In view of its imminent listing on the stock exchange in the first week of September, Raymond Lifestyle Limited (RLL) is infusing a capex of Rs 200 crore to increase its manufacturing capacity for B2B business to 10 million units from the current capacity of 6.5 million units in the next 12 to 15 months.
The decision is targeted to encash on the opportunity for the Indian textile industry that has arisen in the wake of the political turmoil in global textile manufacturing hub Bangladesh.
The CEO and CFO of RLL Sunil Kataria claimed that the China+1 policy has started paying off and the recent turmoil in Bangladesh will further force the international brands to diversify their supply chain. India, being a stable democracy and the fastest growing major economy, is the best bet for the global brands. This development is expected to change things for good for the Indian textile players.
Kataria told mediapersons “The China+1 initiative has helped us grow at a faster rate, taking our exports to more than Rs 1,100 crore compared to Rs 600 crore pre-covid pandemic period while the EBITDA margins in exports grew to 10% against 6% during the same period. Additionally, the recent Bangladesh crisis will further alarm the international brands that desire stability and resilience in their supply chain. This may prove to be a very large opportunity for the Indian industry.”
Talking about the future plans for the domestic retail market after the demerger, Kataria said, “With a market share of 5% of the total market size, Raymond is the largest wedding player in the Rs 75,000 crore Indian market. As per our internal insights and industry reports, 92% of this market is unbranded. With the economic growth Indian weddings are becoming fatter and longer which is why we are aiming to transform this unbranded segment into branded to increase our market share up to 7%.”
It should be mentioned that the total size of the wedding market in India stands at Rs 11,00,000 crore. Clothing constitutes around 23% (Rs 2,50000 crore) of this market while the size of men’s wear market is expected to be around 30% of the overall clothing market making it’s size at about Rs 75,000 crore. As per the data provided by the company, only 8% of the men’s wedding wear market is captured by the brands.
Kataria also said, “In order to achieve the targets, we are deploying a multifold strategy to expand our production, our reach and the distribution network. Currently, Raymond has more than 1,000 stores spread across 660 cities. We are going to add around 650 to 700 more stores across all tiers of cities in the country. In the next 4 years, RLL is confident in achieving a revenue growth of around 12-15% while the profitability growth will be around 18-20%.”
He further said that the men’s ethnic wear brand Ethnix by Raymond, launched 18 months back, will focus on ethnic dresses around weddings. “The brand mainly focuses on party wear like kurta pajamas and sherwani. Ethnix already has 120 stores and we are planning to take this number to around 350-400 stores in the next four years. This expansion of stores is expected to take the sales for Ethix to around Rs 600-700 crores in the same time frame.”
RLL is also venturing into branded sleepwear and underwear so that the unbranded market around this demand can be captured. The CEO and CFO (Amit Agrawal) claimed that these segments of the market will provide high double digit disruptive growth and hold the potential for multi-fold growth in the coming years. “The sleepwear and underwear segment of the textile market is largely an unbranded segment with an opportunity to get a large multiplier effect. While the exact size of the segment is not known, it may be somewhere around Rs 12,000 crore to Rs 13,000 crore.”
From: financialexpress
Financial News
