Raymond Lifestyle enters listed space; what investors should know about the new entity

In order to unlock value for its shareholders, the retail major has spun off its lifestyle division.

Considering that Vedant Fashion gets a 16x FY26F EV/sales valuation for its wedding business, RLL’s valuation has the potential for an upside, above our/street estimates going ahead.

Raymond Lifestyle (RLL) that spun off from the retail major Raymond entered D-Street today. The company announced a share swap ratio of 4:5 i.e. 4 shares of Raymond Lifestyle for every 5 held in Raymond Limited.

The demerger was exercised as part of the value unlocking for the company's shareholders. Furthermore, primarily the sale of the company's non-core business and demerger of lifestyle and real estate business has made Raymond a debt free company.

The company's stock filing said, "Trading Members of the Exchange are hereby informed that effective from September 05, 2024, the equity shares of Raymond Lifestyle Ltd (Scrip Code: 544240) are listed and admitted to dealings on the Exchange in the list of ''T'' Group Securities.

Brokerage view on Raymond Lifesyle valuations

InCred Equities in its analyst meet takeaways said the company's management guidance entailed 12-15 per cent growth between FY24-FY28F.

The EBITDA margin of the lifestyle business expanded from 9.7% pre-Covid to 15.9% in FY24, led by efforts on store optimization, improvement in product mix and stepping up its casualization and premiumization strategy, it added.

In the past, the Raymond group has been largely viewed as a textile/apparel player, however the analyst meet on Lifestyle 2.0 brought to light its position in the wedding wear segment and aggressive targets, implying a sizeable business going ahead (Rs38bn/Rs58bn in FY27F/30F, as per management’s 1.5x/2.3x targets, respectively, over the FY24 level of Rs25.4bn), added InCred report.

Considering that Vedant Fashion gets a 16x FY26F EV/sales valuation for its wedding business, RLL’s valuation has the potential for an upside, above our/street estimates going ahead.

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Raymond Lifestyle enters listed space; what investors should know about the new entity

In order to unlock value for its shareholders, the retail major has spun off its lifestyle division.

Brokerage view on Raymond Lifesyle valuations

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