE, Karvy Research
Exhibit 3: Segmental Revenue breakup (FY17)
Source: Company, Karvy Research
Balance sheet (Rs. Mn)
FY16 FY17 FY18E FY19E
Total Assets 49046 52349 55997 59942
Net Fixed assets 11608 11530 13677 14769
Current assets 28597 29616 30802 33140
Other assets 8841 11203 11518 12034
Total Liabilities 49046 52349 55997 59942
Networth 16722 16730 17624 19004
Debt 17442 17674 19128 20454
Current Liabilities 13261 16142 17302 18402
Other liabilities 1621 1803 1944 2081
Balance Sheet Ratios
RoE (%) 5.2 1.8 6.3 9.2
RoCE (%) 6.7 4.2 6.4 7.9
Net Debt/Equity (x) 0.4 0.4 0.5 0.5
Equity/Total Assets (x) 0.3 0.3 0.3 0.3
P/BV (x) 1.5 2.3 2.8 2.6
Source: Company, Karvy Research
Cash Flow (Rs. Mn)
FY16 FY17 FY18E FY19E
PBT 1320 519 1531 2364
Depreciation 1589 1569 1952 2107
Interest (net) 1285 1067 731 647
Ta x (492) (350) (430) (663)
Changes in WC (489) 638 (1395) (1941)
Others (42) 0 1322 782
CF from Operations 3172 3443 3710 3295
Capex (2222) (2779) (3980) (3214)
Others 114 583 777 839
CF from Investing (2108) (2196) (3203) (2374)
Change in Debt/Interest 339 (2453) 1465 1342
Dividends (221) (219) (197) (304)
Others (1298) 1456 (1913) (1943)
CF from Financing (1179) (1216) (644) (906)
Change in Cash (115) 31 (137) 15
Source: Company, Karvy Research
Company Financial Snapshot (Y/E Mar)
Profit & Loss (Rs. Mn)
FY16 FY17 FY18E FY19E
Net sales 51768 53913 59109 64823
Optg. Exp (Adj for OI) 47896 50865 54896 59705
EBITDA 3873 3048 4213 5118
Depreciation 1589 1569 1952 2107
Interest 1897 1780 1913 1943
Other Income 1190 1179 1182 1296
PBT 1320 519 1531 2364
Ta x 465 218 430 663
Adj . PAT 855 300 1090 1685
Profit & Loss Ratios
EBITDA margin (%) 7.5 5.7 7.1 7.9
Net margin (%) 1.7 0.6 1.8 2.6
P/E (x) 29.1 129.3 45.0 29.1
EV/EBITDA (x) 8.2 15.1 13.4 11.0
Dividend yield (%) 0.9 0.3 0.4 0.6
Source: Company, Karvy Research
Branded
Textiles
48.5%
Branded
Apparel
22.2%
Garmenting
11.1%
High value
cotton
shirting
9.1%
Auto
components
3.0%
Tools and
hardware
6.1%
Promoters
43.1%
FIIs
8.2%
DIIs
19.6%
Others
29.1%
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Jul 21, 2017
Raymond Ltd
Increasing presence through the an asset light model
Raymond, one of the most reputed textile brands in the country, is in the process of revamping its stores, and increasing their
presence further into Tier III & IV cities.
In the last two years, the number of stores has risen to 1080, from 960 in FY15 (TRS and EBOs). Currently, over 70% of stores
are through the franchisee model, which has helped the company increasing its footprints across the country, without extensive
capex. Going forward, the company plans to add 300 Mini-TRS in the next 2 years.
Additionally, up until Q4FY17, Raymond had renovated a
total of 143 stores. The new stores are yielding good results
and have witnessed like-to-like sales growth of over 20%.
We expect focus to now shift towards increasing protability.
Increased penetration and improved performance from
newly added stores will aid revenue and EBITDA growth
of 9.7% and 29.6% over FY17-19E, and EBITDA margin
improvement of 220bps.
