Textile-to-real estate group Raymond is seeing buoyant sales in the current quarter and expects it to pick up in the coming months. Gautam Singhania, chairman and managing director of Raymond group tells Raghavendra Kamath that real estate sales will continue to be good in the coming years. He chose not to offer any comments on proxy advisory firms’ recommendation to shareholders to oppose his appointment as executive chairman of Raymond Lifestyle.
Raymond Lifestyle posted 70% dip in profit in Q2. How are the sales now? What is your outlook?
The last six months have been slow for all due to no weddings, elections and so on..Q3 and Q4 are looking good. Retail sales are vibrant now. Weddings will continue till May next year. I read somewhere average spending on wedding is `36 lakh and 20% of that goes for clothing.
In your earlier interactions, you said you have signed five to six joint development agreements. Has the pace of such agreements picked up?
A lot is going on. We started our project in Bandra. A lot is in pipeline. We are excited about real estate. Maharashtra has given a strong mandate to Mahayuti (BJP-Shiv Sena and NCP alliance). It will give good stability to the state for five years. Devendra Fadnavis is known for his dynamics, work on infrastructure and so on which is beneficial for the state including real estate. Mumbai is getting redeveloped and residential societies are getting redeveloped everywhere. So, the pace of redevelopment is large. Our idea is how can we be part of it.
What is the update on listing of Raymond’s real estate business?
SEBI approval for it came 10 days ago…We are on track for it in the middle of next year, may be August or September.
Many property companies have seen dip in bookings in first half of FY25. What has been your experience. Have you faced any headwinds?
No. We have not seen any dip. We are in affordable luxury. We have right product at the right price. Sales will be good in the next several years. At macro level, Mumbai is going to get rebuilt. All development is happening in Mumbai which is good for the city. We are looking to launch a project by the end or this financial year.
What kind of growth you are expecting in engineering business. You also talked about acquisitions in aerospace and defence.
We are expecting sales growth of 15% and Ebitda growth of 20% (on an annual basis). Last six months, Boeing was on strike. India has good relations with US and with Trump coming back, we need to see how things pan out. It will be beneficial arbitrage between India and China. If he imposes a duty of 10% duty on India, he will impose 30% on China. Whatever he does, it will be beneficial for India. It will create opportunities.
We keep looking for acquisition opportunities in defence and aerospace. Nothing as of now.
What kind of benefits you got from integration of JK Engineering and Maini?
Overheads have come down. Economies of scale has kicked in. Both have similar businesses. It is good for both.
The proxy advisory firms’ have recommended to the shareholders to oppose your appointment as executive chairman of Raymond Lifestyle. Your response to that.
No comment.