Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Raymond Lifestyle Limited (NSE: RAYMONDLSL) Q4 2027 Earnings Call dated May. 07, 2026
Corporate Participants:
Satyaki Ghosh — Chief Executive Officer
E C Prasad — Chief Financial Officer
Dave — Unidentified Participant
Ujwal — Unidentified Participant
Amrish Kumar Singh — Unidentified Participant
Analysts:
Avinash Karumanchi — Analyst
Vijay Jangir — Analyst
Deepali Kumari — Analyst
Mayank Varswani — Analyst
Ashutosh Jyoti Aditya — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Raymond Lifestyle Limited Q4, FY26 and FY26 earnings conference call hosted by Modilal Oswal Financial Services. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Avinash Karumanchi from Motilal Oswal Financial Services. Thank you. And over to you sir.
Avinash Karumanchi — Analyst
Thank you Shapnali. On behalf of Motilal Oswal Financial Services I would like to welcome all the participants to Q4, FY26 and FY26 conference call of Raymond Lifestyle Limited. Today we have with us from the senior management of Raymond Lifestyle Limited Mr. Rakesh Tiwari Group Chief Organization Officer. Mr. Satyaki Ghosh, Chief Executive Officer, Mr. E C Prasad, Chief Financial Officer and Mr. Sunny Desha, Head Investor Relations. Without taking further time, I would like to hand the call to Mr.
Satyaki Ghosh over to you sir.
Satyaki Ghosh — Chief Executive Officer
Hi everybody. Thank you for joining this call. My name is Satyaki Khos and I am the CEO for Raymond Lifestyle Limited. Before we dive into our performance it is important to acknowledge the totally volatile macroeconomic environment that we are navigating. While India remains a bright spot with GDP estimates around 6.8 to 7.2%, global headwinds persist. We are closely monitoring from the U. S Iran conflict which has kept Brent crude prices hovering over $100 and leading to increased energy, raw material prices and freight costs.
Domestically. We face the dual challenge of extreme heat waves affecting multiple states and below average monsoon forecast at 92% which may impact discretionary spending. However, amongst all this doom, there is a silver lining. The US India trade deal that currently looks quite open to the entire world and we don’t have a disadvantage. The UK India FTA and the impending Euro India FTA can create significant demand recovery for our exports. It is against this backdrop of external volatility and emerging opportunities that Raymond Lifestyle has delivered a strong performance last year.
It is my privilege to address you for the first time and as I embark on this journey with an iconic brand that boasts of legacy spanning over a century. I want to share the context of my leadership and what will I bring to the table. I worked about 30 years in FMCG companies like General Electric, PepsiCo, L’ Oreal and I worked in Indian groups like Spencer’s Retail which was RPG and Arthur Birla Group before joining Raymond Group. So I have experience in FMCG part of the business and I also have experience in textiles and hence Raymond seemed like the right opportunity where I get the opportunity to turn around a hundred year old brand and take it to its next logical growth path.
I am also happy to introduce our next new Chief Financial Officer E.C. Prasad. I’ll hand over to Prasad to introduce himself before I come back to address you.
E C Prasad — Chief Financial Officer
So good evening everyone and thank you for attending our call today. This is EC Prasad. I’m a professional with about 29 years of experience. Prior to joining Ravens just three months back I was the CFO for Bajaj Electricals and also work with Voltas Limited and Imami predominantly in the FMCG FMEG space. My focus here would be to strengthen our governance compliance and also to build cash and improve our working capital cycles and with improved profitability. Thank you very much
Satyaki Ghosh — Chief Executive Officer
Coming back Satyaki Here once again FY26 has been a year of recovery for Raymond lifestyle. Despite international headwinds, we have delivered a healthy performance driven by strong domestic consumption. For the first time in our history we crossed 7000 crore mark recording our highest ever total income of 7034 crores and 11% year on year growth. EBITDA for the year rose to 804 crores with a 23% year on year growth. With an EBITDA margin of 11.4%. We remain debt free with a net cash surplus of 179 crores.
Net working capital improved significantly over last March and has come down by 10 days from 87 days to 77 days showing efficiency in the system. Complementing this strength, our Q4 26 performance remained resilient. We recorded our highest ever Q4 total income of 1810 crore a 15% year on year growth. EBITDA for the quarter rose by 53% to 152 crores. Our EBITDA margin improved by 210 basis points Q over Q to 8.4% and we created robust cash flows and we generated close to 200 crores of net cash during this quarter.
