Shares of Raymond are trading with gains of 12 percent on Tuesday, well above the mark of Rs 2,000 per share. The stock is trading at a record high. Two analysts have initiated coverage on the stock, both of which are expecting a potential upside of over 30 percent.

Share Market Live

NSE

Brokerage firm Jefferies initiated coverage on the stock with a buy rating and a price target of Rs 2,600. The brokerage said that Raymond has addressed past investor concerns on debt and corporate structure through concerted efforts.

The company is already net cash and is set to list its lifestyle and real estate business separately in the next 12 months, Jefferies said.

Category expansion, market share gains and premiumisation are proving the fact that the management is focused on growth, the note said.

Raymond recently sold its FMCG business along with the trademarks of Park Avenue, KS, KamaSutra and Premium on a slump sale basis to Godrej Consumer Products for Rs 2,825 crore.

Jefferies expects Raymond's revenue and earnings to grow at a compounded annual growth rate of 13 percent and 24 percent over the financial years 2023-2026.

Another brokerage initiating coverage on Raymond is Motilal Oswal, who also has a buy rating and a price target of Rs 2,600. The note said that the demerger of businesses and promoter capital infusion are key drivers for the stock.

Motilal Oswal believes that real estate is a key focus area and a growth driver for the company. Raymond Realty is targeting revenue of Rs 2,000 crore from its Mumbai project launch in the current financial year.

Raymond is likely to report revenue and operating profit Compounded Annual Growth Rate of 11 percent and 12 percent, respectively, over the financial years 2023-2027, according to Motilal Oswal, who further said that margin should improve by 190 basis points driven by operating leverage.

The Rs 2,600 price targets assigned by Jefferies and Motilal Oswal are the highest on the street for Raymond. All seven analysts who track the stock have a buy recommendation on the same.

Amit Agarwal, Group CFO, Raymond told CNBC-TV18, “Now with the demerger of the business and the sale of the FMCG happened already, we are sitting with Rs 1,500 crore of cash and with this Rs 1,500 crore of cash, which is going to be available for the growth of both the businesses.”

Shares of Raymond are trading 10.7 percent higher at Rs 2,189. The stock is up 50 percent this year after a 137 percent jump in 2022 and an 84 percent rise in 2021.

First Published:Sept 5, 2023 10:19 AM IST