RAYMONDLSL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 2.6

📊 Financials: Raymond Lifestyle (RAYMONDLSL) has reported quarterly PAT of ₹68.6 Cr vs a loss of ₹1.65 Cr previously, showing recovery but with volatility (-11.4% profit variation). EPS at ₹8.58 is modest relative to price. ROE at 0.50% and ROCE at 2.10% reflect very weak capital efficiency. Debt-to-equity ratio of 0.22 indicates low leverage, supporting balance sheet stability. Dividend yield is 0.00%, offering no income support.

💹 Valuation: Current P/E of 113 is extremely high compared to industry PE of 19.1, suggesting steep overvaluation. Book value ₹1,567 vs CMP ₹1,069 implies the stock trades below book value, but weak profitability undermines this advantage. PEG ratio of 3.07 highlights valuation ahead of earnings growth. Intrinsic value appears lower than CMP, signaling caution.

👔 Business Model: Raymond Lifestyle operates in textiles, apparel, and branded fashion retail. Competitive advantage lies in brand recognition and diversified product portfolio. Risks include cyclical demand, margin pressures, and competition from domestic and global apparel players.

📈 Entry Zone: Technically, support lies near ₹860–₹950. CMP at ₹1,069 is below DMA 50 (₹1,133) and DMA 200 (₹1,284), indicating weakness. Entry is advisable only closer to ₹900 for margin of safety.

📌 Long-term Holding: Given weak return ratios, high valuation, and earnings volatility, long-term holding requires caution. Investors should wait for sustained profitability and margin improvement before committing to extended positions.

Positive

• 📈 Recovery in quarterly PAT (₹68.6 Cr vs loss of ₹1.65 Cr).
• 📊 Low debt-to-equity ratio (0.22) ensures financial stability.
• 👔 Strong brand presence in textiles and apparel industry.
• 📉 CMP below book value (₹1,567), offering potential intrinsic value support.

Limitation

• ⚠️ Extremely high P/E ratio (113) compared to industry average (19.1).
• 📉 Weak ROE (0.50%) and ROCE (2.10%) reflect poor capital efficiency.
• 💸 No dividend yield (0.00%) offers no income support.
• 📉 Quarterly profit variation (-11.4%) signals earnings volatility.

Company Negative News

• 📉 Decline in DII holdings (-0.37%) indicates reduced domestic institutional confidence.

Company Positive News

• 📈 Increase in FII holdings (+0.19%) shows marginal foreign investor support.

Industry

• 👔 Textile and apparel sector trades at industry PE of 19.1, highlighting Raymond’s premium valuation.
• 📊 Industry growth supported by rising fashion demand and retail expansion, but competition remains intense.

Conclusion

⚖️ Raymond Lifestyle is fundamentally weak with poor return ratios and steep valuations despite brand strength. Entry is advisable only near ₹860–₹950 support zones. Long-term holding requires caution unless profitability improves and valuations normalize.

Would you like me to extend this with a peer benchmarking overlay against apparel peers like Aditya Birla Fashion and Arvind Ltd to highlight comparative valuation and efficiency?