Raymond

The company posted a shockingly poor set of numbers for Q2FY16.Its consolidated net profit for the quarter dropped by a whopping 86% (YoY) at Rs.9 crore on a 2% rise in total income at Rs.1492 crore. EBITDA slumped 22% at Rs.134 crore and margins came down sharply from 15.5% to 9%. Exceptional expense of Rs.32 crore, which was impairment charges on account of its auto component business as carrying value of the foreign business assets held through subsidiary Ring Plus Aqua also dented the profit further. Tax outgo rose 37% to Rs.22 crore. Interest outgo has come down from Rs.52 crore to Rs.49 crore (YoY) and debt stands at Rs.1792 crore.

In terms of segment wise review, textiles, which contributes 47% to total revenue showed pressure due to increased spending on advertising and sustained investment in retail innovation and brand building. EBITDA of Apparel segment was also impacted mainly due to its Made to Measure venture. Its total store count across all formats is at 1017. Luxury cotton shirting, denim, tool and hardware and auto component- all showed a decline in margins. Garment is the only segment which did well with a 7% rise in EBITDA due to higher capacity utilization. The only saving grace, in Q1 the company had posted a net loss of Rs.54 crore – at least this quarter a loss was averted. Yet it has ended H1FY16 with a net loss of Rs.4 crore v/s profit of Rs.35 crore. Outlook for FY16 does not look good.