Raymond rallies 12% on heavy volumes; stock soars 37% from 52-week low

Till 12:14 PM, a combined 5.07 million shares, representing 7.6 per cent of the total equity of Raymond, had changed hands on the NSE and BSE

Shares of Raymond have moved higher by 12 per cent to Rs 1,812.80 on the National Stock Exchange (NSE) in Tuesday’s intra-day trade amid heavy volumes. After the demerger of its lifestyle business on July 11, 2024, Raymond currently holds the real estate and engineering business segments under its umbrella. 

 

At 12:14 PM, Raymond was trading 11.6 per cent higher at Rs 1,800, as compared to the 0.08 per cent decline in the Nifty 50 index. The average trading volumes on the counter jumped over 10-fold with a combined 5.07 million shares, representing 7.6 per cent of total equity of Raymond, changing hands on the NSE and BSE.  The stock has bounced back 37 per cent from its 52-week low of Rs 1,325 that it touched on November 4. It had hit a 52-week high of Rs 2,182 on September 3 (post the demerger of Raymond Lifestyle).

 

On July 4, Raymond had announced the vertical demerger of its real estate business to its wholly owned subsidiary, Raymond Realty (RRL). According to the announced scheme, Raymond and RRL will operate as separate listed entities within the Raymond Group post completion of the demerger scheme. Each shareholder of Raymond will get one share of RRL for every share they hold in Raymond. 

 

Post this demerger, Raymond will continue to hold the engineering business consolidated under two new companies and the denim business through its joint venture (JV) company (Raymond UCO Denim Private Limited).

 

The demerger aligns with Raymond Group's stated objectives of simplifying its corporate structure and enhancing shareholder value for operational and structural benefits. Leveraging Raymond's institutional strength, the move will allow for independent, dedicated management teams with industry-specific expertise to sharpen business focus and tailor investment strategies to each sector's unique dynamics, the company said.

 

The recent announcement related to the demerger of its real estate vertical will take another 6-12 months to conclude including receipt of all necessary statutory approvals. Post the demerger of the real estate business, Raymond will continue to be the holding company for engineering business (housed under JK Files and Engineering Limited), and textile under Raymond UCO Denim Limited and Everblue Apparels Limited.

 

In the September 2024 quarter (Q2FY25), Raymond Realty posted yet another strong quarter with a 135 per cent year-on-year (YoY) rise in revenue to Rs 571 crore, from Rs 243 crore in Q2FY24. The segment reported earnings before interest, tax, depreciation and amortisation (Ebitda) of Rs 112 crore in Q2FY25 from Rs 47 crore in Q2FY24.

 

In Q2FY25, the company achieved a strong booking value of Rs 562 crore, primarily driven by demand for 'TenX ERA', sale of retail shops in Thane and in joint development agreement (JDA) of 'The Address by GS' in Bandra. Raymond said the total potential revenue from current real estate business is more than Rs 32,000 crore, which includes Rs 25,000 crore plus from its Thane land parcel and Rs 7,000 crore plus from the JDA-led business model.

 

Engineering segment revenue doubled to Rs 862 crore in H1FY25 compared to Rs 410 crore in H1FY24, driven by contributions of Rs 445 crore from Maini Precision Products Limited. The performance was driven by support from the domestic markets for Flex plates, Ring Gear and Shaft Bearings categories. However, the exports were sluggish on account of weak demand and geopolitical issues. Under the Engineering segment, the company deals in tools and hardware (steel files, drills, hand tools, power tools, auto components such as ring gears, flex plates and water pump bearings, among others).