Stamp duty cut led to demand recovery in real estate sector: Gautam Singhania, Raymond

Gautam Singhania, Chairman and Managing Director, Raymond Group talks about demand recovery, the revival of consumer sentiments, new normal and the strategy adopted to beat the COVID-blues, digital transformation and adaption, outlook for FY22 and real estate segment among others during an interview with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: A rebooting is seen in the retail industry. What kind of improvement are you seeing in overall demand?

A: There were many challenges last year because everything was close and gradually things are being opened. But the biggest challenge is that places are opening and closing. Today, you can see that new travel restrictions have been implemented between Delhi and Mumbai. There are restrictions between Kerala. There are places where the COVID test is required while there are places where the COVID test is not required. So, these ad-hoc changes that are enforced daily are creating a lot of challenges. 

Q: Going forward recovery is visible because the vaccine is there, and it is expected that we will get out of it. This will lead to a revival of consumer sentiments. What are your expectations related to it?

A: If seen in different businesses, then there are different levels of recovery. Recovery is slightly more in auto component and FMCG. In the case of the textile, the wedding season has started, and it is a good season, so, I am hoping that a good recovery will come. 

Q: Tell the way Raymond has adapted to the new normal and how are you working to keep the customer base intact? Also, tell us about the strategy that you have adopted to beat COVID-blues?

A: There is a new normal, for instance, now there is a ‘Work from Home’ as well as ‘Work from Home’, this is a new normal. The cost structure is a new normal. So, the efficiency of the companies has gone up. The only way to keep the customers intact is that you will have to provide a correct product at the correct price and to meet the customers need. That is the only important thing to keep the customer with you. 

Q: Digital transformation is happening as people have started adopting digital method instead of brick-and-mortar way for sales. How are you participating in it? What is the way forward to this digital transformation?

A: In our business, digital is not so big because it has touch and feel, there is an experience. But we have a digital strategy and probably 10-12% will get digitalized in it because this is an industry in which people get out and there is an impulse purchasing. It is an industry where people have to get out and have touch & feel and see the fit. So, even globally, this industry will not be so digitized, but we are geared for it. 

Q: What is your outlook for FY22 and what are your growth plans with respect to the top line, bottom line and margin?

A: We are cautiously optimistic. Hopefully, things will get better. As I have said, there is a different demand projection in different sectors but from 75-80% to 110-120% depending on which business it is in. We are seeing such a bounce back today. 

Q: Let’s talk about the real estate demand. Have you seen any demand pick up after duty cuts were announced by the government? Also, are you moving towards some new launches?

A: The stamp duty cut announced by the government was a good move and it has led to demand recovery. Looking ahead, we are quite optimistic because we are doing affordable housing. We see good demand for affordable housing. As far as new launches are concerned, we are planning for it but we are not announcing anything related to it. We will update you about it as soon as we are ready for it. 

Q: Fuel, petrol and diesel, prices are going up continuously and in shipping, we have seen that there is a shortage of containers. How much is this impacting your logistics and how much cost has gone up due to it?

A: Due to the shortage of containers, the price of containers are going up. So, on one hand, the products are not going at the right time because there is a shortage of containers. Secondly, the inflationary pressure increases because the cost will increase for everything. 

Q: What is the company’s strategy for the addition of new stores and what are the expansion plans of the company?

A: We are not thinking about opening the new stores right now, but it is a consolidation phase, and we are focusing on it.