Raymond Lifestyle Limited — Q1 FY26 earnings call

Call held 7 Aug 2025

Management summary

Raymond Lifestyle Limited reported a strong Q1 FY26 performance, driven by robust growth in its Branded Textile and Branded Apparel segments, despite a challenging macroeconomic environment and US tariff impacts on its Garmenting business. The company focused on strategic product innovations, retail network optimization, and leveraging the India-UK FTA for future growth. Management expressed optimism for a stronger FY26, particularly in the latter half, supported by promising forward bookings and internal efficiency drives.

Highlights

  • Total income reached ₹1,475 crores, marking an 18% year-on-year growth.

  • EBITDA stood at ₹122 crores, a 36% year-on-year increase, with an EBITDA margin of 8.2%.

  • Branded Textile segment revenue grew 27% to ₹716 crores, with EBITDA almost doubling to ₹103 crores and margins at 14.3%.

  • Branded Apparel segment revenue increased 22% to ₹370 crores, achieving an EBITDA of ₹19 crores and a 5% margin.

  • Garmenting segment revenue declined to ₹197 crores, resulting in an EBITDA loss of ₹8 crores due to US tariff uncertainty.

  • High-value Cotton Shirting segment revenue grew 10% to ₹205 crores, with EBITDA at ₹20 crores and a 9.5% margin.

  • Net debt was ₹55 crores as of June 30, 2025, with working capital days increasing to 90 days due to inventory build-up for the festive season and garmenting export delays.

  • The company exited 35 underperforming stores during the quarter, with a net increase of 135 stores year-on-year to 1,675.

Concerns

  • US tariff imposition and uncertainty impacting Garmenting exports

Key financials

  1. Total Income ₹1,475 Cr +18%YoY
  2. EBITDA ₹122 Cr +36%YoY
  3. EBITDA Margin 8.2%
  4. Net Debt ₹55 Cr
  5. Net Working Capital Days 90 days

What they filed

Q1 FY27: revenue up 0.5%, net profit down 1650.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,315 1,340 1,143 1,106 1,457 +11%1,466 +9%1,327 +16%1,111 +0%
EBITDA172 152 5 73 183 +6%203 +34%84 +1580%51 −30%
Net profit26 53 -64 -2 65 +150%49 −8%-61 +5%-35 −1650%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹1,488 Cr Total
  • Branded Textile ₹716 Cr 48.1%
  • Branded Apparel ₹370 Cr 24.9%
  • High-value Cotton Shirting ₹205 Cr 13.8%
  • Garmenting ₹197 Cr 13.2%

Guidance & targets

Capex

  • Total CAPEX Capex · FY26 · High confidence ₹175-200 crores
    We intend to put anything between Rs. 175 to 200 crores of CAPEX, of which let's say 55%-60% is a maintenance CAPEX.

    — Amit Agarwal, Group CFO

  • Garmenting Line Expansion CAPEX Capex · FY26 · High confidence ₹40-45 crores
    I think Rs. 40-45 crores will go into the garmenting, which is the expansion of the line, which we talked about earlier. That is continuing expansion in Andhra Pradesh and balance is little bit on the IT side.

    — Amit Agarwal, Group CFO

Profitability

  • Branded Textile EBITDA Margin Profitability · FY26 · Medium confidence around 20%
    I think the Branded Textile business will be in that range of around the 20% which we have talked about all along.

    — Amit Agarwal, Group CFO

  • Garmenting EBITDA Margin Profitability · FY26 · Medium confidence 7-9%
    And the garmenting business, it is largely dependent upon the volume because you have a large workforce who works there. Once the order is pushed out, shipped out, then you get the operating leverage, which is also in the range of 7%-8%-9% margin.

    — Amit Agarwal, Group CFO

  • Overall EBITDA Margin Profitability · FY26 · High confidence significantly better than Q1
    No. I think you can expect a better margin than, you can see significantly better margin from the 1st Quarter. Because 1st Quarter, I would give you and I am not giving you a guidance, the past trend tells that the 1st Quarter is anything between 17%-18%-19%-20% of the total yearly revenue. And the fixed cost remains the same. The incremental revenue gives you an operating leverage which improves your EBITDA margin dramatically going forward for Q2, Q3, and Q4.

    — Amit Agarwal, Group CFO

Financial Performance

  • Overall Performance Financial Performance · 2026 · High confidence much stronger and a better year
    Definitely, 2026 will be a much stronger and a better year compared to 2025.

    — Amit Agarwal, Group CFO

Working Capital

  • Net Working Capital Working Capital · by December · High confidence positive cash
    Otherwise, on 31st March, we were sitting on a positive cash. And I think in the next two quarters, by December again, we will be sitting, because as I have told you earlier also, that the first and the second quarter is an inventory build and receivable build for the putting the product into the market to meet the festive demand as well as the wedding.

    — Amit Agarwal, Group CFO

Garmenting

  • UK FTA order translation Garmenting · next 12-15 months · Medium confidence orders translating
    And it is a journey and that is why I am saying, next 12-15 months you have to give this journey and then you would start seeing translation of orders.

    — Amit Agarwal, Group CFO

Ethnix Business

  • Profitability Ethnix Business · next 2-3 years · Medium confidence slow and steady growth, more profitable and sustainable
    So, therefore, we want to do a slow and steady growth, but a more profitable and a sustainable growth.

