Raymond Lifestyle had a strange kind of quarter. The tills were busier, shoppers walked out with more bags than they did a year ago, and festive stock filled the shelves. Yet when the company added up the numbers on Wednesday, the profit line had gone the other way.
The apparel and textile maker reported a net profit of Rs 68 crore for the three months ended September 30, down about 10 per cent from Rs 75 crore in the same quarter last year. Revenue from operations told a brighter story, rising 13 per cent to Rs 2,075 crore from Rs 1,832 crore. In short, Raymond Lifestyle sold a lot more. It just kept a lot less of each sale.
That gap is the story of this quarter. Cloth, yarn and finished garments all cost more to buy, freight cost more to move, and the festive rush meant stocking up early.
Costs rose faster than sales
Raw material costs rose by more than 23 per cent during the quarter, while spending on the purchase of finished inventory jumped 34 per cent. Total expenses climbed nearly 16 per cent to Rs 2,034 crore. That was enough to pull earnings before interest, tax, depreciation and amortisation down to Rs 220 crore from Rs 226 crore a year earlier, with the EBITDA margin narrowing to 10.61 per cent from 12.33 per cent.
Total income, which includes other income, grew 14 per cent to Rs 2,125 crore from Rs 1,865 crore. The company pointed to surging prices for yarn and cotton, along with supply chain disruption linked to the Middle East conflict, as pressure points for apparel makers through the quarter.
The result also marks a return to profit after a loss of about Rs 22.6 crore in the preceding quarter.
Shoppers still spent, and spent up
What held up was demand. The company credited premiumisation and casualisation, along with strong volume growth in branded apparel, for the revenue rise. Customers were buying more, and choosing better fabrics and more casual styles alongside formal wear.
Branded Textile, the fabric business at the heart of the Raymond name, reported revenue of Rs 971 crore, up 7 per cent from Rs 906 crore a year earlier. Festive channel buying and the shift towards premium products helped, and segment earnings rose slightly to Rs 188 crore from Rs 186 crore, although the margin slipped to 19.3 per cent from 20.6 per cent as input and freight costs bit.
Branded Apparel did the heavy lifting. It recorded its highest ever quarterly revenue at Rs 559 crore, up 20 per cent from Rs 465 crore, led by casualwear brands ColorPlus and Parx. Earnings in the segment rose to Rs 49 crore from Rs 41 crore, with the margin steady at 8.8 per cent. Closing non-performing stores helped offset a tougher channel mix and higher raw material prices.
Exports offered some relief too, as garmenting demand recovered in the United States, the United Kingdom and Europe.
What the first half looks like
Across the six months ended September 30, total income rose 10 per cent to Rs 3,685 crore, while EBITDA grew 6 per cent to Rs 404 crore, a margin of 11 per cent.
For investors, the question now is whether raw material prices cool and whether festive and wedding season demand rebuilds margins in the second half.
Raymond Lifestyle has not lost its customer. On this evidence, it has kept them, and added to them. The next test is simpler to state than to pass: turn that fuller order book back into a fatter profit.
Key numbers at a glance
- Net profit: Rs 68 crore, down about 10 per cent from Rs 75 crore a year ago.
- Revenue from operations: Rs 2,075 crore, up 13 per cent from Rs 1,832 crore.
- EBITDA: Rs 220 crore, down from Rs 226 crore; margin 10.61 per cent against 12.33 per cent.
- Branded Textile revenue: Rs 971 crore, up 7 per cent.
- Branded Apparel revenue: Rs 559 crore, up 20 per cent, the highest ever for a quarter.
- First-half total income: Rs 3,685 crore, up 10 per cent; EBITDA Rs 404 crore, up 6 per cent.
FAQs
How much did Raymond Lifestyle profit fall in Q2?
Net profit fell about 10 per cent to Rs 68 crore for the quarter ended September 30, compared with Rs 75 crore in the same quarter last year.
Did revenue grow despite the profit fall?
Yes. Revenue from operations rose 13 per cent to Rs 2,075 crore, helped by higher volumes in branded apparel and festive demand for branded textile.
Why did profit fall when sales rose?
Raw material costs rose more than 23 per cent and spending on finished inventory jumped 34 per cent, while freight and supply chain pressures also squeezed margins.
Which segment performed best?
Branded Apparel, with record quarterly revenue of Rs 559 crore, up 20 per cent, led by ColorPlus and Parx. Branded Textile grew 7 per cent to Rs 971 crore.
Was the company profitable in the previous quarter?
No. It had reported a loss of about Rs 22.6 crore in the preceding quarter, so the September quarter marked a return to profit.
Raymond Lifestyle announced its September quarter results on October 28. The numbers above are drawn from the company’s reported results as covered by Reuters and CNBC-TV18.
