Raymond stock performance

Raymond Shares Surge 9%; BSE, NSE Seek Clarity on News Report

Raymond Ltd’s shares have surged following reports that the Indian conglomerate plans to list its apparel and real estate units by the end of 2025. The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are seeking clarification on these reports.

1. Stock Performance

1. • Share Surge: Raymond Ltd’s shares climbed by 9% on Tuesday, hitting a high of Rs 2,180.85 on the BSE. This represents an 8.61% increase in a single trading session. Over the past two weeks, the shares have risen by 16%, and they have gained 24% year-to-date.
   • Recent Movements: The stock’s recent performance is attributed to a Bloomberg report indicating that Raymond Group plans to list its apparel and real estate businesses separately by the end of 2025.

2. Bloomberg Report

1. • Listing Plans: According to the Bloomberg report, Raymond Group aims to list its apparel and real estate units within the next two years. The report has caused significant movement in the stock market, reflecting investor optimism.
   • Ex-Listing Status: Raymond Ltd’s shares began trading ex-Lifestyle business last month, with the demerged business expected to list on the stock exchanges soon, potentially on September 5, 2024.

3. Stock Exchange Queries

1. • Clarifications Sought: Both the BSE and NSE have requested clarification from Raymond Ltd regarding the Bloomberg report. The NSE specifically mentioned awaiting a response from the company.

4. Demerger and Future Prospects

1. • Demerger of Real Estate: Raymond has previously indicated plans to demerge its real estate business, which analysts estimate could take 15-18 months to complete. After the demerger, Raymond Ltd would focus solely on its engineering business.
   • Investor Guidance: Raymond Lifestyle (RLL) is anticipated to list on September 5, 2024. The company has projected a 12-15% revenue growth and aims to double its EBITDA to Rs 2,000 crore by FY28, reflecting a 19% CAGR. Additionally, it plans to reduce working capital to 60 days, targeting an annual free cash flow (FCF) generation of Rs 600-700 crore.

5. Real Estate Business

1. • Current Status: Raymond’s real estate business, particularly the Pokhran Road project in Thane, is performing well. Antique Stock Broking expects Raymond Realty to continue with a 25% CAGR in sales bookings and maintain an EBITDA margin of over 30%.

Advantages

1. Increased Investor Confidence: The planned listings could enhance investor confidence and attract more investment in Raymond Ltd’s units.
2. Potential Value Creation: Separate listings for the apparel and real estate businesses could unlock value and improve the operational focus of each unit.
3. Growth Projections: The company’s guidance for revenue growth and EBITDA doubling suggests strong future performance and profitability.

Disadvantages

1. Market Uncertainty: The uncertainty surrounding the demerger and future listings may lead to volatility in Raymond’s stock price.
2. Operational Complexity: The process of demerging and listing two separate businesses could involve significant operational challenges and costs.
3. Clarification Delays: Delays in providing clarity to the stock exchanges might affect investor sentiment and market stability.

Conclusion

Raymond Ltd’s shares have surged following reports of planned listings for its apparel and real estate units by 2025. The company’s positive projections and recent stock performance reflect strong investor optimism. However, the ongoing clarification process with the BSE and NSE, along with the complexities of the demerger, presents potential risks. Despite these challenges, Raymond’s strategic moves could enhance its market value and operational efficiency in the long term.

FAQs

1. Why did Raymond Ltd’s shares surge recently?

1. • The surge is attributed to a Bloomberg report suggesting that Raymond plans to list its apparel and real estate units separately by the end of 2025, boosting investor confidence.

2. What is the current status of the demerger and listings?

1. • Raymond Ltd’s shares began trading ex-Lifestyle business last month, with the demerged lifestyle business expected to list on September 5, 2024. The company plans to demerge its real estate business within the next 15-18 months.

3. What clarifications are the BSE and NSE seeking from Raymond Ltd?

1. • The stock exchanges are seeking clarification regarding the news report about Raymond’s plans for separate listings of its apparel and real estate units.

4. What are Raymond’s future growth projections?

1. • Raymond Lifestyle is projected to achieve 12-15% revenue growth and double its EBITDA to Rs 2,000 crore by FY28. The company also aims to generate an annual free cash flow of Rs 600-700 crore.

5. How is Raymond’s real estate business performing?

1. • The real estate business, particularly the Pokhran Road project, is performing well with expected sales growth of 25% CAGR and an EBITDA margin of over 30%.

Raymond stock performance

HP to Continue $4B Damages Case Against Mike Lynch’s Estate