Garmenting segment to remain competitive
USA, Europe and Japan, which constitute 80% of the exports for the suiting, jackets and shirting business, has been facing sti
competition from lower priced substitutes from China and Bangladesh. Raymond recently commenced a manufacturing unit
in Ethiopia, particularly aimed at exporting to US and Europe. Ethiopia has a trade agreement that allows exemption of import
duty to these two regions for a period of 10 years, and the company will be passing on the benet to the customers, making the
products of Raymond competitively priced. Additionally, the labor and fuel costs are also lower than in India (employee costs are
half at $70 per month vs $130-135 per month in India, and cost of power at Rs.2/unit vs Rs. 7-8/unit in India), thus enabling the
company to also improve on the margins for the segment.
Improving fundamentals
Raymond has expanded its capacity across the segments (Cotton Shirtings by 5 Mn meters and Denim by 8 Mn meters) in recent
times and expects to complete capex of Amravati plant by Q4FY18E. Despite capacity and store additions, the fundamentals
continue to be strong (net D/E of 0.4x). With no additional capex planned, and expected improvement in cash ow from FY19E
onwards, it can lead to signicant improvement in shareholder value in the long term.
New launches received well in the flagship textile business
Innovative product launches have been the main growth drivers for Raymond’s agship textile business and the recent
launches of Technosmart and Made-to-Measure (earlier categorized in the branded apparel segment) have been received well.
The aggrieves promotion of Made-to-Measure since FY15 has enabled revenues of Rs. 630 Mn in FY17, higher by 33.2% YoY.
Technosmart (launched in Q3FY16) recently clocked revenue of Rs.1000 Mn. The pricing point of the textile segment is higher
than the market by nearly 2 times and Technosmart is priced 1.5 times higher than the other Raymond brands (nearly 3.5 times
higher than the market). The good response to these new brands bodes well for the company’s textile segment. Management
expects these 2 divisions, along with new launches in technoseries and innovations such as increasing the tailoring eco-system
to be signicant growth drivers in this segment.
Vote against JK house sale, a major win for shareholders
Shareholders of Raymond (with an overwhelming majority of 97.7% of the shares casted) recently voted against the sale of JK
house to promoters and extended family at a substantial discount. The apartments were proposed to be sold at Rs. 9,200 per
square foot, a fraction of the current market rates, to four Singhania family entities. It is important to note that promoters cannot
vote on this resolution, as they are the interested parties to this transaction. Further, CMD of the company Mr Gautam Hari
Singhania has expressly mentioned in his press release led with stock exchanges that his personal opinion, “would be to vote
against the resolution in interests of the shareholders and company”.
Exhibit 4: Details of net store additions over the last few years are given below
FY13 FY14 FY15 FY16 FY17
TRS (The Raymond Shops including MTM*) 685 724 754 816 823
EBOs (Exclusive Brand Outlets) 208 189 206 235 257
Total 893 913 960 1051 1080
Source: Company, Karvy Research, *MTM (Made-to-Measure)
Source: Company, Karvy Research
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Jul 21, 2017
Raymond Ltd
Increasing product offerings in the branded textiles segment
Increase in consumer spending will have a positive impact on the branded textiles, which has been witnessing lower revenue
growth of 4.6% and 1.3% in FY16 and FY17 vs 25.3% growth in FY15. The healthy growth in FY15 is as a result of addition of
branded shirting starting that year (which now constitutes ~20% revenues from this segment). Wool prices have increased by
41.9% since FY15, and the increasing demand will enable the company to pass on the increase in raw material price to the end
consumer. Suitings, which constitutes nearly 80% to the segment, has margins in the range of 20% and above and thus, the
increase in demand for this segment, will be a key driver for overall improvement in protability.
