Up 40% from all-time low, can Raymond Lifestyle stitch together a turnaround?

However, what followed was far from ideal. In FY25, revenue fell 5% to ₹6,360 crore due to weak consumer demand, while margins contracted by 610 basis points to 10.2%. Net profit declined even more sharply, crashing 80% to ₹100 crore. As a result, the stock price slumped nearly 70% by April, hitting a low of ₹911.

Since then, however, the stock has shown signs of recovery, rallying over 40% to ₹1,284. So is the worst over, and are things finally turning around?

Let’s let a closer look.

A legacy brand built on weddings and formalwear

Raymond Lifestyle needs no introduction. It is India’s largest men’s wedding and formal wear company. It has a strong portfolio that includes Raymond, Park Avenue, ColorPlus, Parx and Ethnix by Raymond. The company operates across four business segments: branded textiles, branded apparel, garmenting, and high-value shirting.

In FY25, the branded textile segment remained the largest contributor to both revenue and profit. It generated ₹3,002 crore in revenue, contributing 47%, and ₹420 crore in Ebitda, or 64.5% of the total.

This was followed by branded apparel, with ₹1,593 crore in revenue (25% of the total), and ₹118 crore in Ebitda (18%). The garmenting business contributed another ₹1,068 crores in revenue (17%) and ₹50 crore in Ebitda (7.6%). High-value shirting accounted for 12.6% ( ₹800 crore) of the top line and ₹114 crore of Ebitda (17.5%).

The company’s strategic approach is to strengthen the core (branded textiles), accelerate growth (branded apparel and garmenting), and create new categories (ethnic wear, innerwear, and sleepwear).

Textiles hit by demand weakness & ransomware

Branded textiles, which includes worsted suiting and shirting fabrics, recorded a 13% drop in revenue to ₹3,002 crore in FY25. This was primarily owning to weak discretionary demand, an industry-wide trend throughout the year.

A ransomware attack on 19 February disrupted operations for about 25 days, further hampering the segment’s performance. This disruption is estimated to have resulted in a revenue loss of ₹150-175 crore in Q4 FY25.

As a result, Ebitda margins for the segment dropped sharply to 14% in FY25 from 20.9% the previous year, while Ebitda fell 42% to ₹420 crore from ₹721 crore in FY24. That said, early signs of a recovery are visible.

The company is seeing a 12-13% uptick in booking trends and has secured healthy orders for its autumn-winter 2025 collection. Management expects this momentum to translate to more than 10-15% revenue growth in FY26, along with margin recovery.

Discretionary spending is also likely to increase as a result of income tax cuts and lower inflation, thereby supporting the recovery.

Store expansion and lower demand impacted branded apparel

The branded apparel segment reported flat revenue of ₹1,593 crore in FY25. Weak demand for weddings and fewer auspicious dates weighed on foot traffic, impacting performance. However, Ebitda margins declined to 7.4% from 11.9% due to continued investments in retail expansion and an unfavourable channel mix.

The company added 170 new stores during the year, taking its total to 1,688 stores as of March 2025. These include 1,098 The Raymond Shop (TRS) stores (up from 1,065 in FY24), 537 exclusive brand outlets (vs 409), and 53 Made to Measure (MTM) stores (up from 44).

New category for ‘complete man’ positioning

Ethnix, the new ethnic wear brand by Raymond, has crossed ₹100 crore in revenue. At the end of FY25, its store count stood at 152, with 38 added during the year. <anagement plans to double the EBO count to over 900 by FY27. Of these, Ethnix is expected to contribute around 300 stores. This expansion will follow a franchise-led model, aiming to improve profitability through lower fixed overheads.

The addition of stores will be modest in FY26, as the company’s priority will be stabilising and improving the performance of the existing network. It also plans to focus on brand-building, strengthening its distribution network, and launching more products.

Encouragingly, secondary sales for branded apparel have seen strong traction in March, April and May, signaling a return in consumer demand. This is expected to translate into restocking and improved throughput at the store level.

In FY25, Raymond entered new categories to expand its product suite for the ‘The Complete Man’. These include sleepwear under the brand SleepZ by Raymond and innerwear under Park Avenue Innerwear. The company also introduced a casual wear segment, which holds huge growth potential.

Garmenting sees client additions, but profitability under pressure

Raymond’s garmenting business, which primarily caters to B2B exports, posted a 3% increase in revenue to ₹1,068 crore in FY25. During the year, the company added over 20 new clients across key international markets, including the US, the UK and Europe.

However, the segment’s performance was weighed down by global uncertainties as customers adopted a cautious stance and renegotiated pricing agreements. In addition, elevated training costs for new product lines further impacted profitability. As a result, margins halved to 4.7%, while Ebitda fell sharply by 52% to ₹50 crore.

That said, Raymond Lifestyle is scaling up its garmenting capacity and is well-placed to benefit from the ongoing China Plus One and Bangladesh Plus One sourcing shifts. The recent free trade agreement (FTA) with the UK also presents a strong growth opportunity. The UK currently accounts for around 20-22% of its garmenting revenue, and management expects this to grow by 30-40% over the next two years.

Raymond is also positioning itself as a competitive global supplier of formal wear and aims to become one of the world’s largest suit makers. The company also highlighted its vertically integrated supply chain (from fabric to finished garment) as a competitive advantage, helping it offers better pricing and faster turnarounds in the export market.

Shirting margin boosted by one-time subsidy

Revenue from this segment was also impacted by weak consumer demand, falling 4% to ₹800 crore, while Ebitda grew 21% to ₹114 crore. This was led by a 300 bps improvement in margins to 14.3%, aided by a one-time government subsidy of ₹53 crore, booked in Q4FY25.

FY25 was tough, but FY26 looks like a reset year

On a consolidated basis, Raymond Lifestyle reported a 5% decline in revenue to ₹6,360 crore in FY25. Ebitda fell 40% year-on-year to ₹651 crore, with margins contracting 610 bps to 16.3%.

Weaker operating leverage, supply chain disruptions, upfront investments in retail expansion, and subdued discretionary demand drove the decline. Consequently, net profit dropped sharply by 80% to ₹100 crore.

That said, the company ended the year with a net-debt-free balance sheet and ₹90 crore in cash reserves. Management expects FY26 to be a recovery year, supported by improving trends in textiles and apparel bookings.

The company has guided for revenue growth of 10-15% in FY26, with the possibility of outperforming if the demand environment strengthens. Profitability is also expected to recover in line with sales momentum.

Stock trades at a discount

Owing to its recent underperformance, the company’s stock trades at a price-to-sales multiple of just 1.3, significantly lower than that of its listed peers Aditya Birla Fashion (2.5), Kewal Kiran (4.3), Cantabil (3.2), and Vedant Fashions (14.5).

It is also trading below its book value of ₹1,574, offering a margin of safety. This valuation gap suggests that any meaningful recovery in financials could trigger a re-rating.

Governance concerns linger

That said, the company has also experienced management attrition, with several key personnel resigning over the past six months, raising governance concerns among investors.

With early signs of a segmental recovery, a net cash position, and an aggressive but calibrated store expansion strategy, the question now is whether Raymond Lifestyle can stitch together a sustainable turnaround in FY26 and beyond.

For more such analyses, read Profit Pulse.

Madhvendra has over seven years of experience in equity markets and has cleared the NISM-Series-XV: Research Analyst Certification Examination. He specializes in writing detailed research articles on listed Indian companies, sectoral trends, and macroeconomic developments.

Disclosure: The writer does hold the stocks discussed in this article.

The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, we strongly advise you to consult your financial advisor. This article is strictly for educational purposes only.