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Systematix Report
Raymonds Lifestyle Ltd.'s FY25 had shown soft performance on account of weak consumer sentiments. Margins had been impacted during the period due to scale deleverage. Q1 FY26 has witnessed recovery on a low base. Q2 FY26 saw high single digit growth with improved performance in the domestic business while international business faced headwinds.
Q3 FY26 witnessed improved growth in branded textile, steady performance in branded apparel while garmenting business continued to be impacted by US tariffs, however margin performance remained healthy for the company.
The brokerage anticipates FY26 to mark a steady recovery phase for the company with H2 FY26 benefitting from wedding and festive season. In Branded Textile, we expect revenue CAGR of 9.6% over FY25-FY28E, Ebitda margin shall expand to ~19% in FY28E from 14% in FY25.
For branded apparel, Systematix projects revenue CAGR of 14% over FY25-FY28E and operating margin expanding to 11% in FY28E from 7.4% in FY25. In Garmenting, the brokerage anticipates revenue CAGR of 2.6% over FY25-FY28E impacted due to US Tariffs, Ebitda margin shall expand to 8% in FY28E from 4.7% in FY25.
In high value cotton shirting, the brokerage expects revenue CAGR of 8.1% over FY25- FY28E with operating margin of 11.2% by FY28E.
Systematix projects a healthy growth trajectory for the company, building in a revenue/Ebitda/PAT CAGR of 9.7%, 33.6%, and 62.5% respectively over FY25–FY28E. The brokerage expects operating margins to expand steadily to 11.3% in FY26E, 12.6% in FY27E, and 13.7% in FY28E, supported by improving mix, scale benefits, and cost efficiencies.
Systematix has revised its target price to Rs 1,428 (earlier Rs 1,638) while maintaining its Buy rating. The valuation continues to be based on a SOTP framework, assigning 8x/10x/7x Dec‑2027E EV/Ebitda to the branded textiles, branded apparel, and B2B segments respectively.
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