Our Q4 performance remains resilient and reflected sustained demand despite a challenging global environment. In our branded textile segment, revenue grew 4.14percent to 831crores in Q4 driven by robust volume growth and premiumization. EBITDA for the Segment grew by 126% to 115 crore on account of improved product mix, strong volume, ASP growth and scale leverage. Branded Apparel Segment it is to note that our current branded apparel segment results include our emerging and new businesses. It has been the case in the past also.
So this quarter we are keeping it the way we have been reporting. But next quarter we will try to show you separately what are we doing in emerging businesses and what are we doing in our marquee brands. The four brands which is the core apparel business of Park Avenue, Color plus Raymond, Ready to Wear and Parks. Our new ventures are currently in strategic investment phase and it will be good for everybody to know how these businesses are developing. The core four brands revenue was 1667 crores with a EBITDA margin of 7.8 crores which is without these new businesses.
So the core brands are actually Quite okay at 7.8% and we will endeavor to take it to double digit over the next two years time. So overall branded apparel the way we report today is 469 crores in Q4 with a 20% year on year growth. We witnessed double digit like growth in retail channels of branded apparel segment. EBITDA for the segment grew significantly to 19 crores and if we exclude the emerging businesses the margin was at 5.4% in Q4. The garmenting business we saw demand recovery post the US India trade deal leading to the highest ever monthly revenue in March.
We also implemented duty paid terms for US client which helped us keep the clients with us throughout the year and now we will get the benefit of that going into next year. The segment reported a revenue of 342 crores in Q4FY26 as compared to 248 crores in the same quarter previous year reflecting a growth of 38%. YoY the segment reported a EBITDA of 14 crores in Q4FY26 compared to negative 7 crores in Q4FY25 and EBITDA margin for the quarter was at 4.1% which is higher than the rest of the year and is much higher than minus 2.9% in the same quarter last year.
This business is going to go forward at a fast pace next year with the UK and Euro FTA and US India trade deal being equitable for the world in our high value cotton shirting. The B2B segment revenue grew at 6% to 831 crore in Q4 and EBITDA for the segment was 20 crores. Now this is you can compare it to 61 crores in Q4 last year. But last year Q4 EBITDA of 61 crores had a 53 crore one time subsidy from the government for our Amravati plant. So the base is high. If you take that out then the segment has done actually better than last year.
Now let me talk a little bit about our marketing strategy. Our new CMO Kalpana Singh has just joined in March from HUL and she’ll be leading this for us. We’ll introduce her to you maybe next quarter. Our intent is to move forward from fragmented marketing to a more connected omnichannel system across the full consumer journey. Today we are executing many initiatives, thematic campaigns, impactful ideas, digital and retail efforts. But the full idea now going forward is to put this in a 360 degree marketing marketing campaign and make each of our brands stand on their own feet and get recognized separately between Park Avenue, Raymond, Ready to Wear, Raymond MTM, ColorPlus, etc.
This year we have advertised Raymond Linen in a big way. We have increased our presence in high impact media like Cricket and cinema. If you have watched Dhurandat 2, we launched our cinema campaign with Dhurandat 2 and we have started building digital and influencer ecosystem. Leiden is doing very well for us at the moment. At Raymond Lifestyle Limited we have a target driven ESG roadmap. Our emission reduction strategy runs across three levers Renewable energy, fuel transition and operational efficiency.
All these three are active simultaneously. On renewable energy, we are on track to increase our renewable percentage between 5 to 6% this year from our baseline of FY25 and we remain on track to increase this to 25% of our total energy requirement by 2030. On scope one and scope two, emissions we are targeting to reduce we have reduced between 4 and 5% this year from a baseline year of FY25 and we are on track to reduce these by 15% by 2030. The leadership transitions during the quarter marked a new chapter for the business.
With the recent appointment of Rakesh Tiwari as Group cfo, Prasad as Lifestyle CFO and myself as the CEO and I just introduced Kalpana as the new cmo, Raymond Lifestyle Limited is poised to accelerate its growth agenda. The new leadership brings a renewed focus on expansion, expanding branded apparel, scaling newer categories and driving operational efficiencies across the value chain. As we enter FY27 we would like to call this the year of Consolidation as we are shifting focus from restoring sustainable profitability and we will do it through a lean and high performing network.
