The Raymond Limited: A Study - ICSI

1 The Raymond Limited: A Study By Dr. Prasant Sarangi Director (Research). ICSI-CCGRT, Navi Mumbai 1. THE Raymond LIMITED: A Study . INTRODUCTION: India has the second largest manufacturing capacity in textiles globally and accounts for 13% of the world's production of textile, fibre and yarn. The Government of India has announced a special package of ,000 crore towards few months back for boosting the Indian textile industry. This could help Indian firms to grab the opportunity because after fully reaping the benefits of access to the markets of developed economies in the post-Uruguay round world, China is beginning to exit the textiles and apparel sector due to rising domestic wages. This leaves a huge demand base for India to exploit as rightly recognized by the government. OBJECTIVES: The case Study has been designed in order to achieve following few objectives: To explore the condition of Indian textile industry To analyse in detail analysis of The Raymond , its history, the SWOT analysis and the 4P's analysis.

2 METHODOLOGY: The Study is based on the secondary sources of information. The research design is basically comparative research in nature. For gathering data, various newspaper cuttings like the mint, the Economic Times, The Business Standards etc., have been considered. For the analysis about The Raymond , its annual report 2014-15. has been considered. Most of the facts are compiled informations. 2. THE INDIAN TEXTILE INDUSTRY: The textile industry is the second largest employer in the country after agriculture;. any allocation to it has a multiplier effect on the economy at large. According to an ASSOCHAM report, employment generated in the economy because of a rise of in demand of the industry, is more than 5 times the employment created in this sector itself. It employed nearly 51 million people directly and 68 million people indirectly in 2015-16. Textile and apparel sector contributes 14% to 2. industrial production, 4% to India's Gross Domestic Product (GDP) and constitutes 15% of the country's export earnings.

3 The new Rs. 6,000 crore package is a chance for it to upgrade and expand India's textile industry has a long history of being a mainstay of the economy's global trade linkages. It was, after all, the English East India Company's focus on trade of cotton and silk from India that made it one of the richest and most powerful corporations in the 18th century. Fibre India's fibre production in 2015-16 is 9 million Tonnes and is expected to reach 10 million Tonnes in 2017-18. Largest producer of Cotton in the world with 5,984 million kg production in 2015-16. Largest producer of Jute in the world with 1,710 million kg production in 2013-14. Second largest producer of Silk in the world with 29 million kg production in 2014-15. One of the major producer of Wool in the world with 48 million kg production in 2014-15. Second largest producer of Manmade Fibre and Filament in the world with 2,511 million kg production in 2015-16.

4 Spinning Second largest installed spindle capacity in the world with more than 50. million spindles in 2014-15. Second largest installed rotor capacity in the world with more than 8 million rotors in 2014- 15. Weaving World's highest installed weaving capacity with more than million looms (including million handlooms) in 2014-15. Apparel Apparel has contributed highest 42% to the textile and apparel export basket of India during 2015-16. Investors can benefit from the market access arrangement of India with countries like Japan, South Korea, ASEAN, Chile etc. 3. 3. AN INTRODUCTION TO THE Raymond : History: It was incorporated as the Raymond Woollen mill during the year 1925 near Thane Creek. Lala Kailashpat Singhania took over The Raymond Woollen Mill in the year 1944. In 1958, the first exclusive Raymond Retail showroom, King's Corner, was opened at Ballard Estate in Mumbai. In 1968, Raymond had set up a readymade garments plant at Thane.

5 A new manufacturing facility was set up at Jalgaon (Maharashtra) during the year 1979 to meet the increasing demand for worsted woollen fabrics. The Raymond limited is a $800 million company with $797 million as operating income. The total net income of the company stood at $850 million with a total assets of $ 500 million with a total equity of $ 475 million. The Family Tree of Singhanias. Compiled from publication. 4. With a capacity of 38 million meters in wool and wool-blended fabrics, Raymond commands over 60 per cent market share in worsted suiting in India and ranks amongst the first three fully integrated manufacturers of worsted suiting in the world. We are perhaps the only company in the world to have a diverse product range of nearly 20,000. design and colours of suiting fabric to suit every age, occasion and style. Raymond export products to over 55 countries including USA, Canada, Europe, Japan and the Middle East.

