RAYMOND - Raymond Limited Share Price

The management of Raymond Limited provided a positive outlook during the Q4 FY '25 earnings conference call. They noted that India remains one of the fastest-growing economies globally, projected to grow by approximately 6.5% in fiscal year 2025, slightly lower than the previous year but still robust in the context of global growth.

Key forward-looking points included:

1. Interest Rate Environment: The Reserve Bank of India has reduced interest rates by 50 basis points, with expectations for further cuts, supporting increased liquidity and consumer purchasing power.

2. Real Estate Market Expectations: The union budget for '25-'26 introduces tax cuts and a provision of INR 1 lakh crore to increase consumer spending, particularly within urban and middle-class households. This is expected to drive growth in the housing segment, which has been comparatively weaker over the last three years.

3. Demerger Success: The successful demerger of the Real Estate business allows Raymond Realty to pursue an independent growth trajectory, with shares expected to list in Q2 FY '26. Shareholders will receive one share of Raymond Realty Limited for every share held in Raymond Limited.

4. Engineering Business Growth: The engineering segment reported a strong Q4 with a total income of INR 601 crores and an EBITDA of INR 99 crores, reflecting a 16.4% margin. Looking ahead, growth in aerospace is expected as production issues within major manufacturers are resolved.

5. Real Estate Development Pipeline: New joint development agreements in Mahim and Wadala, with an aggregate gross development value of INR 6,800 crores, were signed, contributing to a future revenue potential of INR 40,000 crores.

6. Growth Target: The management aims for a 20% year-on-year growth in booking values in the Real Estate segment, maintaining a strong financial position with a net cash surplus of around INR 400 crores in that segment.

Overall, management expressed confidence in leveraging their diversified portfolio and solid market position to capitalize on upcoming opportunities in both realty and engineering sectors.

Q1: What is the funding requirement from the JDAs, and what rates can we expect for construction funding?

A: For each JDA, the peak funding requirement typically ranges from INR 250 crores to INR 400 crores, depending on the project's size. We can secure construction funding at competitive interest rates between 8% and 9.25%, primarily due to our strong credit rating and consistent performance.

Q2: How is the launch pipeline looking for this year, specifically for Mahim and other JDAs?

A: We expect to launch a few projects in Q3 and Q4. There's a possibility of a launch in Thane during Q2, but no launches are planned for Q1 due to seasonality. Our strategy is influenced by market conditions and demand, and we prioritize timing for optimal results.

Q3: How has the market for residential real estate been trending in recent months?

A: Q4 showed good solid demand overall, especially in March, overcoming a slow start. April and May have been normal, though we've seen a slight dip in foot traffic due to current events; however, inquiries are rebounding post-ceasefire news, indicating strong market interest.

Q4: What is your outlook for aerospace and automotive sectors over the next year?

A: The aerospace market is recovering steadily as Boeing increases production, while the automotive sector presents a mixed bag: Indian markets remain strong, while overseas markets face challenges. However, supply chain constraints suggest overall positive trends for our segments.