We plan to add a gross of about 100 EBO stores in FY27. However we will continue to exit underperforming stores during the year and we think the net increase would be 30 to 40 this year. Once we stabilize then maybe year after we will see if we can go aggressive on store opening or not, but that we will decide depending on the results of this year. In terms of digital transformation, our investments in S4 Hana that we must have been talking about has now been implemented in the textile and home part of our business and this will modernize our supply chain and enhance operational agility for FY27 our strategic growth pieces the number one piece is premiumization across all segments.
In suiting, shift towards wool, in shirting shift towards linen, in apparels shift towards the premium category of apparels. The second lever that we are going to push is casualization. In branded textiles we will focus on comfort first fabrics, we will focus on hybrid blends, relaxed visual aesthetics, versatile wearability and knitwear. In branded apparel we will move the product mix towards smart casuals, polos, chinos, T shirt, corduroy, denim, etc. With our core portfolio, ColorPlus is the brand that is positioned as the primary casual brand to spearhead our casualization strategy with our remaining three brands of Park Avenue, Raymond, Ready to Wear and Parks providing robust secondary support to drive this transition.
So number one is premiumization, number two is casualization. We will also go towards GTM expansion in MBOs and LFS counters in large format stores. Our apparels are doing very well with SSPD right up with the top brand of the category and in some lfss we are the top brand. The whole idea is to enter LFSS on the casual section. We will also work on holistic marketing campaigns as we talked about sharper brand positioning for each of our brands, differentiated communication, prudent media selection and last night activities to drive awareness and footfall in our EBOs.
Our ESG commitment would remain and we are advancing towards our 2030 goals including the 25% renewable energy target and 40% female representation in our company. By integrating digital agility with transparent oversight we are building a resilient future ready institution for all stakeholders. We hope that this year of consolidation actually gives us good growth and decent profitability and with that thank you very much and we are now open for questions.
Questions and Answers:
Operator
Thank you very much. We Will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star. And two participants, you are requested to use hand six while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all. You may press star and then one to ask a question. We will take the first question from the line of Vijay Jangir from Systematics.
Please go ahead.
Vijay Jangir
Thank you. Thank you for the opportunity. Ma’, am, my first question is on gross margin. So could you please explain what caused the decline in gross margins as we were doing 54 to 55 percentage of range in gross margins. Now in this quarter we declined to 51, 52%. So first question on gross margin. My second question is on EBITDA margin. So what would be our range for the coming coming to two to three years in EBITDA margin. And additional question is like our gross margin declined but our EBITDA margin expanded.
So like manufacturing expenses went down, employee cost went down. So are these sustainable decline or I mean just one time. So these are my two question on gross margin and EBITDA margin.
Satyaki Ghosh
Thank you sir for your question on the gross margin. I think I mentioned in my commentary that last year in our B2B RLCL luxury cotton, luxury linen business we had got a 53 crore subsidy on our Amravati plant from the government which was a one time growth. So that is in the base. If you take that out then the Q4 will look like 40, 44.7. It’s in the ballpark. And for the year including this 53 crores in the base we have still ended up at 44%. So if you remove that, we will be in the ballpark. There is no drop in gross margin.
The EBITDA has still grown. If you look at our opex, you will see in quarter four our income grew 15%, our opex grew 1.2% and for the year income grew income 11% and opex grew 5% which means income grew faster and that has flown into ebitda. The second thing that you must recognize here, how did the OPEX come down as a percentage? Our factory utilizations which traditionally used to be between 80, 85% have all gone above 90%. There are factories which we have operated at 95% plus also. And this has given us a lot of scale advantage.
It has given us drop in opex. It has given us scale advantage which has flown into ebitda. So these. The whole idea is that if we do a higher turnover this year than last year, then the factories should keep running at this pace and hence the OPEX should be sustainable and hence EBITDA should hold. The third question for you was the future ebitda? We are not giving a guidance at this stage. However, our idea is even in the year of consolidation to keep a double digit top line growth and a double digit bottom line growth.
Vijay Jangir
Okay, sir, thank.
Operator
You. Do you have any further questions?
Vijay Jangir
No, ma’. Am. Sorry sir. And please explain more on employee cost. I mean it is currently 12.5% of the sales in the last quarter. Say last quarter of the 12 to 25 it was 15%. So what caused the decline in employee cost?
