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    Raymond Lifestyl

    RAYMONDLSLMixed
    Textiles·13 May 2025
    Management Summary

    Raymond Lifestyle Limited reported a subdued Q4 FY25 performance with a 9% YoY revenue decline, primarily due to weak consumer demand and a significant ransomware attack impacting operations for 25-26 days. Annual FY25 results also reflected these challenges, with an EBITDA margin of 10.2%. Despite the headwinds, the company remains net debt-free and expects a strong recovery in FY26, driven by improving consumer sentiment, restocking by dealers, and benefits from strategic initiatives like FTA and Ethnix store expansion.

    Highlights

    8
    • Q4 FY25 Revenue declined by 9% YoY to ₹1,580 crores from ₹1,728 crores in Q4 FY24, impacted by weak demand and a ransomware attack.

    • FY25 Annual Revenue stood at ₹6,360 crores with an EBITDA of ₹651 crores, resulting in an EBITDA margin of 10.2%.

    • Branded Textile segment revenue fell 21% YoY to ₹727 crores in Q4 FY25, with EBITDA margin contracting to 7% from 21.8% in Q4 FY24.

    • Branded Apparel segment revenue declined 4.4% YoY to ₹391 crores, and EBITDA margin significantly dropped to 0.4% from 13.5% in Q4 FY24.

    • High Value Cotton Shirting segment reported a strong Q4 FY25 EBITDA margin of 33.1% due to a one-time subsidy of ₹53 crores.

    • The company maintains a net debt-free position with net cash of ₹90 crores as of March 31, 2025, and improved net working capital to 87 days.

    • Management anticipates FY26 to be a year of recovery, targeting 10-15% revenue growth and a return to a 14-15% EBITDA margin for the lifestyle business.

    • The ransomware attack in Q4 FY25 resulted in an estimated sales loss of ₹250 crores and an EBITDA impact of ₹70-80 crores, with recovery expected over 6-8 months.

    Concerns

    2
    • Weak Consumer Demand

    • Ransomware Attack

    What Changed2

    vs Q1 FY26

    Guidance items9 → 6 (-3)Risks discussed5 → 4 (-1)
    Key financials

    Metrics

    6

    Periods

    3

    Headline

    2
    • Net Cash
      ₹90 Cr
    • Net Working Capital Days
      87 days

    Q4 FY25

    1
    • Revenue
      ₹1,580 Cr
      YoY-9%

    FY25

    3
    • Annual Revenue
      ₹6,360 Cr
    • Annual EBITDA
      ₹651 Cr
    • Annual EBITDA Margin
      10.2%

    Segment breakdown

    • Branded Textile₹727 Cr46.9%
    • Branded Apparel₹391 Cr25.2%
    • Garmenting₹248 Cr16.0%
    • High Value Cotton Shirting₹185 Cr11.9%
    Donut· Share of Q4 FY25 Revenue

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue
    FY26 Revenue Growth
    10-15%
    Medium
    Store Expansion
    Ethnix Store Count
    300 stores
    High
    Profitability
    Lifestyle Business EBITDA Margin (steady state)
    14-15%
    High
    Profitability
    Branded Textile EBITDA Margin (steady state)
    20-22%
    High
    Business Growth
    Garmenting UK Business Growth (post-FTA)
    30-40%
    Medium
    Recovery
    Overall Business Recovery
    very good recovery
    High

    Risks & concerns

    5
    RiskSeverity

    Weak Consumer Demand

    Consumer spending remained weak in Q4 FY25, impacting discretionary spending and leading to lower sales across segments.Management acknowledged

    high

    Ransomware Attack

    Disrupted operations for 25-26 days in Q4 FY25, causing an estimated ₹250 crores sales loss and ₹70-80 crores EBITDA impact, with full recovery expected in 6-8 months.Management acknowledged

    high

    Inflationary Pressures

    Elevated Consumer Price Index, driven by higher food and fuel prices, impacted discretionary spending throughout FY25.Management acknowledged

    medium

    Store Profitability & Expansion Pace

    New EBOs and Ethnix stores took longer than anticipated to break even due to weaker demand, leading to a more calibrated approach for FY26 store openings.Management acknowledged

    medium

    Areas of Evasion(1)

    • specific FY26 margin percentage

    Q&A highlights

    3

    “Yes. So, we have crossed Rs. 100 crores threshold... over the next 36 months we will get to a level of 300 stores... we will go more and more to a franchisee-led store than a Company-led store, because now the whole business model is fully established.”