    — Amit Agarwal, Group CFO

Risks & concerns

  • US tariff imposition and uncertainty impacting Garmenting exports

    high

    The Garmenting segment revenue was impacted by uncertainty on account of US tariff announcements, leading to an EBITDA loss of ₹8 crores.

    Management acknowledged

  • Global macroeconomic uncertainties and geopolitical tensions

    medium

    The global environment remains volatile with geopolitical tensions and shifting trade policies leading to uncertainty for exporters.

    Management acknowledged

  • Tepid consumer spending due to high inflation and cautious CAPEX

    medium

    Consumer spending continues to remain tepid this quarter, impacted by high inflation and cautious CAPEX as households focus on essentials over discretionary purchases.

    Management acknowledged

  • Competition in the Ethnix wear segment from organized and local boutique brands

    medium

    Increasing competition from both organized sector and local boutique brands is making the Ethnix business journey longer than initially anticipated.

    Management acknowledged

  • Increased working capital days due to inventory build-up and export delays

    low

    Net working capital stood at 90 days in June '25 compared to 83 days in June '24, mainly due to inventory build-up for festive season and garmenting export delays.

    Management acknowledged

Q&A highlights

3 direct
Ethnix store rationalization and post-Q1 performance Direct
I think, look, fundamentally, what we are doing at this juncture is relooking the entire portfolio of all the retail stores which are there, because at the end of the day, if the store and when you open a good number of stores, you will find some of the stores are not doing well, in spite of putting all the efforts. So, I think we have done a very calibrated approach, thereby and it is across the country.

Reveals the strategic approach to retail footprint optimization and the positive impact of recent initiatives like the garment exchange program on customer footfall and secondary sales.

Asked by Shreyansh Talesara

Impact of US tariffs on Garmenting business and India-UK FTA opportunities Direct
I think it's a very good point and glad that you asked this question. Because when the problem becomes so large, then the solution comes. Not that I can, had it been a 5%-7% tariff, no, people would say something you share, something will be shared by the retailer in the US. But when it is 50%, nobody has an ability to share.

Addresses a significant headwind for the Garmenting segment, outlining management's view on US tariff dynamics, potential for Ethiopian operations, and the long-term opportunity from the India-UK FTA, including new client interest.

Asked by Madhvendra Kumar

Consumer sentiment, internal levers for growth, and MBO performance Direct
But what we are focused on, look, markets are markets. I can't change the market. So, what I need to do is internally what is all the levers which I have, I need to utilize those levers in order to see how I can be, get a market share higher.

Highlights management's proactive strategy to counter cautious consumer sentiment by focusing on internal strengths like product innovation, market share gains, and effective communication, evidenced by 50% MBO volume growth and strong recent booking trends.

Asked by Abhijeet Kundu

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Driven by Branded Segments

Raymond Lifestyle Limited reported a robust Q1 FY26, with total income growing 18% year-on-year to ₹1,475 crores. EBITDA increased significantly by 36% to ₹122 crores, resulting in an improved EBITDA margin of 8.2%. This performance was primarily fueled by strong volume growth in the Branded Textile and Branded Apparel segments, despite the quarter being seasonally weakest.

Branded Textile and Apparel Segments Outperform

The Branded Textile segment saw a 27% revenue growth to ₹716 crores, with EBITDA almost doubling to ₹103 crores, pushing margins to 14.3%. This was attributed to higher wedding dates and new product launches. The Branded Apparel segment also performed well, with revenue up 22% to ₹370 crores and an EBITDA of ₹19 crores, maintaining a 5% margin, driven by increased marketing spend and broad-based growth across brands and channels.

Garmenting Segment Faces Headwinds, FTA Offers Future Potential

The Garmenting segment experienced a revenue decline of 21.8% to ₹197 crores and an EBITDA loss of ₹8 crores, primarily due to uncertainty from US tariff announcements. Management views the 50% tariff as a negotiation tactic and expects a settlement. The recently signed India-UK FTA is seen as a major growth opportunity, with two large customers already visiting facilities, and order translation expected within 12-15 months.

Strategic Retail Optimization and Product Innovation

The company continued its retail network optimization, exiting 35 underperforming stores while achieving a net increase of 135 stores year-on-year, bringing the total to 1,675. Product innovation, including new collections in Branded Textile and revamped offerings in ColorPlus, contributed to double-digit secondary sales growth and a 50% increase in MBO volume, by replacing imported fabrics with Raymond's products.

Working Capital and Capex Management

Net debt stood at ₹55 crores as of June 30, 2025, an increase from positive cash on March 31, primarily due to inventory build-up for the upcoming festive and wedding seasons and delays in garmenting exports. Management expects working capital to normalize, returning to a positive cash position by December. The planned CAPEX for FY26 is ₹175-200 crores, with ₹40-45 crores allocated for garmenting line expansion in Andhra Pradesh.

Outlook for FY26 and Consumer Sentiment

Management expressed confidence in a 'much stronger and a better year' for FY26, supported by promising Autumn-Winter '26 bookings. While consumer sentiment remains cautious, internal levers such as product innovation, market share gains, and effective communication are driving growth. Recent bookings (July 31-Aug 7) showed 20-25% like-to-like growth, indicating positive momentum.

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