Raymond Lifestyle Ltd (RAYMONDLSL) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day and welcome to the Raymond Lifestyle Limited Q2 and H1 FY '27 earnings conference call, hosted by Motilal Oswal Financial Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to Mr. Avinash Karmonji from Motilal Oswal Financial Services Limited. Thank you and over to you, sir.
Avinash Karumanchi (Motilal Oswal Financial Services): Thank you, Ayesha. On behalf of Motilal Oswal Financial Services, I would like to welcome all the participants to Q2 and H1 FY '27 conference call of Raymond Lifestyle Limited. Today, we have with us from the senior management: Mr. Sathyaki Ghosh, Chief Executive Officer; Mr. E. C. Prasad, Chief Financial Officer; Mr. Salil Bawa, Group Head and Investor Relations; and Mr. Sunny Desha, Head Investor Relations. Without taking further time, I would like to hand over the call to Mr. Sathyaki Ghosh. Over to you, sir.
Sathyaki Ghosh (Raymond Lifestyle Ltd): Good evening everyone. Thank you for joining us today in our Q2 FY '27 and H1 FY '27 results conference call. Before we review our operations and financial performance, let me contextualize the macroeconomic landscape in which we have operated over the first half of the fiscal year. We have navigated an intricate macroeconomic situation shaped by both international headwinds and domestic dynamics. Globally, persistent geopolitical tensions and ongoing shipping disruptions have kept Brent crude elevated in the range of $105 to $110 per barrel, sustaining input cost pressures across fibers, specialty dye chemicals are at high prices, and global freight tariffs remain high. At the same time, Indian rupee has traded near record lows, hovering between 94 and 95 against the US dollar, thereby increasing landed import cost of raw materials. Furthermore, the risk of US tariffs uncertainty continues to loom over us. Domestically, agriculture yield variations resulting from unseasonal rainfall patterns and localized heat events have generated intermittent swings in raw material crop material fiber supplies. Benchmark wool prices have remained firm near multi-year highs, and domestic cotton prices continue to be elevated. On the broader economic front, the Reserve Bank of India has revised India's FY '27 real GDP growth projections upwards to 7.1%, up from baseline estimates, reflecting strong domestic consumption, robust urban demand, and ongoing premiumization across lifestyle categories. Concurrently, the RBI CPI inflation projection was revised to 5.2% due to sticky input cost pressures. RBI has also increased the repo rate recently by 25 bps to 5.50%.
Sathyaki Ghosh (Raymond Lifestyle Ltd): solid operational resilience and stability despite navigating external headwinds in H1 FY27, including global freight escalations, raw material price pressures, channel mix variations, and late festive season. Our agile execution and deep consumer trust have kept us firmly on track to achieve our stated guidance for FY27. Our strategic focus anchored in premiumization, casualization, geographic diversification, and increased marketing investment, continues to deliver tangible results, while our garmenting export platform is capitalizing successfully on global trade realignments. In Q2 FY27, Raymond Lifestyle registered its highest ever quarterly total income of 2,125 crores, representing a robust 14% year-on-year growth compared to 1,865 crores in Q2 FY26. Revenue from operations reached 2,075 crores, up 13% year-on-year. For H1 FY27, total income grew 10% year-on-year to 3,685 crores, compared to 3,340 crores in H1 FY26. Consolidated EBITDA for Q2 FY27 rose 4% year-on-year to 270 crores versus 259 crores in Q2 FY26, achieving an EBITDA margin of 12.7%. For H1 FY27, EBITDA expanded 6% year-on-year to 404 crores with an 11% margin. While EBITDA margin moderated by 120 bps year-on-year in Q2 due to peak freight rates, elevated wool and cotton prices, and deliberate marketing investments ahead of the festive season, our enriched product mix provided substantial defensive support. Reported PBT before exceptional items was 91 crore for Q2 and 53 crore for H1 FY27. Net finance cost for Q2 FY27 was 25 crores against 27 crore last year, a reduction of 7%. Sequentially, Q2 FY27 witnessed 36% total income growth, 100% EBITDA growth, and 337% PBT growth over Q1 FY27. Which is a smart recovery, and the recovery continues. We maintained our fortified debt-free balance sheet, closing the quarter with a net cash surplus of 69 crores as of September 2026. This represents a significant operational turnaround and a net cash cash accretion of 300 crore plus compared to a net debt position of -246 crores in September 2025. Net working capital improved, our disciplined inventory management and tighter collection cycles yielded a 23-day reduction in our net working capital cycle, decreasing to 82 days in September 2026 compared to 105 days in September 2025. Absolute net working capital contracted from 1,870 crores to 1,622 crores despite a 240 crore sales jump. Our active retail footprint stands at 1,634 stores across 600+ towns and cities, comprising of 1,134 The Raymond Shops, 450 EBOs, and 50 Made to Measure stores. Over the past 12 months, we have methodically exited 53 lower productivity stores while opening 24 high yielding premium stores, which leads to a net rationalization of 29 stores, to drive throughput and return on capital. We remain firmly on track to achieve net 20+ store additions for the year, strengthening our retail footprint. As mentioned in our previous call, we have officially instituted a segment reclassification from this financial year to provide complete transparency on our core operations versus growth bets. We have carved carved out emerging businesses comprising of Ethnix by Raymond, Raymond Home, Park Avenue Innerwear, Sexual Wellness, and the newly launched Chairman's Collection into a stand-alone reporting segment. This now breaks up our business portfolio into five segments: Branded Textile, Branded Apparel, Garmenting, High Value Shirting, and Emerging Business. Branded Textiles, the revenue grew 7% year-on-year to 971 crores in Q2 FY27 versus 906 crores last year, taking H1 revenue to 1,650 crores, which is a +3% year-on-year growth. Growth was anchored by premiumization, volume expansion, and strong trade bookings leading into the wedding season. Segment EBITDA stood resilient at 188 crores in Q2 with an EBITDA margin of 19.3%. A favorable product mix
