RAYMONDNSEQ2 FY2023November 11, 2022

Raymond Limited

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Management on call

Abhijeet Kundu

ANTIQUE STOCK BROKING LIMITED

S. L. Pokharna

DIRECTOR, RAYMOND LIMITED

Amit Agarwal

GROUP CFO

Sunil Kataria

CEO, LIFESTYLE BUSINESS

Harmohan Sahni

CEO, REALTY BUSINESS

Jatin Khanna

HEAD, CORPORATE DEVELOPMENT

J Mukund

HEAD, INVESTOR RELATIONS

Key numbers — 40 extracted

38%

ormance is 4th consecutive quarter of record performance. Our consolidated revenues have grown by 38% to ₹ 2,191 Crores from ₹1,583 Crores in the second quarter of fiscal 2022, driven by strong deman

₹ 2,191 Crore

is 4th consecutive quarter of record performance. Our consolidated revenues have grown by 38% to ₹ 2,191 Crores from ₹1,583 Crores in the second quarter of fiscal 2022, driven by strong demand across all busi

₹1,583 Crore

quarter of record performance. Our consolidated revenues have grown by 38% to ₹ 2,191 Crores from ₹1,583 Crores in the second quarter of fiscal 2022, driven by strong demand across all businesses in both dome

₹358 Crore

o share that we have clocked highest ever revenue and have achieved highest quarter two EBITDA of ₹358 Crores with EBITDA margin of 16.3% in last 10 years. It’s heartening to share that we have a PAT of ₹15

16.3%

st ever revenue and have achieved highest quarter two EBITDA of ₹358 Crores with EBITDA margin of 16.3% in last 10 years. It’s heartening to share that we have a PAT of ₹159 Crores which is a growth of

₹159 Crore

ores with EBITDA margin of 16.3% in last 10 years. It’s heartening to share that we have a PAT of ₹159 Crores which is a growth of 198% as compared to ₹53 Crores in Q2 of last year. Also, as compared to p

198%

in last 10 years. It’s heartening to share that we have a PAT of ₹159 Crores which is a growth of 198% as compared to ₹53 Crores in Q2 of last year. Also, as compared to pre-pandemic levels of same

₹53 Crore

’s heartening to share that we have a PAT of ₹159 Crores which is a growth of 198% as compared to ₹53 Crores in Q2 of last year. Also, as compared to pre-pandemic levels of same quarter, we have delivered

15%

uarter, we have delivered profitable growth across segments with the revenues in Q2FY23 higher by 15% vs ₹1,913 Cr in Q2FY20 and EBITDA margin at 16.3% in Q2FY23 was higher by about 390 basis points

₹1,913

we have delivered profitable growth across segments with the revenues in Q2FY23 higher by 15% vs ₹1,913 Cr in Q2FY20 and EBITDA margin at 16.3% in Q2FY23 was higher by about 390 basis points vs. 12.4% i

390 basis point

Y23 higher by 15% vs ₹1,913 Cr in Q2FY20 and EBITDA margin at 16.3% in Q2FY23 was higher by about 390 basis points vs. 12.4% in Q2FY20. Our Q2 reported PAT of ₹159 Crores is 89% higher as compared to ₹84 Crores

12.4%

₹1,913 Cr in Q2FY20 and EBITDA margin at 16.3% in Q2FY23 was higher by about 390 basis points vs. 12.4% in Q2FY20. Our Q2 reported PAT of ₹159 Crores is 89% higher as compared to ₹84 Crores in Q2FY20

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Guidance — 20 items

Amit Agarwal

opening

“Our premium quality offering in 1 & 2 BHK project of Ten X and premium 3 & 4 BHK project of Address by GS which is backed by fast paced construction activity has been well appreciated by the customers.”

Amit Agarwal

opening

“Our first project Ten X Habitat received 120 booking in the current quarter higher than 107 bookings received in the same quarter of previous year.”

Amit Agarwal

opening

“Our new premium residential project ‘The Address by GS ’which was launched in third quarter of fiscal 2022 continued to receive great response from customers with 68 bookings in this quarter.”

Amit Agarwal

opening

“The total bookings made for this project accounts for 349 units which is ~85% of the total inventory launched with a booking value of ₹834 Crores.”