Satyaki Ghosh
Sorry, can you repeat the question one more time? Sir, it was not clear this. I
Vijay Jangir
Mean employee costs went down
Satyaki Ghosh
In the
Vijay Jangir
Fourth quarter. It was around 15% of the sales. This quarter she’s around 12 to 13% of the sales. So what caused reduction in close cost advantage? To know absolute basis it decline around 1.5%. So that’s all I want.
Satyaki Ghosh
So two things. One is we stay with our factory efficiencies. When factory produces more, the employee cost per unit starts going down. And on an absolute basis. Because governmenting last year was not getting a lot of orders because of us, the utilization was little low and there labor is a little variable. So that cost got saved. Finally, as you know, we have been for a year or so closing down our non profitable stores. And when you close down your non profitable stores, two things happen. One is your employee cost goes down.
On the other hand, stores that make consistent losses if they get closed down, actually your profit goes up. So you get positive effect from both sides. So we are opening calibrated stores. It’s not that we have closed massive amount of stores. What we have closed, we have roughly opened. But bad stores have gone. So that has reduced employee cost and has also increased profit by a little delta. So you get all kinds of positive effects when you rationalize and do the right things for business. That’s my answer.
Vijay Jangir
Okay, thank you sir. And one more question on store opening in FY27. Could you please repeat? I mean how many stores we are targeting in FY27?
Satyaki Ghosh
So FY27 on a gross basis we’ll try more than triple digit, more than 100 stores. But we will continue our this endeavor which has given us very good, not so good stores we will close down. So I think net basis it will be between 30 and 40 stores. Because this is the year of consolidation. We are not doing anything dramatically different this year. And we will just concentrate on, on giving good growth and good profitable growth on a sustainable basis for four quarters before we embark on the next big journey.
Just to tell you so 100 gross and maybe between 30 and 40 net. Just to tell you that we are also employing one of the big consultancy firms to build a three year strategy for us. The work, the job has been awarded and we will start to work on the strategy piece and then in three months we will start implementing that. So this year as the consolidation year we will do all the right things in the right way. Around governance, around esg, around the way we do our quarter businesses in a profitable sustainable manner.
Get the store economics right, get the factory economics right, build our strategy and from next year we hope with a good base we start the next level of acceleration with a very, very good partner handling it with us.
Vijay Jangir
Okay, sir. And sir, in terms of our emerging and new business, how much is the run rate in terms of these two emerging and new businesses which is included in our branded apparel revenues?
Satyaki Ghosh
How much is about
Vijay Jangir
300 from emerging A new business?
Satyaki Ghosh
It’s more than more than 120 crores. I think. For the year is about 140 crores. But on this 140 crores because we invest in these businesses we incur losses. So when you start looking at the four core brands, if you take out roughly 125, 140 crores of turnover and if you add back the losses to the profit then you start seeing that the four apparel brands actually deliver between 7 and a half 8% profit already. But it gets shaded by all this. And from next quarter we will have show you what is emerging, what is the four, four brands and we will give you the history also if you want because we’ll cut the data like that and we will be consistent with that data.
But right now there is about 140
E C Prasad
Crores
Satyaki Ghosh
And with 80 crores loss. So if you take out from the turnover 140 crores and if you add back 80 crores you will see that business of the brands is looking not so bad as it looks right now in the reporting. 140 crore top line gone, 80 crores profit increased. It just changes the game.
Vijay Jangir
Yeah, got it.
Operator
Thank you. Before we take the next question, a reminder to all the participants. You may press star and then one to ask a question. We will take the next question from the line of Deepali Kumari from Arihant Capital Markets limited Please go ahead.
Deepali Kumari
Yeah, hello. So I have questions regarding geographical so managing plans to reduce US dependency in government. We can’t hear you properly. Yes, am I audible?
Satyaki Ghosh
Yeah, but it’s not very clear if you come closer to the mic or something like that.
Deepali Kumari
Okay, okay, so, so I have questions regarding geographical so management planning to reduce U S dependency in governmenting from 65 to 50. So with this recovery in Q4 following the U S India trade deal, why is the statical shift towards the UK and UA is still a priority given to a potential for this?
Satyaki Ghosh
So ma’, am, I’ll try and explain this to you. We had about 65, 66% dependency on us. Now any sane business will say that when you have high penetration in a vendor or in a customer or in a geography, you are susceptible to root shocks. Now this is what happened to us. As the tariffs started coming in 65, 67% of our business went into trouble. So we started this process of expanding our geographical base and we have, we were scouting in Asian market, strong Asian markets and also European and UK markets.
