Raymond stock crosses ₹3,000 mark as gains extend for 4th straight day, up 618% in 3 years

Continuing their bull run for the fourth straight day, shares of Raymond crossed the ₹3,000 mark for the first time in today's intraday trade to hit another fresh all-time high of ₹3,030 apiece by gaining 9%. Remarkably, the stock achieved this milestone in just 10 weeks after crossing the ₹2000 mark.

The rally in the stock has been fueled by a significant spike in delivery volumes over the last four sessions, averaging 200,000 shares compared to a typical 40,000.

This surge in delivery volumes was attributed to several key factors: growth in the real estate business, prospects of the textile sector PLI scheme, expansion in their ethnic wear segment—a rapidly growing brand for the company—and improvements in the balance sheet.

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Meanwhile, today's surge in shares has propelled them to achieve a 251% gain over the past two years and an impressive 618% increase in just three years.

Strategic shift

During FY24, Raymond Group sold its FMCG business and has now identified the core three businesses of lifestyle, real estate, and engineering as future growth pillars.

The company aims for rapid expansion of its ethnic wear brand 'Ethnix by Raymond', with plans to open 100 stores in FY25 following the launch of 53 stores in FY24, bringing the total count to 114. The Ethnix business is set for substantial growth, driven by the escalating scale of Indian weddings.

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According to a recent report by global brokerage firm Jefferies, the Indian wedding industry drives significant economic activity, with an average Indian spending twice as much on weddings compared to education.

With 8 to 10 million weddings annually, India stands as the world's largest wedding destination. Estimated at US$130 billion, the wedding industry in India is nearly double the size of that in the US and plays a crucial role in driving consumption across various sectors.

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Given its size and impact, weddings are pivotal growth drivers for several industries in India, including jewellery, apparel, catering, accommodation, and travel. For instance, bridal jewellery alone accounts for over half of the jewellery industry's revenues, while weddings and celebratory attire contribute to more than 10% of all apparel expenditures, according to the brokerage's analysis.

Aggressive growth plans for real estate development

The company is strategically expanding its real estate business. Raymond Realty, a subsidiary of Raymond, has recently secured its second redevelopment project in Bandra (East), expected to yield revenues exceeding ₹2,000 crore over the project's duration.

Raymond Realty had previously signed three JDAs in Bandra, Sion, and Mahim, with an estimated revenue potential of over ₹5,000 crore. With plans to broaden its real estate presence beyond Thane, Raymond aims to leverage an asset-light joint development model in the Mumbai Metropolitan Region (MMR).

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Revenue from Raymond's real estate division has shown consistent growth quarter over quarter. For the quarter ending in March, the division reported revenues of ₹677 crore, marking a 50% increase compared to ₹289 crore in the same period last year.

Transforming engineering division

Earlier this year, the company forayed into the sunrise sectors of aerospace, defence and EV components by acquiring a 59.25% stake in the business of MPPL.

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This move aims to transform Raymond's engineering division into a major player in engineering, automotive, electric vehicle (EV), aerospace, and defence components.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.