Over the next three years, Raymond hopes to have no net debt
According to the company’s most recent annual report, Raymond aims to be net debt free within the next three years and is focused on managing cash through cost reduction efforts and working capital optimization.
Raymond’s net debt was reduced to Rs 1,088 crore for the year ended March 31, 2022. In FY21 it was Rs 1,416 crore, while in the year 20, it was 1,859 crore rupees.
According to the study, the net debt to equity ratio of India’s leading fabric and fashion retailer fell from 0.8 in FY20 to 0.4 in FY22.
With a stated goal of being a net-debt-free company over the next three years, the company is “focusing on managing liquidity through cost reduction measures and working capital optimization,” according to the communicated.
Addressing shareholders, its Chairman and Managing Director Gautam Hari Singhania said the company had reduced its operating costs by Rs 453 crore, compared to pre-COVID levels in FY 2019-20, which was “critical” for its activity. This was accomplished through a sustained focus on cost optimization.
Profitability and effective working capital management produced free cash flow, which significantly reduced our leverage, he continued.
In addition, the company has reduced the number of NWC (Net Working Capital) days by more than 50%, compared to a peak of 98 days in September 2019, according to Raymond Group Chief Financial Officer Amit Agarwal.
The number of days it takes a business to turn working capital into income is called NWC.
With businesses in branded textiles, branded apparel, retail, apparel, engineering, real estate and FMCG, the diversified Raymond Group recorded consolidated sales of 6,348 crore Rs in FY22, compared to Rs 3,648 crore in the previous year.
In order to achieve synergies and create a focused business-to-consumer (B2C) operation, Raymond is spun off its B2C business, including the apparel business – Raymond Apparel Ltd, a wholly owned hardware subsidiary in the ‘company.
Additionally, Raymond is considering the initial public offering (IPO) of JK Files and Engineering Ltd (JKFEL), which runs its tools and hardware business as well as its ancillary vehicle business and has filed its DRHP with the market regulator SEBI on December 8, 2021. .
However, Raymond chose to wait for an “opportunity moment” for JKFEL’s IPO due to volatility in global stock markets caused by the protracted conflict between Russia and Ukraine.
Raymond’s annual report said he “expects to be on profitable growth momentum” while discussing the outlook for FY23. Due to the summer wedding season and an increase in social gatherings, consumer sentiment is generally good in the domestic market.