Raymond Lifestyle Limited — Q2 FY26 earnings call

Call held 29 Oct 2025

Management summary

Raymond Lifestyle Limited reported a robust Q2 FY26, driven by strong domestic demand in its Branded Textile and Branded Apparel segments, with total income growing 8% YoY. However, export operations faced headwinds due to US tariff actions, impacting margins in the Garmenting Export segment. The company is strategically investing in marketing and retail expansion, particularly in Branded Apparel, which temporarily compressed margins but is expected to yield double-digit margins at a higher revenue scale. Working capital days increased due to inventory build-up for the festive and wedding seasons.

Highlights

  • Total Income for Q2 FY26 grew 8% YoY to ₹1,865 crores.

  • EBITDA for Q2 FY26 was ₹259 crores, with a margin of 13.9%, growing 7% YoY.

  • H1 FY26 Total Income increased 12% YoY to ₹3,340 crores, with EBITDA up 15% to ₹381 crores.

  • Branded Textile segment revenue grew 10% to ₹937 crores in Q2 FY26, with EBITDA margin at 20%.

  • Branded Apparel segment revenue grew 11% to ₹491 crores in Q2 FY26, but EBITDA declined to ₹25 crores (from ₹57 crores YoY) due to increased marketing spend and new store costs.

  • Net debt stood at ₹246 crores as of September 30, 2025, and net working capital increased to 105 days from 97 days YoY.

  • The company plans to increase marketing spend in Branded Apparel by 20-25% in H2 FY26 compared to H1 FY26.

  • UK exports, currently at ₹150 crores annually, are targeted to double in the next 2-2.5 years, pending FTA enactment.

Concerns

  • US tariff actions impacting export operations and margins

Key financials

3 periods

Headline

  • Net Debt
    ₹246 Cr
  • Net Working Capital Days
    105 days

Q2 FY26

  • Total Income
    ₹1,865 Cr
    YoY +8%
  • EBITDA
    ₹259 Cr
    YoY +7%
  • EBITDA Margin
    13.9%

H1 FY26

  • Total Income
    ₹3,340 Cr
    YoY +12%
  • EBITDA
    ₹381 Cr
    YoY +15%

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 (Q2 FY26)
₹1,909 Cr Total
  • Branded Textile Segment ₹937 Cr 49.1%
  • Branded Apparel Segment ₹491 Cr 25.7%
  • Garmenting Export Segment ₹269 Cr 14.1%
  • High-Value Cotton Shirting Segment ₹212 Cr 11.1%

Guidance & targets

Profitability

  • Branded Apparel EBITDA Margin Profitability · after next year · Medium confidence early double digit margins
    This year and the next year are a strong build phase for our branded apparel segment and then we see a good margin as we have told early double digit margins, we should be able to see.

    — Amit Agarwal

Revenue

  • Branded Apparel Yearly Run Rate Revenue · next 2-2.5 years · Medium confidence ₹2,300-2,500 crores
    I don't want to get into that guidance. But I would really say it will take another two years to get there in that kind of time frame, two to two and a half years.

    — Amit Agarwal

Marketing Spend

  • Branded Apparel Marketing Spend H2 FY26 Marketing Spend · H2 FY26 · High confidence 20-25% more than H1 FY26
    in the second half what we have spent in the first half we are going to further increase by at least 20%-25% more in the second half of the year.

    — Amit Agarwal

Export Revenue

  • UK Sales Export Revenue · next 2-2.5 years · Medium confidence double from ₹150 crores
    So, we are doing close to INR150-odd crores of sales to UK. I think it has a very good potential to double itself in the next two to two and a half years.

    — Amit Agarwal

Policy Impact

  • UK FTA Full Benefit Policy Impact · H2 FY26 or FY27 · Low confidence full benefit
    So, I think most likely you would see in the '26, 27, maybe in the second half of the year or the following year, the full benefit or the really the benefit coming for the UK FDA.

    — Amit Agarwal

Working Capital

  • Net Working Capital Days Working Capital · norm for this business · Medium confidence 80-85 days

    Previously 60 days → 80-85 days

    I think 60 odd days was one we did in '22, '23. And after that, I think it is more like 80, 85 days is a norm for this business because of the larger working capital requirements, especially the inventory in the business.

    — Amit Agarwal

Risks & concerns

  • US tariff actions impacting export operations and margins

    high

    Softer quarter for export international operations due to recent US tariff actions, leading to reduced margins in Garmenting Export segment (Q2 EBITDA margin 5.4% vs 9.6% YoY).

    Management acknowledged

  • Global volatility and geopolitical tensions impacting exporters

    medium

    Macroeconomic conditions, geopolitical tensions, and shifting trade policies continue to challenge exporters.

    Management acknowledged

  • Subdued demand in export markets for high-value cotton shirting

    medium

    High-value cotton shirting segment saw a 7% YoY de-growth in Q2 FY26 revenue due to subdued demand primarily from export markets.

    Management acknowledged

  • Delay in UK Free Trade Agreement enactment

    medium

    Full benefits of the India-UK FTA are contingent on parliamentary enactment, which is expected to take 2-2.5 years, delaying the doubling of UK exports.

