Hopefully, those worried about why Raymond Lifestyle was trading at such dismal multiple got their answers, now it’s trading on the higher end with EVEBIDTA of 51.x. Value might emerge now as it has started trading below Book value.
Cheap can always get cheaper. I have paid my tuition fees to the market for this learning. Management that doesn’t walk the talk is also not a good sign. Thankfully I had kept my allocation small waiting for the earnings trigger.
Are any reasons specified for the weak performance?
Concall is scheduled for today 4pm
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One thing I noticed is that the stock is now trading below the book value. Any more downside doesnt look logically feasible though you never know.
The book value is close to 10,000 Crores. Does anyone know details of this calculation?
On Screener Book Value Per share at todays closing is 1556 and CMP was 1478.
And as you said total book value was close to 10,000Cr whereas the Current Market Cap is 9010 Crs.
Management has extended the FY28 EBITDA guidance of ₹2,200 Cr. by 12-18 months.
What to me is surprising is this interview 2.5 months into Q3 (December 16th) - very positive commentary and no hints of slowdown/demand weakness
It is due to 5300 crores of assets created which is mainly goodwill and intangible assets like brand value created at the time of demerger. It is not totally due to physical assets. This year’s annual report will provide more details.
Check this video at 50:00 min where it is explained.
That explains why the stock price dipped below the shown book value. If 5300Cr worth of intangibles created due to the demerger is excluded, the book value should come down to a little over 4000Cr while the company trades at a market Cap of 9000Cr. So the actual ratio should be around 1.5.
Also it is worth noting that these Intangibles will be amortized over subsequent periods which will have its own set of consequences on the Income Statement.
Any opinion on the valuation of the stock at current levels?
I feel retail is a difficult business. Company is trying out lot of new things. They are expanding Ethix very fast. They are starting with Sleepz and Park Avenue Innerwears etc.
In retail though one can grow the overall topline by opening new stores, but important metrics to track are the - Ebitda margin at company level and store level, Inventory Management, Same store sale growth, Attractiveness of Business for Franchisee etc etc. For these the jury is still out, and not too convinced about the Company’s performance.
So we should wait and watch and track the performance before entering the stock.
+1 I think it’s still early days especially with the company expanding into a lot of new segments.
They have a good brand so that’s a plus point.
The main question is now on the Jockey can that walk the talk, do smart allocation and grow the business over the next few years?
Has anyone done any background research of the management based on their past experience and performance?
MOSF report on Raymond Life Style after Q3FY25 result.
Sunil Kataria has resigned from the Board; in the interim, the senior management will be led by Gautam Singhania.
The outgoing MD sounded very positive about future prospects of Raymond Lifestyle and the strategy they had put in place in the Q3 results con call but is moving to Godrej Agrovet now within days. Has his views on RLL business changed so suddenly?
Can anyone share more on how to interpret the data, keeping into consideration excluding goodwill, intangible assets and exceptional items one time profit of 2,059.
Screener shows book value at 1,556, the P/E looks depressed at 3.33 (I believe this is due to the one time exceptional item in profit of 2,059).
Anyone who’s good at reviewing the accounting, can you please help with reviewing the balance sheet and share your perspective on what’s the true value of the business ?
I think the market is still in price discovery for this stock.
It’s a retail chain, I think the best way to compare it would be with the likes of bata or even to vedant fashion to some extend .
Why I’d compare it more with bata :
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The presence across country matches almost with bata.
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Bata has been stagnant on topline front for last. 4 years , yet if we look at valuations it trades, that gives me alot of hope for this counter.
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Both the brands are known for their product quality, and not popular amongst millennials but have a decent acceptance among old school guys.
On whichever parameter be PE or market cap to sales u compare it with likes of bata it’s at a significant discount.