Sathyaki Ghosh (Raymond Lifestyle Ltd): its highest ever quarterly revenue of 559 crores in Q2 FY 27, up 20% year on year from 465 crores last year. And the H1 was 908 crores this year versus, which is a plus 14% year on year last year. Performance was propelled by volume expansion, spearheaded by our casual brands, ColorPlus and Park Avenue. Segment EBITDA rose 20% year on year to 49 crores in Q2 FY 27, with a stable margin of 8.8%. On account of adverse channel mix, higher raw material prices offset by closure of non-performing stores and higher marketing investments. This also shows a plus 60% growth sequentially over la- this year first quarter. Garmenting business continued its rapid export trajectory posting Q2 revenue of 339 crores, which is up 26% year on year and H1 revenue of 635 crores, which is up 36% year on year. Growth was driven by robust order execution following the US-India tariff rationalization, early market traction from UK-India FTA, and onboarding new global accounts, especially from Europe. EBITDA surged 75% year on year to 25 crores in Q2 with operating margin expanding by 207 bps to 7.4%. This also shows a plus 15% growth in garmenting business sequentially over Q1. High value cotton shirting revenue grew 5% year on year to 222 crores in Q2 FY 27 supported by strong linen demand and improved price rationalization. Segment EBITDA was 21 crore with an EBITDA margin of 9.5% predominantly due to increase in raw material prices, partially offset by higher ASPs. This is a plus 14% growth sequentially over this year Q1. Emerging businesses, for the first time touched 100 crores in Q2 FY 27, revenue grew 15% year on year. And the total turnover in H1 is now 179 crores of emerging business. Raymond Home registered double-digit growth and introduced a super premium line while innerwear expanded across channels. Ethnix rationalized 27 stores to transition towards an asset-light, high-productivity format. Segment EBITDA stood at negative 23 crores as these lifestyle categories continue in their planned incubation phase. This emerging business segment showcased a plus 27% sequential growth over Q1 of this year. The sequential growth overall in turnover for Q2 over Q1 was plus 36%. Marketing initiatives. We launched a few brand campaigns, such as ColorPlus's Live The Pause, Wedding On Wheels in Ethnix, and premium activations across Park Avenue and Raymond Ready-to-Wear for driving top of mind recall ahead of the festive season. A nationwide network of 1,600-plus exclusive retail stores, 20,000-plus MBOs and across 600-plus cities and 11 manufacturing plants gives us a real all India presence. We are also tracking towards a 15% reduction in Scope 1 and Scope 2 emissions, 25% renewable energy, up from 15.1% last year, zero waste to landfill, zero liquid discharge in Chhindwara. We are also targeting 40% female representation backed by 100% independent committee governance and 100% independent board. We have started our CSR programs in three big verticals of Project Neev, Project Good Neighbor, and Project We. As we progress into the high demand festive and wedding corridors of H2 FY 27, our strategic priorities are clear. Shifting fabric mix towards high margin pure wool and linen, launching new premium products across our formal brands, Park Avenue and Raymond Ready-to-Wear, this accelerates our premiumization strategy. We are also expanding smart casuals, polos, chinos, denims, featuring proprietary fabric technologies like Air Shield, FlexTech, and Technoclean. This helps in our casualization momentum and in casualization, our brand ColorPlus continues to accelerate faster than the rest of the portfolio. Deepening Tier 2 to Tier 4 penetration via MBOs remains, across businesses, remains a priority and scaling presence in LFS and digital channels is happening very fast and remains a priority. We are leveraging our vertically integrated B2B garmenting, including our verticalization with our mills to our garmenting factories to grow UK and EU markets via the newly signed FTAs. Retail network optimization
Sathyaki Ghosh (Raymond Lifestyle Ltd): avenues. And disciplined store opening is the name of the game. We've closed more stores in Q in H1 than we have opened, but in H2, we will open more stores than we close, and hence, we aim to end our store count at about plus 20 stores above our last year close. And this acceleration we will see next year. Next. Supported by our structurally debt-free balance sheet, 69 crore net cash surplus, and working capital cycle reduced to 82 days, Raymond Lifestyle is exceptionally well-positioned to navigate cost headwinds. We expect a strong H2 FY '27 performance and remain firmly on track to achieve our FY '27 guidance of double-digit top-line growth and mid-double-digit EBITDA growth with 300 crore plus of net cash and a double-digit growth in PBT. Thank you very much, and we are now open for questions.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avinash Karumanchi from Motilal Oswal Financial Services. Please go ahead, sir.
Avinash Karumanchi (Motilal Oswal Financial Services): Hi, sir. Good evening. Congrats on good set of numbers. So, my question is regarding the branded apparel segment. The segment has reported a very strong growth after many quarters.
Sathyaki Ghosh (Raymond Lifestyle Ltd): Thank you.
Avinash Karumanchi (Motilal Oswal Financial Services): So, how should we see this growth? Is it mainly because of the channel stocking that the festival actually shifted to third quarter or is it the secondary and primary also moving in?
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