    Reveals specific sales figures for the new Ethnix segment, future store expansion targets, and a strategic shift towards a franchisee-led model for capital efficiency.

    asked by Sameer Gupta, India Infoline

    3 min read8 chapters

    Detailed Narrative

    01

    Q4 FY25 Performance Overview

    Raymond Lifestyle Limited reported a challenging Q4 FY25, with revenue declining by 9% year-on-year to ₹1,580 crores from ₹1,728 crores in Q4 FY24. This subdued performance was primarily attributed to weaker consumer demand and the significant impact of a ransomware attack that disrupted operations for 25-26 days. The attack led to temporary system outages and supply chain delays, affecting sales and overall profitability during the quarter.

    02

    FY25 Annual Financials and Macroeconomic Context

    For the full fiscal year 2025, the company recorded a total net income (revenue) of ₹6,360 crores and an EBITDA of ₹651 crores, resulting in an EBITDA margin of 10.2%. The annual performance was influenced by persistent weak consumer spending, prolonged heatwaves, general elections, fewer wedding dates, and inflationary pressures. Management noted India's GDP growth at 6.5% for FY25 but highlighted elevated CPI and lower CAPEX impacting discretionary spending.

    03

    Segmental Performance Review

    The Branded Textile segment saw a 21% revenue decline to ₹727 crores in Q4 FY25, with EBITDA margin contracting sharply to 7% from 21.8% in Q4 FY24, largely due to demand weakness and the ransomware attack. Branded Apparel revenue decreased 4.4% to ₹391 crores, and its EBITDA margin fell to 0.4% from 13.5%. The Garmenting segment's revenue was stable at ₹248 crores, with an improved EBITDA loss of 2.9% compared to 12% in Q4 FY24. High Value Cotton Shirting revenue declined 13.14% to ₹185 crores, but its EBITDA margin surged to 33.1% due to a one-time📎 subsidy of ₹53 crores.

    04

    Ransomware Attack Impact and Recovery

    The ransomware attack in Q4 FY25 caused approximately 25-26 days of operational disruption, leading to an estimated sales loss of ₹500 crores, of which 50% (₹250 crores) was recovered within the quarter. The remaining balance is expected to be recovered over the next six to eight months. The profitability impact was quantified at roughly ₹70-80 crores on EBITDA, which management believes would have been better without this incident. The IT team, with cyber security experts, successfully restored normalcy.

    05

    Ethnix Business Update and Store Strategy

    The Ethnix by Raymond brand has now surpassed ₹100 crores in FY25 sales and operates over 150 stores, with 34 net additions during the year and only 10 closures. The company aims to expand the Ethnix store network to 300 stores over the next 36 months. A strategic shift is underway to transition towards a more franchisee-led store model, moving away from company-led stores, as the business model is now fully established and accepted in the market.

    06

    Outlook and FY26 Growth Trajectory

    Management expressed optimism for FY26, anticipating it to be a year of recovery and a return to a growth trajectory. Early signs include a 12-13% growth in textile and apparel bookings for FY26 compared to last year. The company targets a revenue growth of 10-15% (or slightly higher) for FY26. Steady-state EBITDA margins are expected to be in the range of 20-22% for Branded Textile and 14-15% for the overall lifestyle business, driven by improving consumer demand and restocking.

    07

    FTA Benefits and Garmenting Expansion

    The Garmenting segment is poised to benefit significantly from the Free Trade Agreement (FTA) between the UK and India. Currently, 20-22% of the garmenting business is with the UK, and management expects this to grow by 30-40% over the next two years as supply chains realign. The company is also expanding its capacity and client base, having added over 20 new clients in FY25 across the US, UK, and Europe, aiming to become one of the largest suit makers worldwide.

    08

    Working Capital Management and Balance Sheet

    Raymond Lifestyle Limited maintained a net debt-free position with net cash of ₹90 crores as of March 31, 2025. The company demonstrated improved working capital management, with net working capital days reducing to 87 days (amounting to ₹1,473 crores) in March 2025, down from 89 days (₹1,553 crores) in December 2024. This improvement was primarily driven by a reduction in trade receivables and inventory, reflecting a continued focus on optimizing working capital.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.