Retail, expansion push up Raymond bottomline 25%

CORPORATE SCORECARD

Raymond posted a 25.60 per cent increase in its net profit at Rs 38.37 crore for the quarter ended December 2006 compared with Rs 30.55 crore in the corresponding period last year.

Its net sales declined by 14 per cent to Rs 297.25 crore against Rs 345.34 crore during the period.

Net sales of the December 2006 quarter, however, cannot be compared with those of the December 2005 quarter, as the last year's sales included the performance of the denim division, which was hived off into a joint venture with UCO of Belgium last August.

The net sales, excluding the results of the denim division, grew by 13 per cent.

"The market for textile and apparel business continues to be buoyant. The company has identified retailing as its thrust area for future growth in the branded textiles and apparel space," said Gautam Hari Singhania, chairman and managing director of Raymond.

He added, "The company has embarked on an expansion plan for increasing its retail penetration and also entered into strategic partnerships with leading international players to enter new product categories."

The sales of textile division grew by 12 per cent to Rs 251.43 crore during the December 2006 quarter compared with Rs 224.12 crore last year. The division sold 68.4 lakh metre of fabric during the December 2006 quarter as against 59.4 lakh metre during the same quarter last year.

The sales of the files and tools division were at Rs 42.79 crore as against Rs 38.53 crore in the corresponding quarter last year.

The operating profit in the December quarter rose marginally to Rs 75.75 crore against Rs 73 crore. The earnings per share (EPS) for the quarter stood at Rs 6.26 against Rs 4.98.

During the quarter, the company signed a 50:50 joint venture with an Italian company, Grotto, for retailing of premium casual wear and accessories under the GAS brand.

Apart from this, Raymond's subsidiary, Ring Plus Aqua, entered into a 50:50 joint venture with a US-based company, AJ Rose Manufacturing Company, for setting up a project to manufacture sheet metal components in India, which is subject to necessary statutory and other approvals.

The company is expanding its retail network across the country and West Asia. Recently, the company opened its flagship store in Mumbai and is also increasing exclusive brand outlets for various brands in its portfolio.