The Rs 11,000-crore diversified Raymond Group, best known for its textile brand of the same name, is betting on the defence and aerospace sectors as its next growth driver, coming at a time when geopolitical issues are on the boil across the world. In an exclusive interview with Viveat Susan Pinto & Raghavendra Kamath, Gautam Singhania, chairman & MD of the group, also highlighted the challenges faced by the lifestyle business, which contributes close to 60% to overall topline, and the growing prospects of the real estate business, which is expected to be listed in 45 days. Edited excerpts:
Your lifestyle business had a weak Q4 and FY25 as a whole. Do you see the retail environment getting better in FY26? And what is the plan to improve lifestyle business performance?
Our performance in FY25 was under pressure, primarily due to weak consumer demand and challenging macro-economic conditions. There has been some softness in the north, but we see retail demand improving on the back of the fiscal stimulus measures that have kicked in from April. We are also consolidating our retail operations and expansion this year (FY26), after opening 170 new stores in FY25. We have close to 1,700 stores in total under the lifestyle business. Store additions will be done selectively this year.
Your defence and aerospace vertical was separated into an unlisted subsidiary of Raymond last year when you consolidated your engineering businesses into one unit, following the acquisition of Maini Precision Products? What are your plans for defence and aerospace?
Defence and aerospace are the two big areas that we are looking at from a future perspective. In defence, we have already started work with Adani Defence & Aerospace. At a broader level, we see a number of opportunities emerging within the sector with the government’s ‘Make in India’ initiative. Also, with geopolitical issues raging across the world, including tensions across the border with our neighbours, it will result in a renewed focus and demand for defence and aerospace products. We want to capitalise on these opportunities as they emerge.
Raymond began trading on the bourses on Wednesday without the real estate business, which has been demerged, effective May 1. When is the listing of the latter likely to be completed?
It is likely to be listed in the next 45 days. That is the process. So yes, we are on track as far as the listing of Raymond Realty is concerned. It is also amongst our fastest-growing businesses at the moment. Nobody imagined that we could have achieved the demerger of our real estate business within a year of listing the lifestyle business in September 2024. But we have done it. As part of our five-year plan, we committed to being debt-free in 2025. We were debt-free in 2023. We said we would have three listed companies by 2026. We have achieved that in 2025.
Raymond Realty has been signing joint development agreements aggressively in the last few quarters. What is the gross development value of the projects signed so far?
Together with the Thane land and all the joint development agreements we have signed in areas such as Bandra, Mahim, Wadala, etc, the gross development potential would be in excess of Rs 50,000 crore. And we have the capacity to take up more projects. We are an asset-light company. We are debt free. We are not buying land. We have access to capital. We can certainly take up more projects in the future.
Do you see the real estate business growing even faster following demerger and listing?
We have grown very fast over the last few years. We never imagined we’d become so big so quickly. To give you a sense, we have signed joint development agreements to the tune of Rs 20,000 crore so far. We realise that as the base will get bigger, growth rates will come down. Having said that, we have big growth plans for the real estate business, which is currently focused on the Mumbai Metropolitan region. The redevelopment potential is significant here. We may look at Pune, if we decide to go beyond Mumbai.
Precision engineering is the third pillar of your group? What is the game plan there?
We are having some good conversations at the moment with potential clients and customers for our precision engineering business. I am not at liberty to discuss what they are. But suffice to say, precision engineering capacities are lower than global demand. There is a clear opportunity for us to grow this business as we go forward.
Raymond has completed 100 years of its existence. Will the next generation be a part of its journey from here on?
We are a family-owned, but professionally managed company. The best person will eventually run the company. We have survived the last 100 years. We will survive the next 100 years too.