GICS Industry : Textiles, Apparel & Luxury Goods l Sub Industry : Textiles l Website : www.raymondindia.

com

Raymond Ltd
Key Stock Indicators

NSE Ticker : RAYMOND CMP (as on 15 Dec 2010—Rs/share): 365.2 Shares outstanding (mn) : 61.4
Bloomberg Ticker : RW:IN 52-week range up to 15 Dec 2010 (Rs)(H/L): 443.80/188.05 Free Float (%) : 61.0
Face value / Share: 10.0 Market Cap as on 15 Dec 2010 (Rs mn): 22,416 Average daily volumes (12 months) : 837,336
Div. Yield (%): 0.0 Enterprise Value as on 15 Dec 2010 (Rs mn): 38,712 Beta (2 year) : 1.14
Div. Yield (%): 0.0

Raymond Ltd (Raymond) was incorporated in 1925; it manufactures fine fabrics, wool, wool-
blended worsted suiting, ring denims and high value shirting. It has some of the most highly Key Financial Indicators
respected apparel brands in its portfolio like Raymond, Raymond Premium Apparel, Manzoni, Park Mar-08 Mar-09 Mar-10
Avenue, ColorPlus, Parx, Zapp! and Notting Hill. All the plants of the company are ISO certified,
leveraging on cutting-edge technology that adheres to the highest quality parameters while also Revenue (Rs mn) 24,768.1 26,610.4 25,733.8
being environment friendly. EBITDA ma rgins (%) 7.6 8.5 10.5
PAT (Rs mn) -16.8 -2,272.8 -453.4
KEY HIGHLIGHTS
PAT ma rgins (%) -0.1 -8.5 -1.8
Expansion of capacity Gea ring (x) 1.2 1.6 1.5
EPS (Rs /s ha re) -0.3 -37.0 -7.4
Raymond has expanded capacity of worsted suiting to 33 million meters with a new facility at Vapi, PE (x) n.m n.m n.m
Gujarat in FY10, in addition to expansion of capacity of denim fabric to 40 million meters. It has set
up three world class garmenting units near Bangalore – for the manufacture of formal suits, jeans
P/BV (x) 1.4 0.4 1.9
wear and dress shirts. RoCE (%) 3.7 0.5 2.8
RoE (%) -0.1 -17.9 -3.8
New joint ventures increase company’s product range
EV/EBITDA (x) 17.9 9.9 14.4
n.m. : Not meaningful
Raymond has joined hands with UCO NV of Belgium, a leading producer of high end denim, to form
a global denim company with a combined capacity of 80 million meters and manufacturing facilities
in 3 continents with a global marketing network. It has formed a JV with Lanificio Fedora (Italy's Shareholding (As on September 30, 2010)
leading woollen fabric manufacturer) for the manufacture of carded woollen products. Others
DII
27%
27%
Tough times continue for the company’s overseas subsidiaries

In FY10, it’s wholly owned subsidiary in Europe - Regency Texteis Portuguesa Limitada (Regency),
Portugal, filed for insolvency due to adverse changes in European market conditions coupled with
the bankruptcy of its major customers.

KEY RISKS

• Volatility in prices of cotton

• Foreign exchange fluctuations FII Promoter
7% 39%
Stock Performances vis-à-vis market
Indexed price chart
Returns (%)
(index) ('000)
YTD 1-m 3-m 12-m
250 10000
RAYMOND 35 -20 -16 76
200 8000
NIFTY 9 -8 2 13
150 6000
Note:
100 4000
1) YTD returns are since April 1, 2010 to Dec 15, 2010.
2) 1-m, 3-m and 12-m returns are up to Dec 15, 2010.
50 2000

0 0
Dec-09

Jun-10

Oct-10
Apr-10

Jul-10

Nov-10
Feb-10
Mar-10

Sep-10
Jan-10

Aug-10
May-10

Volumes (RHS) RAYMOND NIFTY

CRISIL COMPANY REPORT | 1

Raymond Ltd
BACKGROUND

Raymond is India’s leading producer of worsted suiting fabric with a 60% market share. The Raymond Shop retail chain occupies a space of more than 1 million square feet
built-up area. Wide reach all over the country across big cities and smaller towns allows the company to reach a wide spectrum of consumers. It has 500 stores in prime
locations, in over 200 cities in India, overseas network spans 39 stores in 15 plus cities across the Middle East, Saudi Arabia, Sri Lanka and Bangladesh.