6 Raymond produces high-value pure-wool, wool-blended and premium polyester viscose worsted suiting in addition to half a million blankets and shawls. Our strong in-house skills for research and development have always resulted in path-breaking new products raising the standard of the Indian textile industry. A Brief Company Profile: The annual report 2014-15 makes the current position of the company clear. A. brief outline is done below: Financial Performance: Amid optimism and rising business sentiments, your Company reported a top-line growth of 21% over the Previous Year. At standalone level, the Gross Revenue from operations stood at crore compared with crore in the Previous Year. The Operating Profit before tax stood at crore as against crore in the Previous Year. The Net Profit for the year stood at crore against crore reported in the Previous Year. The Consolidated Gross Revenue from operations for FY 2015 was placed at crore (Previous Year: crore), registering a growth of 17%.

7 The Consolidated Operating Profit stood at crore (Previous Year: crore). The Consolidated Profit after tax stood at crore (Previous Year: Rs. crore). Dividend and Reserves: Your Directors recommend a dividend of 30% per equity share of face value of each aggregating to crore (Previous Year: crore). 5. During the year under review, your Company transferred a sum of crore to the Debenture Redemption Reserve (Previous Year: Rs. 45 crore). During the year under review, no amount was transferred to general reserve. Share Capital: The paid up Equity Share Capital as at March 31, 2015 stood at crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. Performance Highlights: During FY 2015, your Company's total Textile sales registered a growth of 24%; Net Revenue Being crore as against crore in FY 2014.

8 The increase in sales was led by volume growth in domestic and export market and deeper penetration of shirting fabric market. Finance and Accounts: In FY 2015, your Company had issued and allotted Unsecured Redeemable Non-Convertible Debentures (NCD) Series G of ,00,000/- each for cash at par aggregating to crore on private placement basis. The aforesaid NCD series is listed on Wholesale Debt Market (WDM) of National Stock Exchange of India Limited. During the year under review, 750 Unsecured Redeemable Non-Convertible Debentures (NCD) Series B of ,00,000/- each were redeemed. 4. PERFORMANCE OF SUBSIDIARY COMPANY. Domestic Subsidiaries (a) Raymond Apparel Limited Raymond Apparel Limited brings to the customers the best of fabric and styling through some of India's most prestigious brand- Raymond Premium Apparel, Park Avenue and Parx. 6. The Gross Revenue of the company stood at crore (Previous Year: crore).

9 Profit after tax for the year stood at crore (Previous Year: crore). The commendable growth is driven by strong performance across all three brands. Multiple strategic initiatives undertaken have helped to reduce input costs and improve design and quality, thus resulting in higher efficiency and effective supply chain management. (b) Colorplus Fashions Limited This company operates as the ready-to-wear premium casual lifestyle brand for men under the Colorplus' brand. The company's Gross Revenue for FY. 2015 stood at Rs. crore (Previous Year: crore). The company made a loss of crore (Previous Year: crore). (c) Silver Spark Apparel Limited The company has a quality overseas clientele, and the strong export order book led to a strong sales growth performance. The Gross Revenue of the company for FY 2015 stood at crore (Previous Year: crore). The company had a profit after tax of crore (Previous Year: crore).

10 (d) Celebrations Apparel Limited This company has a state-of-the art manufacturing facility for formal shirts. The Gross Revenue of the company for FY 2015 was placed at crore (Previous year: crore). The company incurred a loss of Rs. crore (Previous Year: crore). (e) Everblue Apparel Limited This company has a state-of-the art denim-wear facility offering seamless denim garmenting solutions. The Gross Revenue of the company for FY 2015. stood at crore (Previous Year: crore). The company earned a Profit after Tax of crore (Previous Year: crore). (f) Raymond Woollen Outerwear Limited The Gross Revenue of the company for FY 2015 stood at crore (Previous Year: Rs. crore). During the year, the company had a profit of crore (Previous Year: loss crore). 7. (g) JK Files (India) Limited This company is the largest manufacturer of steel files in the world with a global market share of 30% in the files business. The company reported a Gross Revenue of Rs.