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.