COMPETITIVE POSITION

Peer Comparison
Raymond Ltd Siyaram Silk Mills Ltd. Arvind Ltd. Sangam (India) Ltd.
Mar-10 Mar-10 Mar-10 Mar-10
Revenue (Rs mn) 25,733.8 8,004.6 32,769.7 8,578.5
EBITDA ma rgins (%) 10.5 9.3 14.4 15.3
PAT (Rs mn) -453.4 337.2 530.6 171.5
PAT ma rgins (%) -1.8 4.2 1.6 2.0
Gea ring (x) 1.5 1.0 2.2 3.7
EPS (Rs /s ha re) -7.4 36.0 1.6 4.4
PE (x) n.m 10.4 31.4 11.1
P/BV (x) 1.9 2.1 0.8 1.0
RoCE (%) 2.8 16.8 8.0 8.2
RoE (%) -3.8 22.0 5.2 9.5
EV/EBITDA (x) 14.4 6.9 7.0 6.7
n.m: Not meaningful

FINANCIAL PROFILE Key Financial Indicators

VRS drags the company’s bottom-line into the red in FY10 Units Mar-08 Mar-09 Mar-10
Revenue Rs mil li on 24,768.1 26,610.4 25,733.8
Raymond’s top line dropped by around 3% in FY10 on account of lower realisations
as compared to FY09. However EBIDTA margins though improved to 10.5% on EBITDA ma rgins Per cent 7.6 8.5 10.5
account of lower raw material and operating cost. However, a one time VRS PAT Rs mil li on -16.8 -2,272.8 -453.4
settlement with its workers at its Thane unit led the company to register a loss at
the net level in FY10. PAT ma rgi ns Per cent -0.1 -8.5 -1.8
Revenue growth Per cent 17.1 7.4 -3.3
EBITDA growth Per cent -30.9 20.3 19.5
PAT growth Per cent -101.2 -13,423.9 80.1
Gea ring Ti mes 1.2 1.6 1.5
RoCE Per cent 3.7 0.5 2.8
RoE Per cent -0.1 -17.9 -3.8
INDUSTRY PROFILE

Worsted Fabric

The market for worsted fabrics is small in India as demand mainly arises from the premium segment of the market for products like suits and blazers. It is a niche market
and is characterised by high degree of brand consciousness. The industry comprises of few large organised players, and as compared to other segments in the textile
industry, competition is limited, which gives players greater pricing flexibility. The demand is, however, sensitive to substitutes like blended fabric (wool blended with
polyester) due to better crease resistance and lower prices. Wool is the main raw material used in the industry. Around 95 per cent of the wool used for worsted fabric is
imported from countries like Australia and New Zealand.

Readymade garments

Around 70 per cent of the demand for readymade garments emanates from the domestic market, with the remaining coming from exports. The domestic RMG market is
highly fragmented with few organised players and a large number of unorganised players. The organised segment is relatively better off as benefits of branding and
positioning accrue to them in the form of better price realisations. On the export front, India faces stiff pricing pressure from low cost countries such as China, Vietnam,
Bangladesh, Indonesia, and Pakistan, which have been able to garner a substantial portion of the US and EU markets on the basis of lower prices. India scores over other
countries in respect of availability of raw material and labour; but heavy skew towards cotton-based apparel exports, limited diversification of export markets, and low
machinery and labour productivity compared to competing exporters restrict the growth prospects for Indian RMG exporters.

CRISIL COMPANY REPORT | 2

Raymond Ltd
ANNUAL RESULTS

Income Statement Balance sheet

(Rs million ) Mar-08 Mar-09 Mar-10 (Rs million ) Mar-08 Mar-09 Mar-10
Net Sales 23,985.6 25,913.5 24,992.8 Equity share capital 822.5 822.5 613.8
Operating Income 24,768.1 26,610.4 25,733.8 Reserves and surplus 12,531.3 11,194.4 11,057.1
Tangible net worth 13,353.8 12,016.9 11,670.9
EBITDA 1,872.2 2,252.9 2,691.9 Deferred tax liablity:|asset| 643.6 275.4 211.9
EBITDA Margin 7.6 8.5 10.5 Long-term debt 8,250.3 11,555.5 10,256.4
Short-term-debt 7,257.7 6,830.8 6,746.5
Depreciation 1,688.6 1,665.5 1,765.4 Total debt 15,508.0 18,386.3 17,002.9
Interest 798.3 2,631.5 1,177.3 Current liabilities 4,648.9 5,354.1 4,934.4
Other Income 961.9 761.8 449.4 Total provisions 953.9 892.7 1,091.0
Total liabilities 35,108.2 36,925.4 34,911.1
PBT 270.6 -2,477.3 -344.9 Gross block 12,801.9 14,931.4 13,999.6
PAT -16.8 -2,272.8 -453.4 Net fixed assets 13,169.9 15,778.4 14,628.7
Investments 6,370.4 6,301.5 6,296.6
PAT Margin -0.1 -8.5 -1.8 Current assets 15,568.0 14,845.5 13,985.7
Receivables 4,641.4 4,588.6 4,509.8
No. of shares (Mn No.) 61.4 61.4 61.4 Inventories 6,664.9 5,950.9 5,624.7
Cash 579.3 835.9 706.7
Earnings per share (EPS) -0.3 -37.0 -7.4 Total assets 35,108.3 36,925.4 34,911.0