Despite good sales from the shirting segment, poor demand scenario led to tepid growth of just 3% CAGR over FY15-17 for this
segment. However, recent additions, Made-to-Measure (shifted from branded apparels) and Technosmart are both witnessing
good traction and bodes well for the overall textile business. The company plans to add more products in this segment over the
coming quarters. We factor revenue growth of 5.0% CAGR over FY17-19E from this segment.
Apparels: In the course of stabilization, turnaround expected in due course
Raymond has added a net of 120 stores over FY16 and FY17 (with extensive focus on increasing EBOs - 51 of the total) thus,
expanding their reach further in India, and building brand value. Over FY15-17, revenue grew by 10.1% CAGR, but the operating
margins have declined 460bps to -2.4% FY17 in particular, was a tough year, as during the quarters of peak sales (Q2 and Q3
of FY17), demonetization led to lower demand and thus higher discounts in the fourth quarter (47% discount sales vs 30-32% in
regular years). With breakeven of newly added stores and lower ad spends (back to historic range of ~6%), we expect signicant
improvement in contribution to the overall bottom-line, from this segment.
Exhibit 5: Revenue & Revenue Growth Trend
Source: Company, Karvy Research
Exhibit 7: Revenue & Revenue Growth Trend
Source: Company, Karvy Research
Exhibit 6: EBITDA & EBITDA Margin Trend
Source: Company, Karvy Research
Exhibit 8: EBITDA & EBITDA Margin Trend
Source: Company, Karvy Research
20440
25620
26800
27140
1.8%
25.3%
4.6%
1.3%
0%
5%
10%
15%
20%
25%
30%
0
5000
10000
15000
20000
25000
30000
FY14
FY15
FY16
FY17
Revenue (Rs. Mn)
Revenue Growth (%)
4090
4620
4910
4010
20.0%
18.0%
18.3%
14.8%
0%
5%
10%
15%
20%
0
1000
2000
3000
4000
5000
FY14
FY15
FY16
FY17
EBITDA (Rs. Mn)
EBITDA Margin (%)
8850
10480
11510
12700
10.5%
18.4%
9.8%
10.3%
0%
5%
10%
15%
20%
0
3500
7000
10500
14000
FY14
FY15
FY16
FY17
Revenue (Rs. Mn)
Revenue Growth (%)
310
230
-20
-310
3.5%
2.2%
-0.2%
-2.4%
-4%
-2%
0%
2%
4%
-350
-250
-150
-50
50
150
250
350
FY14
FY15
FY16
FY17
EBITDA (Rs. Mn)
EBITDA Margin (%)
Garmenting segment: Commencement of Ethiopia plant is a major boost
Exports to USA, Europe and Japan contribute 80% of the revenue of the garmenting division. This segment has been witnessing
competition from China, for synthetic material, which oers a price point lower than that of Raymond. Recently, Raymond has
commenced operations in Ethiopia, a country that is exempt from import duty in US and Europe. Additionally, the company will also
5
Jul 21, 2017
Raymond Ltd
benet from lower operating costs via lower employee costs (at US$ 70/month vs US$130-135/month in India) and Power expenses
(Rs. 2/unit in Ethiopia vs Rs. 7-8/unit in India). We expect margins to show signicant improvement from second half of FY18E
onwards on increased capacity utilization.
High value cotton business
Through this segment, Raymond caters to Business to Business (B2B) customers for cotton shirting. The company is in the
process of setting up a plant in Amravati for linen (4mn meters) at a cost of Rs. 2000 Mn, which is scheduled to commence
operations in Q4FY18E. Current capacities stand at 26mn meters. Despite increase in cotton prices, operational eciencies
and good volumes helped more or less sustain growth in this segment (EBITDA margins improved by 160bps in FY17). Going
forward, we expect demand growth to aid the company to oset increase in cotton prices. We factor revenue growth of 13.5%
CAGR over FY17-19E. High value cotton accounts for 9.1% of the total revenues.
Engineering Segment
The company has presence in the Engineering segment through the auto components and Tools & Hardware division.
