Raymond Lifestyle, which was spun off from the parent company as part of value unlocking exercise, is expected to debut at ₹4,927 per share with the market capitalisation of ₹30,000 crore on Thursday.
Broking firm Ventura Securities has classified the company’s revenue streams into four major verticals — wedding business, non-wedding branded business, garmenting and high value shirting business.
The broking firm said that if the sum of the parts valuation methodology is applied, RLL stock price translates to ₹6,420 a share, valuing it at an intrinsic market cap of ₹39,097 crore.
Noting that a significant re-rating is on the cards, Ventura has forecast EBITDA margins to double in all the four verticals, while revenues are expected to grow by double digits in three business verticals except for high-value shirting.
Growth drivers
The sale of non-core business and spinning off lifestyle and real estate business has turned Raymond a debt-free company. The move has also unlocked significant value for shareholders.
The wedding vertical is expected to be the largest growth driver for RLL in the next few years. In FY24, Raymond’s wedding revenue was at ₹2,477 crore with a blended EBITDA of ₹549 crore which contributed to over 38 per cent and 59 per cent of consolidated revenue and EBITDA, respectively.
Expecting similar growth to continue, Ventura expects aggressive revenue growth of over 20 per cent CAGR to sustain over the next 3-6 years.
Over FY24-27, it expects wedding revenues to grow at a CAGR of 19 per cent to ₹4,192 crore and EBITDA to grow at a CAGR of 18 per cent to ₹895 crore, the brokerage said in its report.
On RLL’s non-wedding branded business vertical, revenue growth is expected at a CAGR of 25 per cent to ₹4,951 crore by FY27E. EBITDA is expected to grow at a CAGR of 22 per cent to ₹660 crore, said the report.
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Published on September 4, 2024
https://www.thehindubusinessline.com/news/raymond-lifestyle-to-debut-on-bourses-at-4927-a-share/article68604874.ece