Amit Agarwal

opening

“It gives us immense pleasure to state that within 11 months of the project launch, about 64% of the total inventory has been sold.”

Amit Agarwal

opening

“On the construction front, fast-paced construction activity continued in all 10 towers of the 10X Habitat project and the 2 towers of ‘The Address by GS ’project.”

Amit Agarwal

opening

“Let me give details about the construction - In the 10 X Habitat project the tower wise construction status is as follows: The Lift installation, electrical fittings & entrance lobby works in progress for the tower 1, 2 and 3.”

Amit Agarwal

opening

“As far as our second project the Address by GS is concerned, Columns above Podium - 3 slab R/F & concreting work in progress for Tower A and Columns above Podium - 1 slab R/F & concreting work in progress for Tower B.”

Amit Agarwal

opening

“With the upcoming winter wedding season, starting from mid of November, we expect the momentum to continue in both Branded Textile and Branded Apparel segments while at the same time we are closely monitoring the impact on demand in the current inflationary environment.”

Amit Agarwal

opening

“In the engineering business, we are witnessing the domestic retail demand in consuming sector remain healthy and we expect the same to continue.”

Risks & concerns — 3 flagged

In the exports markets, with inflationary environment and Euro currency depreciation, our B2B customers have deferred certain orders as they are witnessing a slowdown in secondary demand On an aggregate basis the business reported lower EBITDA margin of 12.8% as compared to 15.5% in previous year.

— Amit Agarwal

So it is difficult for us to say whether we start in one month, two months or five months.

— Amit Agarwal

So you won't see any immediate impact of that in the numbers.

— Harmohan Sahni

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Q&A — 7 exchanges

Thank you, once again congratulations for amazing kind of numbers. So I just wanted to understand that since that now we've been growing quarter-on-quarter have been growing so well. So and we're doing better than pre-COVID. So what kind of base do we assume right now, that will it be sustainable in terms of revenue and margins? Should quarter 2 be taken as the base for our future growth, or due to some seasonality quarter 2 or quarter 3 would be better? So give us some explanation regarding that?

Amit Agarwal

Yes. Actually, thank you. The business has a seasonality. There's no doubt about it. We will have the wedding season, festive season, which would be at a peak, so to speak. And we all since we sell primary to our dealer network & franchisee network, Q2 seems to have a very big push. But also, we know, as I talked to you, that in the Q4, we have a large number of marriage date, almost 48 marriages are there in Q4. So we see a good momentum for our business. And I think our focus is clearly, we have built a strong base and grow the base from here. So if I could summarize, we feel that quarter 3

My first question is on the Branded Apparel business. Could you give us a sense on what would be for the existing stores like-to-like growth over Q2 FY '20 levels?

Amit Agarwal

Yes. I'll ask Sunil to respond to you. Yes. This is Sunil here. So I'll give you broad estimates. So I think a like-to-like growth store because we had also done a reduction in number of stores during COVID rationalization. So our like-to-like store growth right now pre-COVID is decent healthy double-digit growth right now as I see. And in terms of the margin, the margin that we've delivered this quarter of almost 9%, do you think that could continue in the coming quarters? Yes. I think the focus on delivering margin is very clear. We have done a very strong cost rationalization exercise over

Firstly, congratulations on the good set of the numbers. So I have a couple of questions. First one is on the garmenting margins. This quarter, we have reported about 7.5%, 7.3% kind of the margin. So just wanted to understand, it is just one quarter phenomenon? Or is it a normalized margin also going ahead?

Amit Agarwal

Maybe I think you've tell all your questions, and then we can respond to the question. So one is this on garmenting margins. Another one is on the real estate side. So in the Address by GS, we have seen the collections of INR 204 crores, against the total booking of INR 834 crores. So it is still just 25% on the collections. So how do we see the collection in the coming period? Thirdly, in the real estate side on the Q-on-Q, if we look at the numbers, there is a drop in the saleable area as well as number of units also. So is it because of the higher interest rate actually impacting the demand

Good afternoon. Two questions. One was on the debt. You mentioned that because of the season, there's a lot of inventory in the shelf. So can you give us a sense as of the IPO proceeds, what type of debt reductions we can see in H2 of FY '23?