Cash flow Ratio

(Rs million ) Mar-08 Mar-09 Mar-10 Mar-08 Mar-09 Mar-10
Pre-tax profit 347.1 -1,282.4 198.6 Revenue growth (%) 17.1 7.4 -3.3
Total tax paid -310.8 -163.8 -172.1 EBITDA growth(%) -30.9 20.3 19.5
Depreciation 1,688.6 1,665.5 1,765.4 PAT growth(%) -101.2 -13,423.9 80.1
Change in working capital -2,074.6 1,623.1 509.3
EBITDA margins(%) 7.6 8.5 10.5
Cash flow from operating activities -349.7 1,842.4 2,301.2 Tax rate (%) 93.5 -6.6 -49.9
Capital Expenditure -1,216.0 -3,440.4 -560.4 PAT margins (%) -0.1 -8.5 -1.8
Investments and others -562.3 68.9 4.9
Dividend payout (%) -913.1 0.0 0.0
Cash flow from investing activities -1,778.3 -3,371.5 -555.5 Return on Equity (%) -0.1 -17.9 -3.8
Equity raised/(repaid) 0.0 0.0 0.0 Return on capital employed (%) 3.7 0.5 2.8
Debt raised/(repaid) 2,072.5 2,878.2 -1,383.4
Dividend (incl. tax) -184.6 -4.9 -0.8 Gearing (x) 1.2 1.6 1.5
Others (incl extraordinaries) 251.8 -1,087.7 -490.6 Interest coverage (x) 2.3 0.9 2.3
Debt/EBITDA (x) 8.3 8.2 6.3
Cash flow from financing activities 2,139.7 1,785.6 -1,874.8
Change in cash position 11.7 256.5 -129.1 Asset turnover (x) 2.0 1.9 1.8
Opening cash 567.6 579.3 835.9 Current ratio (x) 1.5 1.5 1.5
Closing cash 579.3 835.9 706.7 Gross current assets (days) 212 194 188
n.m : Not meaningful;

QUARTERLY RESULTS

Profit and loss account

(Rs million) Sep-10 % of Rev Sep-09 % of Rev Jun-10 % of Rev Sep-10 % of Rev Sep-09 % of Rev
No of Months 3 3 3 6 6
Revenue 4,184.8 100.0 4,140.2 100.0 2,555.4 100.0 6,714.1 100.0 6,703.0 100.0
EBITDA 988.0 23.6 733.3 17.7 103.0 4.0 1,091.0 16.2 834.6 12.5
Interes t 225.3 5.4 227.7 5.5 210.1 8.2 435.4 6.5 459.2 6.9
Depreci a ti on 255.7 6.1 281.4 6.8 254.3 10.0 510.0 7.6 551.0 8.2
PBT 505.7 12.1 68.5 1.7 (380.1) (14.9) 125.6 1.9 (332.6) (5.0)
PAT 391.8 9.4 74.3 1.8 (248.8) (9.7) 143.0 2.1 (241.7) (3.6)

CRISIL COMPANY REPORT | 3

Raymond Ltd
FOCUS CHARTS & TABLES

Rs mn Quarterly sales & y-o-y growth Per cent

Quarterly PAT & y-o-y growth
Rs mn Per cent
5,000 30
4,500 25 1,000 600
4,000 20 500 400
3,500 15 0 200
3,000 10 -500 0
2,500 5 -200
-1,000
2,000 0 -400
-1,500 -600
1,500 -5 -2,000
1,000 -10 -800
-2,500 -1,000
500 -15
0 -20 -3,000 -1,200

Dec-07

Jun-08
Sep-08
Dec-08

Jun-09
Sep-09
Dec-09

Jun-10
Sep-10
Mar-08

Mar-09

Mar-10
Dec-07

Dec-08

Dec-09
Jun-08

Jun-09

Jun-10
Sep-08

Sep-09

Sep-10
Mar-08

Mar-09

Sales Sales growth y-o-y (RHS) Mar-10 Net Profit Net profit growth y-o-y (RHS)

Rs/share EPS Per cent Movement in operating and net margins

10 30
20
0 10
0
-10 -10
-20
-20 -30
-40
-30 -50
-60
-40 -70
-80
-50

Sep-08

Sep-09

Sep-10
Dec-07

Dec-08

Dec-09
Jun-08

Jun-09

Jun-10
Mar-08

Mar-09

Mar-10
Sep-08

Sep-09

Sep-10
Jun-08

Dec-08

Jun-09

Dec-09

Jun-10
Mar-09

Mar-10

OPM NPM

Shareholding Pattern (Per cent) Board of Directors

Dec 2009 Mar 2010 Jun 2010 Sep 2010 Director Name Designation
Promoter 38.4 39.0 39.6 39.0 Ga uta m Ha ri Si ngha ni a (Mr.) Executive Cha i rma n & Ma na gi ng
FII 7.3 8.0 7.3 6.5 Director, Promoter-Director
DII 22.9 22.4 21.5 27.2 Is hwa r Da s Aga rwa l (Mr.) Nominee Director, Non-Executive
Others 31.5 30.7 31.6 27.3 Director
Pra deep Kuma r Bha nda ri (Mr.) Non-Executive Di rector
Pra deep Ka l i Pa da Guha (Mr.) Non-Executive Di rector
Na ba nkur Gupta (Mr.) Non-Executive Di rector
Sha i les h Vis hnubha i Ha ribha kti Non-Executive Di rector
(Mr.)
Vija ypa t Si ngha nia (Dr.) Non-Executive Di rector

Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

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CRISIL COMPANY REPORT | 4