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24-February-2017

The Raymond Group, owner of leading brands such as Raymond, Park Avenue, Parx and Color Plus, is looking to aggressively scale up its branded business with focus on a franchisee-led, asset-light model.

“We will certainly grow at over 20 per cent in our branded apparel business and will reach the double-digit EBIDTA margin in the next 12-24 months,” Sanjay Bahl, group CFO, Raymond said.

Currently, the branded business is barely managing to break even at the EBIDTA level. “Our focus is to shift towards a low capital-intensive, more efficient and franchisee-driven model," he said.

If the company is able to deliver on guidance, Raymond's branded apparel business can see an EBIDTA of Rs.2,00,220 crore by financial year 2019, and be valued at Raymond's current market capitalisation, at average industry multiples. Achieving this may not be difficult.

Recently, the company has set up an advisory board, which has Ravi Venkatesan, former chairman of Microsoft India and Cummins India, and Manish Chokhani, a capital market veteran and Enam Securities CEO. Raymond also has a branded textile fabric business which contributes nearly half of its sales. This division too, will benefit from the new strategy.

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