Auto Components
Auto components segment continues to maintain its good growth momentum and has seen improved protability over the last
few quarters, post the sale of forging business in FY16. The group’s auto ancillary division includes manufacture of ring gears,
Flex plates and shaft bearings. The company is looking to expand its reach across OEMs and has recently been nominated
for global supply for BMW. Raymond currently supplies explates to the BMW plant in Germany; other clients of the company
include Daimler Chrysler, Volkswagen and Toyota.
Tools & Hardware
JK les is one of the largest manufacturers of steel les in the world, and also has 65% market share in the domestic market.
The segmental performance has improved signicantly backed by improving operational eciencies and increased exports. We
expect the turnaround to continue post the restructuring.
Auto ancillaries and Engineering segments, combined, contributed 9.1% of the consolidated revenue as of FY17.
Exhibit 9: Revenue & Revenue Growth Trend
Source: Company, Karvy Research
Exhibit 11: Revenue & Revenue Growth Trend
Source: Company, Karvy Research
Exhibit 10: EBITDA & EBITDA Margin Trend
Source: Company, Karvy Research
Exhibit 12: EBITDA & EBITDA Margin Trend
Source: Company, Karvy Research
4190
5240
5940
6390
45.0%
25.1%
13.4%
7.6%
0%
10%
20%
30%
40%
50%
0
2000
4000
6000
8000
FY14
FY15
FY16
FY17
Revenue (Rs. Mn)
Revenue Growth (%)
560
410
500
440
13.4%
7.8%
8.4%
6.9%
0%
5%
10%
15%
0
200
400
600
FY14
FY15
FY16
FY17
EBITDA (Rs. Mn)
EBITDA Margin (%)
3370
4030
4670
5000
10.1%
19.6%
15.9%
7.1%
0%
5%
10%
15%
20%
25%
0
1000
2000
3000
4000
5000
FY14
FY15
FY16
FY17
Revenue (Rs. Mn)
Revenue Growth (%)
360
490
400
490
10.7%
12.2%
8.6%
9.8%
0%
3%
6%
9%
12%
15%
0
100
200
300
400
500
FY14
FY15
FY16
FY17
EBITDA (Rs. Mn)
EBITDA Margin (%)
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Jul 21, 2017
Raymond Ltd
Exhibit 13: Business Assumptions
Y/E Mar (Rs. Mn) FY16 FY17 FY18E FY19E Comments
Revenue 51768 53913 59109 64823
Backed by revival in the textile segment, and
continued good growth in the branded apparels
segment.
Revenue Growth (%) (3.7) 4.1 9.6 9.7
EBITDA 3873 3048 4213 5118
EBITDA Margins (%) 7.5 5.7 7.1 7.9
EBITDA margins to improve 220bps on better
operational eciencies and increased sales from
new stores.
PAT (normalized) 759 559 1090 1685
Fully Diluted EPS (Rs.) 18.0 10.0 17.8 27.5
Fully Diluted EPS Growth (%) (24.2) (44.3) 77.3 54.5
Net CFO 3172 3443 3710 3295
Capex (2222) (2779) (3980) (3214)
Capital expenditure from FY19E onwards is
expected to be largely limited to addition of stores
and renovations.
Debt 17442 17674 19128 20454
Free Cash Flow 950 664 (269) 81
Source: Company, Karvy Research
Exhibit 14: Karvy vs Consensus
Karvy Consensus Divergence (%) Comments
Revenues (Rs. Mn)
FY18E 59109 59761 (1.1)
Positive on growth but conservative on outlook.
FY19E 64823 67215 (3.6)
EBITDA (Rs. Mn)
FY18E 4213 4697 (10.3)
Cautiously positive on EBITDA growth.
FY19E 5118 5930 (13.7)
EPS (Rs.)
FY18E 17.8 17.9 (0.6)
Cautiously positive on PAT growth.