    Management acknowledged

  • Increased working capital requirements

    medium

    Net working capital days increased to 105 days (from 97 days YoY) due to inventory build-up for festive season and changes in export terms (FOB to LDP), with a new norm of 80-85 days.

    Management acknowledged

Q&A highlights

2 direct
Ethnix store expansion strategy and profitability Direct
So now the whole thought process very clearly is that these stores which are there, and we are careful in opening such stores which should do well. Second, we are also partnering with our TRSs as well as some of the large MBOs who can help us and support us in terms of our growth journey of the ethnix.

Reveals a strategic shift from aggressive EBO expansion to a more cautious, profitable approach leveraging existing distribution channels and focusing on Tier 1/2 cities.

Asked by Sameer Gupta

Branded Apparel margin recovery timeline and required scale Partial
So, I think what we are looking at is once you are in that range of INR2,400 crores, INR2,500 crores, INR2,300 crores, INR2,500 crores you should see the margins reaching to early double digits.

Provides a revenue threshold for margin recovery but the 'early double digits' margin target remains qualitative rather than a specific percentage.

Asked by Avinash Karumanchi

Increase in working capital days and deviation from target Direct
I think 60 odd days was one we did in '22, '23. And after that, I think it is more like 80, 85 days is a norm for this business because of the larger working capital requirements, especially the inventory in the business.

Clarifies the new 'norm' for working capital days (80-85 days) and explains the reasons for the current increase (inventory build-up for festive season, changes in export terms), indicating a revised expectation from the earlier 60-day target.

Asked by Ujjwal Lal

3 min read 7 chapters

Detailed narrative

Macroeconomic Environment and Domestic Demand

Despite global volatility and geopolitical tensions, the Indian economy is projected to grow at 6.8% GDP for FY26, driven by improved domestic demand and policy reforms like GST rationalization and income tax cuts. Management noted a positive shift in consumer behavior, with rising footfall and strong wedding season demand. The India-UK Free Trade Agreement is anticipated to fuel long-term growth in the textile sector, although its full benefits are expected to materialize in H2 FY26 or FY27.

Q2 & H1 FY26 Overall Financial Performance

Raymond Lifestyle Limited reported a total income of ₹1,865 crores in Q2 FY26, an 8% year-on-year growth. EBITDA stood at ₹259 crores, with a margin of 13.9%, reflecting a 7% YoY growth. For the first half of FY26, total income reached ₹3,340 crores, a 12% YoY increase from ₹2,985 crores in H1 FY25. H1 FY26 EBITDA was ₹381 crores, up 15% YoY from ₹331 crores, with a margin of 11.4%.

Branded Textile Segment Strength

The Branded Textile segment demonstrated strong performance, with revenue growing 10% to ₹937 crores in Q2 FY26, driven by festive season demand and strong bookings. EBITDA for this segment increased 16% to ₹188 crores, achieving a robust EBITDA margin of 20%. For H1 FY26, revenue grew 17% to ₹1,653 crores, and EBITDA surged 35% to ₹290 crores, with an improved margin of 17.6%, primarily due to better product mix and volume growth.

Branded Apparel & Ethnix Strategic Investments

The Branded Apparel segment's revenue grew 11% to ₹491 crores in Q2 FY26. However, EBITDA declined to ₹25 crores (from ₹57 crores YoY), with margins compressing to 5.2% (from 13% YoY). This was attributed to increased marketing spend and costs associated with new store openings. The Ethnix portfolio, with 139 stores, saw H1 FY26 growth of close to 11% from FY25 revenue of ₹100 crores. Management is rationalizing Ethnix store expansion, focusing on profitable locations and leveraging TRS/MBO channels, particularly in Tier 1 and 2 cities.

Export Business Challenges

The Garmenting Export segment reported a modest 4% YoY revenue growth to ₹269 crores in Q2 FY26, but its EBITDA margin significantly dropped to 5.4% (from 9.6% YoY) due to US tariff actions. H1 FY26 revenue for this segment was ₹466 crores, with EBITDA at a mere ₹7 crores and a margin of 1.5%. The High-Value Cotton Shirting segment experienced a 7% YoY revenue de-growth to ₹212 crores in Q2 FY26, primarily due to subdued demand in export markets. Management noted customers are in a 'wait and watch' mode regarding US tariffs, impacting order placements.

Retail Network Expansion and Working Capital

As of September 30, 2025, the company's store count increased by a net of 71 stores YoY to 1,663. In Q2 FY26, 19 new stores were opened, while 31 low-performing stores were exited. Net working capital days increased to 105 days as of September 30, 2025, compared to 97 days in September 2024. This increase was planned to build inventory for the festive and wedding seasons and also due to changes in export business terms (FOB to LDP), with management stating 80-85 days is now the norm for the business.

Outlook and Future Growth Drivers

Management remains optimistic about FY26 being a recovery year, despite global uncertainties. They plan to further increase marketing spend in the Branded Apparel segment by 20-25% in H2 FY26 compared to H1 FY26. The Branded Apparel segment is targeted to achieve early double-digit margins once it reaches a yearly run rate of ₹2,300-2,500 crores, expected in the next 2-2.5 years. UK exports, currently at ₹150 crores, are projected to double in 2-2.5 years, contingent on the India-UK FTA's enactment.

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