Amit Agarwal

Look, we are not going to give a specific guidance in terms of the number, what it would be. But as in nature, and we have the demonstrated performance that first half is the build phase for the working capital. And in the second half, people sell our dealer network, franchisee network, sell the inventory and pay us the receivables which gets created on the second quarter and the first quarter the inventory. So that is what we are going to see. As far as the IPO proceeds are concerned, we have clearly outlined that whatever the IPO happens proceeds happens, it goes directly for further debt re

Congratulations for a good set of number. Yes, my first question is towards the real estate division. So what I understand from the follow-up question from the previous person. Is that my understanding is correct, if I say when the Ten-X Habitat is more or less it is completely nearly booked and more of revenues to flow from the Address by GS, will the margin be rising from here onwards?

Amit Agarwal

So let us first understand, the way the accounting is done is based on percentage of completion method. So if you see almost 2/3rd of the project is sold. And in terms of the construction pace, also almost, let's say, 50%, 55% has been constructive. So therefore, you're recording the revenue based on the completed completion method. So you have still a lot of revenue to be booked on the Ten-X project itself. Second, on The Address by GS, it has just started. Therefore, the revenue on The Address by GS is always going as of now, it is lower. And going forward, as the construction takes place yo

Congratulation on a good set of numbers. I've got a couple of questions. One is in quarter two, there's an exceptional item of INR 10 crores. So if you can explain this amount, that would be helpful. So second is regarding the JK File IPO. So we have been seeing since last two quarters that we are waiting for favorable market condition and all. Now as far as domestic market is concerned, it is almost at all-time high, and the primary market is floating with a lot of IPOs these days. So I'm just wondering what are we waiting for?

Amit Agarwal

Okay. Good. So first of all, a simple housekeeping question on the exceptional loss. So three things. Basically, we if you look at it, we had a -- in one of the LFS channel customers, there is an expected provisioning for a credit loss to the tune of INR 20 crores. At the same time, what has happened, there was a glass building at one of our office premises at Thane, which had got burned down. And we got a final settlement claim of INR 11 crores out of that. So it is a gain. And the third one is on the JK File, we had to dispose of certain land and reduced certain number of people so that offs

Thank you very much, everyone, and look forward to talking to you in the next quarter's earnings release.

Abhijeet Kundu

Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.

Speaking time

Amit Agarwal

Surya Narayan

Sunil Kataria

Sachin Kasera

Moderator

Harmohan Sahni

Ritesh Badjatya

Priyanka Trivedi

Darshil Jhaveri

Abhijeet Kundu

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Opening remarks

Abhijeet Kundu

Thanks on behalf of Antique Stock Broking, I would like to welcome all the participants in the Q2 FY '23 conference call of Raymond Limited. I have with you Mr. J. Mukund, who is the Head of Investor Relations of Raymond Limited. Without taking further time, I would like to hand over the call to Mr. Mukund. Over to you, Mukund.

J. Mukund

Thank you, Abhijeet. Good evening, everyone and thank you for joining us for our Q2 FY '23 earnings call of Raymond. I hope you would have received a copy of our results presentation. I would like to urge you to go through this along with the disclaimer slides. Today, we have with us from the senior management of Raymond, Mr. S. L. Pokharna, who is Director of Raymond Limited; Mr. Amit Agarwal, Group CFO; Mr. Sunil Kataria, CEO of Lifestyle Business; Mr. Harmohan Sahni, CEO of Realty Business; and Mr. Jatin Khanna, Head of Corporate Development. Now I would like to hand over the call to our Group CFO, Amit, who will give you the summary of the company's quarterly performance before we open up for Q&A. Over to you, Amit.

Amit Agarwal

Thank you, Mukund. Good evening, ladies and gentlemen. Thank you for joining us today for the earnings call to discuss our results of second quarter for the fiscal 2023. First of all, I would like to wish you all a very happy Diwali and a new year. I hope that all of you had a wonderful festive season with your near and dear ones. It has been a much-awaited occasion for all of us in India and the festivities have ushered in a spirit of optimism and hope. Let me now start with giving you a brief overview of the second quarter of the current fiscal. It has been a strong quarter that has seen encouraging demand with life returning to normalcy. Majority of physical offices have resumed, and Work from Home has now more or less taken a back seat. We have also seen an increasing number of social gatherings owing to festivals and travel and tourism bouncing back with vigor. All these factors have been good contributors in maintaining healthy momentum in consumer sentiments that witnessed consu

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