MOSL Expects Nearly 50% Upside In Raymond Lifestyle As Co Likely To See Healthy Growth

Raymond Lifestyle Ltd. will likely see a healthy growth as the demand improved because of the festive and wedding seasons, Motilal Oswal Financial Services Ltd. said in a note on Wednesday. The company struggled earlier as the demand remained sluggish for last 12–15 months.

Motilal Oswal Financial Services Ltd. kept 'Buy' on Raymond Lifestyle Ltd. with unchanged target price at Rs 3,000. The target price implied an upside of 48.43% from Tuesday's closing price.

The brokerage estimates double digit growth around 12–14% in secondary sales and subsequent improved collection in the third quarter for Raymond Lifestyle. Meanwhile, demand improvement in primary sales will get reflected with a quarter lag due to higher inventory and demand weakness in past months.

The number of wedding days are extending into the second half of financial year 2026, which will keep the demand momentum robust. This will likely create a sweet spot for Raymond Lifestyle as wedding portfolio accounts for 35–40% of its total revenue.

Raymond Lifestyle is targeting 12–14% revenue growth and 15–18% Ebitda/PAT growth in medium term. The branded clothing segment will be the key growth driver with an increase in exclusive brand outlets and a ramp-up of Ethnix, and Raymond Lifestyle's entry into sleepwear and innerwear according to Motilal Oswal Financial Services.

Raymond Lifestyle is aiming to increase EBO count to 900 by financial year 2027 as brands like Park Avenue, ColorPlus and Ethnix could expand their presence to 300 stores each across Tier-1 to Tier-4 cities, Motilal Oswal Financial Services said.

Raymond Lifestyle may see an incremental revenue of Rs 300 crore by financial year 2027 from sleepwear and innerwear category, the brokerage said.

The company operates at 30% operational return on capital employed and the management expects to improve further. The improvement in demand and better collections , and moderation in the capital expenditure will help Raymond Lifestyle in the ROCE improvement.

A great opportunity for exports of Raymond Lifestyle's garmenting business is on the horizon due to turmoil in Bangladesh, and China+1 strategy, the brokerage said. India's free trade agreements with the UK, Europe, and Australia will also increase the scope of this opportunity.

Raymond Lifestyle is incurring a cumulative capex of Rs 200 crore between the period of financial year 2024 and 2025 to increase its capacity to take advantage of the export opportunity, the brokerage said.