Raymond Ltd (Rs.487.05) Reborn:: The Engineering Phoenix Rising After Demerger?
How is this?
- Revenue: ₹528 crore (up 11% YoY)
- EBITDA: ₹43 crore (up 12.6% YoY)
- Net Profit: ₹11.4 crore (down 81% YoY due to a ₹167 crore exceptional loss)
At a CMP of about ₹487.05, Raymond trades at a very low P/E of 17.30 (distorted due to demerger effects). Street median target price is ₹846, indicating a 64% potential upside. Overall stance: accumulate on dips.
🔹Company Overview:
Founded in 1925, Raymond Ltd has shifted from textiles to engineering. Its demerged companies are:
- Raymond Lifestyle Ltd (textiles & apparel)
- Raymond Realty Ltd (real estate)
The core Raymond Ltd now focuses on:
- Precision Engineering & Auto Components: ~77% revenue
- Aerospace & Defence: ~15% revenue
- Other industrial products: ~8% revenue
Raymond exports to 55+ countries, holds a net cash position (~₹27 crore), and has promoter holding of 48.87%. A major ₹940 crore capex plan in Andhra Pradesh is underway.
🔹Financial Performance:
Q2 FY26 Vs Q2 FY25
- Revenue: Rs.528 Vs Rs.474 crore.
- Total Income: Rs.564 Vs Rs.512 crore.
- EBITDA: Rs.43 Vs Rs.38 crore.
- EBITDA Margin: 8.2%.
- Net Profit: Rs.11.4 Vs Rs.60 crore.
- Exceptional Loss: ~Rs.167 crore.
H1 FY26 Vs H1 FY25:
- Total Income: Rs.1,095 crore (up 8%).
- EBITDA: Rs.79 crore (vs Rs 77 crore).
- Working Capital Cycle: ~60 days.
- Inventory Days: ~85.
🔹Ratio Analysis:
- P/E: 17.30
- P/B: 1.06x.
- EV/EBITDA: 9.4x.
- ROE: 1.3%.
- ROCE: 2.3%.
- Debt/Equity: 0.2x.
Intrinsic value estimates (EV/EBITDA, EV/Sales) suggest ~₹857 per share (66% upside). Peer-multiple re-rating potential remains strong.
🔹Analyst Target Prices:
| Source | Target Price (₹) | Upside |
|---|---|---|
| Economic Times | ₹846 | +64% |
| Investing.com | ₹903 | +75% |
| AlphaSpread | ₹921 | +79% |
| WalletInvestor | ₹598 | +16% |
Ideal entry: Below ₹500 for best risk–reward.
🔹Growth Drivers:
- Aerospace & defence exports growing >20% YoY.
- Auto & EV precision parts gaining momentum.
- ₹940 crore AP expansion boosting long-term scalability.
- Margin target: 10–12% for FY26.
🔹Risks:
- Exceptional losses may continue in Q3 due to restructuring.
- Auto/defence cyclicality.
- Steel prices rising 5–7% QoQ.
- Auditor resignation under SEBI review.
- Stock down ~34% from post-demerger highs.
🔹Twitter (X) Sentiment:
- Low but positive engagement around midcap conferences.
- Pledge release seen as a positive.
- Some caution on auditor resignation.
- Sentiment mix: 60% bullish, 30% neutral, 10% cautious.
Conclusion:
Raymond Ltd has successfully repositioned itself as an engineering-focused company. Q2 FY26 showed stable revenue and EBITDA performance, with exceptional losses masking underlying strength. With strong capex, clean balance sheet, and improving demand across auto and defence, the stock remains attractive for medium-term investors.
View: Accumulate on dips.
Next triggers: Q3 FY26 results and AP capex progress.
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Disclaimer: This report is for informational purposes only and based on publicly available data as of 24 November 2025. It is not investment advice. Markets involve risk. Please conduct your own research and consult a SEBI-registered advisor before investing.
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