Raymond looks to improve operational efficiency

06 Dec '13

2 min read

India’s leading textile brand Raymond plans to return its sights to growth and higher profitability in the coming quarters by improving operational efficiencies and strengthen its branded textile business which constitutes nearly half of its revenues.

After focusing on product launches in the past couple of years, the company now plans to improve its operational efficiencies through better supply chain management, closure of non-performing retail stores, more exports for higher realizations in the event of rupee depreciation and leveraging its brand equity in the apparel business.

With an aim to increase its domestic as well as global retail footprint, the eight-old decade textile major plans to boost its bottom-line and ROCE by unlocking the value of its 125 acre plot in Thane.

The Thane plant was relocated to Vapi in 2006 and the company had reached VRS settlement with workers for Rs 260 crore. The company has now paid full VRS amount in two tranches and it expects to unlock the value of the plot which, according to industry experts, is worth around Rs 3,000 crore.

Raymond reported a growth of 10 per cent in net sales for the quarter ended September 2013 at Rs 1,224 crore. However, the company’s core of branded textile business grew by mere 7 per cent to Rs 559 crore in the period.

Focus on improving the operational efficiencies also comes at a time when its Denim, Cotton Shirting, and Garmenting businesses are hit by forex losses and rising input costs. EBITDA of the garment division fell 22 per cent in Jul-Sep 2013 to Rs 15 crore versus Rs 19 crore in the year ago period.

Similarly, EBITDA in the denim business fell 20 per cent at Rs 23 crore versus Rs 28 crore in the year ago period. cotton Shirting fabric business was also hit by higher input costs as EBITDA fell 21 per cent to Rs 10 crore as compared to Rs 12 crore in the year ago period.

Fibre2fashion News Desk - India

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