Raymond

Raymond Limited's continuing operations, primarily comprising the Engineering business, reported a total income of INR601 crores in Q4 FY25, with an EBITDA of INR99 crores, achieving a margin of 16.4%. For the full fiscal year 2025, the total income stood at INR2,105 crores, with an EBITDA of INR335 crores and a margin of 15.9%. The company maintains a net debt-free status for its continuing operations, holding a net cash surplus of INR263 crores as of March 2025, with total gross debt at INR677 crores and cash and cash equivalents at INR940 crores.

The Engineering business, including Maini Precision, recorded sales of INR528 crores and an EBITDA of INR81 crores in Q4 FY25, with a margin of 15.3%. This represents significant growth from Q4 FY24 sales of INR234 crores and EBITDA of INR37 crores. While the domestic auto ancillary segment showed robust growth, export markets were subdued due to the European automotive slowdown and the Red Sea shipping crisis. The aerospace business is anticipated to gain momentum following the resolution of production issues by a major aircraft manufacturer, with the market outlook described as 'extremely bullish' due to substantial backlogs.

The Real Estate business has successfully demerged and is expected to list in Q2 FY26, with existing Raymond shareholders receiving one share of Raymond Realty for every share held. In Q4 FY25, the demerged segment reported a revenue of INR766 crores, a 13.1% increase year-on-year from INR677 crores in Q4 FY24, and an EBITDA of INR194 crores, up 13.4% YoY from INR171 crores, maintaining a healthy margin of 25.3%. The company also achieved bookings of INR636 crores in Q4 FY25, driven by various projects in Thane and Bandra.

Raymond Realty signed two new Joint Development Agreements (JDAs) in Mahim and Wadala during Q4 FY25, aggregating INR6,800 crores to its Gross Development Value (GDV). This brings the total potential revenue from the current Real Estate business to nearly INR40,000 crores, with INR25,000 crores from the Thane land parcel and INR14,000 crores from the JDA model. The company aims for a 20% year-on-year growth in booking values through its asset-light JDA business model and expects new project launches in Q3 and Q4 of the current year, with some Q2 launches possible in Thane.

Management highlighted a favorable macroeconomic environment, with inflation under control and the RBI having reduced interest rates by 50 basis points, with further cuts anticipated. The Indian economy is projected to grow approximately 6.5% in FY25. The union budget for FY25-26 is expected to boost urban consumption and housing demand. The real estate market in the MMR region is described as balanced, with supply not keeping pace with increasing absorption, leading to firming prices. Despite some recent geopolitical uncertainties, overall market sentiment remains positive.

For each JDA project, with a typical GDV of INR1,500-2,000 crores, the peak funding requirement ranges from INR250-400 crores. The company secures construction funding at competitive interest rates of 8-9.25% due to its strong credit rating. Construction contracts are awarded through a competitive bidding process, ensuring quality and cost efficiency, with the company utilizing multiple contractors beyond its initial capacity. The typical timeline from JDA signing to market launch ranges from 12 to 24 months, depending on the project type, with approvals and planning as intervening steps.