FY19E 27.5 31.0 (11.3)
Source: Bloomberg, Karvy Research
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Jul 21, 2017
Raymond Ltd
Exhibit 15: Revenue and Revenue growth
Source: Company, Karvy Research
Exhibit 17: PAT and PAT margin
Source: Company, Karvy Research
Exhibit 16: EBITDA and EBITDA margin
Source: Company, Karvy Research
Exhibit 18: RoCE & RoE (%)
Source: Company, Karvy Research
Revenue growth was muted for the period FY15-17, on account of poor
demand particularly for the textile segment. The company was not able
to pass on the impact of raw material price increase completely to the
customers on account of low demand. With increasing demand, and
launch of new innovative products, we expect revenue to grow by 9.7%
over FY17-19E.
We expect the improvement in EBITDA margins to trickle down further
to the PAT level and factor PAT margin improvement by 200bps over
FY17-FY19E.
Increased raw material prices, higher ad expenses had led to decline in
EBITDA margins over FY15-17. We expect the ad expenses to stabilize
and overall EBITDA margins to improve by 220bps to reach above 7% over
FY17-19E.
Demand pick up, asset light model and improved operational eciencies
should result in signicant improvement in return ratios over FY17-19E.
53745
51768
53913
59109
64823
17.0%
-3.7%
4.1%
9.6%
9.7%
-10%
0%
10%
20%
0
22000
44000
66000
FY15
FY16
FY17
FY18E
FY19E
Revenue (Rs. Mn)
Revenue Growth (%)
4268
3873
3048
4213
5118
7.9%
7.5%
5.7%
7.1%
7.9%
0%
4%
8%
12%
0
1400
2800
4200
5600
FY15
FY16
FY17
FY18E
FY19E
EBITDA (Rs. Mn)
EBITDA margin (%)
1128
855
300
1090
1685
2.1%
1.7%
0.6%
1.8%
2.6%
0%
1%
2%
3%
0
600
1200
1800
FY15
FY16
FY17
FY18E
FY19E
PAT (Rs. Mn)
PAT margin (%)
8.1%
6.7%
4.2%
6.4%
7.9%
7.4%
5.2%
1.8%
6.3%
9.2%
0%
2%
4%
6%
8%
10%
FY15
FY16
FY17
FY18E
FY19E
RoCE (%)
RoE (%)
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Jul 21, 2017
Raymond Ltd
Valuation & Outlook
Overall improvement in the domestic demand scenario, increased eciencies in the apparel and garmenting segments will aid
the company to recover from the poor performances in the last seen 2 years. We expect more clarity regarding the use of the
Thane land bank to come through in the next few quarters, and value the stock at 13.0x FY19E EV/EBITDA, arriving at a target
price of Rs. 935 per share, with an upside potential of 17%.
Exhibit 20: EV/EBITDA
Source: Bloomberg, Karvy Research
Key Risks
Volatility in price of raw materials.
Delay in the implementation of the strategy for Thane land bank.
Lower demand pick up.
