Raymond Lifestyle Ltd, the demerged retail and lifestyle part of Raymond Ltd, is set to make its market debut today, September 5. It is the first phase of Raymond Ltd's scheme of arrangement, which will eventually result in three independent listed corporations. Raymond shares became ex-Lifestyle business in July, and the listing of the lifestyle company as a distinct corporation is expected to increase shareholder value.

Following today's Raymond Lifestyle listing, the Raymond Group would have two listed firms. On July 4, the Raymond board authorized a plan of arrangement for the demerger of the real estate company into Raymond Realty. The demerged firm RRL will be listed on the stock markets after receiving the requisite statutory/regulatory clearances.

Raymond has already submitted an application for an NOC under Regulation 37 with both stock exchanges.

"Post completion of all formalities for both the scheme of arrangements, there will be three listed entities in the Raymond Group i.e. Raymond Limited, Raymond Lifestyle Limited and Raymond Realty Limited," said Raymond on September 3.

According to Arihant Capital Markets, the ethnic wear industry is forecast to rise at an 8% CAGR by 2027, and Raymond Lifestyle intends to leverage on the altering dynamics, with the organized segment expected to equal the unorganized by 2027.

"The corporation also intends to treble its exclusive brand outlet (EBO) network in two years. Ethnix is projected to contribute 12-15 percent of the business, with a target of Rs 1,000 crore over the next five years, and they are trying to cut NWC from 76 to 60 days," it added.

According to Antique Stock Broking, Raymond Lifestyle intends to expand its branded apparel market by replicating the success of The Raymond Shop (TRS) across other brands. The firm intends to develop its exclusive brand outlets (EBOs) using an asset-light approach, with the goal of building 250-300 stores per brand over the next three years.

RLL's emphasis on its wedding portfolio, which accounts for 35-40% of revenue, both directly and indirectly, is projected to result in a 15% CAGR over the medium term. This increase is expected to be driven by distinct premium items and the expansion of its ethnic shop network. According to the brokerage, significant areas to watch include the growth of the branded apparel and ethnic portfolios, as well as performance in new categories like as innerwear and sleepwear.

Raymond Lifestyle is expected to expand its sales CAGR by 13% and its EBITDA by 15% between FY24 and FY27, according to the brokerage. Raymond Lifestyle is valued at Rs 18,000 crore based on fiscal year 27 projections.

Raymond Lifestyle's wedding division generated Rs 2,550 million in revenue during FY24. Amit Agarwal, Raymond Group's Chief Financial Officer, anticipates the company's EBITDA to double to Rs 2,000 crore over the next three years. "We are also targeting a 12-15% sales growth in the lifestyle sector, with the aim of capturing around 7% market share in the dynamic men's-wear wedding market by 2027," he stated.

MOFSL, which attended Raymond Lifestyle's investor meeting, stated that Raymond Lifestyle spent Rs 100 crore in FY24 to boost production capacity to 10.7 million pieces. The firm intends to invest an extra Rs 100 crore in FY25, which is estimated to yield Rs 400 crore of additional income by FY27, reflecting Raymond Lifestyle's wedding division generated Rs 2,550 million in revenue during FY24. Amit Agarwal, Raymond Group's Chief Financial Officer, anticipates the company's EBITDA to double to Rs 2,000 crore over the next three years. "We are also targeting a 12-15% sales growth in the lifestyle sector, with the aim of capturing around 7% market share in the dynamic men's-wear wedding market by 2027," he stated.

MOFSL, which attended Raymond Lifestyle's investor meeting, stated that Raymond Lifestyle spent Rs 100 crore in FY24 to boost production capacity to 10.7 million pieces. The business intends to invest an extra Rs 100 crore in FY25, which is estimated to yield Rs 400 crore in incremental revenue by FY27, resulting in a 2x asset turnover ratio. Assuming a 10% Ebitda margin, this might result in Rs 40 crore of additional Ebitda, with a post-tax incremental return on capital employed (RoCE) of 16 percent.

Raymond Lifestyle's revenue is expected to rise by 11% in fiscal year 24-27, according to MOFSL.

Raymond Lifestyle's factory in Vapi, Gujarat, is the largest at 112.6 acres and accounts for 45 percent of the suiting segment's income. According to InCred Equities, this plant is capable of producing high-quality suiting textiles at a range of prices. The company's other two suitable business premises are located in Chhindwara (100 acres) and Jalgaon (38 acres).

Raymond Lifestyle intends to open 300 more Ethnix outlets during the next two to three years. The management expects 1.5 times growth in FY27 and 2.3 times growth in FY30 compared to FY24 levels in its wedding business. This shows that this segment has the potential to generate considerable revenue growth.