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.