50
200
350
500
650
800
0
2
4
6
8
10
12
14
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Avg 1yr Fwd EV/EBITDA
Avg+1SD
Avg -1SD
SD
Avg+2SD
Avg -2SD
Price (Rs.) (RHS)
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Jul 21, 2017
Raymond Ltd
Financials
Exhibit 21: Income Statement
YE Mar (Rs. Mn) FY15 FY16 FY17 FY18E FY19E
Revenues 53745 51768 53913 59109 64823
Growth (%) 17.0 (3.7) 4.1 9.6 9.7
Operating Expenses 49477 47896 50865 54896 59705
EBITDA 4268 3873 3048 4213 5118
Growth (%) (11.1) (9.3) (21.3) 38.2 21.5
Depreciation & Amortization 1619 1589 1569 1952 2107
Other income 921 934 819 1182 1296
EBIT 3570 3217 2299 3444 4307
Interest Expenses 2004 1897 1780 1913 1943
PBT 1567 1320 519 1531 2364
Tax 439 465 218 430 663
Adjusted PAT 1128 855 300 1090 1685
Growth (%) 4.8 (24.2) (64.9) 266.7 54.4
Source: Company, Karvy Research
Exhibit 22: Balance Sheet
YE Mar (Rs. Mn) FY15 FY16 FY17 FY18E FY19E
Cash & Cash Equivalents 1261 903 697 560 575
Trade receivables 9428 10448 10507 11518 12636
Inventory 10762 11732 12886 13348 14357
Loans & Advances 31 41 52 57 62
Investments 3844 4074 4323 4729 5186
Net Block 11781 11608 11530 13677 14769
Other assets 8872 10240 12353 12109 12358
Total Assets 45979 49046 52349 55997 59942
Current Liabilities 11881 13261 16142 17302 18402
Debt 16448 17442 17674 19128 20454
Other Liabilities 1710 1621 1803 1944 2081
Total Liabilities 30038 32324 35618 38374 40938
Shareholders Capital 613 613 613 613 613
Reserves & Surplus 15328 16109 16117 17011 18391
Total Networth 15941 16722 16730 17624 19004
Total Networth & Liabilities 45979 49046 52349 55997 59942
Source: Company, Karvy Research
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Jul 21, 2017
Raymond Ltd
Exhibit 23: Cash Flow Statement
YE Mar (Rs. Mn) FY15 FY16 FY17 FY18E FY19E
PBT 1567 1320 519 1531 2364
Depreciation 1619 1589 1569 1952 2107
Net Interest Expense 1659 1285 1067 731 647
Tax Paid (655) (492) (350) (430) (663)
Inc/dec in Net WC (204) (489) 638 (1395) (1941)
Others (186) (42) 0 1322 782
Cash ow from operating activities 3800 3172 3443 3710 3295
Inc/dec in capital expenditure (2238) (2222) (2779) (3980) (3214)
Others 840 114 583 777 839
Cash ow from investing activities (1399) (2108) (2196) (3203) (2374)
Inc/dec in borrowings (225) 339 (2453) 1454 1326
Dividend paid (143) (221) (219) (197) (304)
Interest paid (2132) (1875) (1979) (1913) (1943)
Others 0 577 3435 11 15
Cash ow from nancing activities (2500) (1179) (1216) (644) (906)
Net change in cash (99) (115) 31 (137) 15
Source: Company, Karvy Research
Exhibit 24: Key Ratios
YE Mar FY15 FY16 FY17 FY18E FY19E
EBITDA Margin (%) 7.9 7.5 5.7 7.1 7.9
EBIT Margin (%) 6.6 6.2 4.3 5.8 6.6
Net Prot Margin (%) 2.1 1.7 0.6 1.8 2.6
Dividend Payout Ratio (%) 16.3 21.5 25.5 14.9 14.9
Net Debt/Equity (x) 0.4 0.4 0.4 0.5 0.5
RoE (%) 7.4 5.2 1.8 6.3 9.2
RoCE (%) 8.1 6.7 4.2 6.4 7.9
Source: Company, Karvy Research
Exhibit 25: Valuation Parameters
YE Mar FY15 FY16 FY17 FY18E FY19E
EPS (Rs.) 18.4 13.9 4.9 17.8 27.5
DPS (Rs.) 3.3 3.6 1.9 3.2 5.0
BVPS (Rs.) 260.0 272.8 272.9 287.5 310.0
PE (x) 24.2 29.1 129.3 45.0 29.1
P/BV (x) 1.7 1.5 2.3 2.8 2.6
EV/EBITDA (x) 8.0 8.2 15.1 13.4 11.0
EV/Sales (x) 0.6 0.6 0.9 1.0 0.9
Source: Company, Karvy Research; *Represents multiples for FY15, FY16 & FY17 are based on historic market price
12
Jul 21, 2017
Raymond Ltd
Stock Ratings
Absolute Returns
Buy : > 15%
Hold : 5-15%
Sell : <5%
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