The advantage that we got was the UK FTA was announced and now the UFO years also. And all though they are not implemented, but will get implemented. So we started getting a lot of interest from these places. And contrary to belief, Europe can give you good margins also. For example, if you look at the West Asia conflict, if you look at from Indian ports, Navasheva this, that to the American ports, the freight cost has gone up. If you look at from these same ports to European ports, they the cost has actually come down last month.
So from a freight perspective also Europe is better and from you know, margin perspective it is not bad and it increases my Europe FTA concentration. But the US orders have also started coming back and hence as a directional guidance I am saying that the garmenting business next year should be good for us because US orders will come back but we will have incremental orders from Europe. So the mix will change, the margin structure will become better and hence our top line, if it grows by high double digits, the bottom line will grow at a much faster pace than that in government.
Deepali Kumari
Okay sir. And so like, have you felt any recent disruption in raw material sourcing or export shipping timelines due to this US Israel one conflict
Satyaki Ghosh
As of now, no. I think when troubled times come, bigger companies are more resilient to hold because we can hold some working capital. Our raw material, two main raw materials come from abroad. One is wool which comes from Australia. There is frankly no major disturbance between Australia and India, it’s also on the other side of the world and containers also available. Freight has also not moved too much. So wool, there is no problem, Sooting has no problem. The only thing that comes majorly from Europe is flax for the linen.
And here I am seeing India to Europe and Europe to India. Freights are actually slightly better in April than March. So going forward we think it will be okay. And all of you have seen today’s headline news, right? That Iran and US are trying to at least take steps forward towards opening state of Hormuz. And it is all over the news today. I think stock markets are going up because of that. And if that happens this quickly, I think we will be very well positioned to take advantage of that.
Deepali Kumari
And so you are also like focusing on shifting the product mix towards wool and linen across all the segments. So what is the expected impact on your ASP and gross margin from this?
Satyaki Ghosh
So the gross margin should go up because two things here. Number one is as you sell more premium products directionally across the margin should go up. However, currently there is a challenge that the wool prices are going through the roof. Merino wool prices, also flax prices are going up. We have information that this year’s crop, flax is one crop a year. But this year’s crop is right now looking good. It gets harvested in September. So it is on the fields right now and it is looking good. But the flax prices are also up.
Now when both prices are up, then protecting margin even in a premium situation can become debatable. So on the one hand we are going for premiumization, on the other hand, raw material prices are up. So we think overall we should still look at some gross margin improvement. But it may not be humongous because there are tailwinds and there are headwinds. Both
Deepali Kumari
Answer on the solicitor side, I guess you are deciding to stop that. So what was the annual drag on EBITDA from this segment
Satyaki Ghosh
Is about 20cr was the annual drag. So that we should get back. But this year to do that we have been. We have had to take. Take some
Mayank Varswani
Provisions. And that is evident, I think in the data that you have.
Deepali Kumari
Okay, answer one last question. What is the margin difference between MBO and Evo and LFS?
Satyaki Ghosh
So the best margins come in Evo because there you are, D2C ma’. Am, it is your product, it is your store and the consumer buys directly from you. There is absolutely no doubt that for any company, EBO is the most profitable channel. After which comes the mbo. Because in MBO you distribute and the consumer buys in lfs. It is like for FMCG company modern trade. LFS is like that for us, that the retailer is also strong and they negotiate. But when they negotiate, you also think that you build brand.
When you go to LFS for example, if you go to a shopper shop and see a beautiful 12ft 16ft wall of park Avenue or Raymond Ready to Wear or ethnics, then it registers to you that this is a brand of importance. More LFSs in ShopperStop lifestyle, you know, Reliance and these kind of central, these kind of NFSs keep your brand. It becomes easier to distribute in MBOs because the MBOs then recognize you as a bigger brand. So everything has its utility, but profit wise, EBO first, MBO second and LFS third.
From a pure profit perspective.
Deepali Kumari
Okay, so sir, what is the targeted revenue split between this channel?
Satyaki Ghosh
So these guidances? Actually we do not provide. But if you look at there’ll be a E Commerce piece also in there. So out of offline you can imagine EBO will be our biggest channel. Followed by MBO followed by LFS in terms of volume. Because LFS are only those many in the country, right? Mbo, there are a lot of numbers and ebo, we are free to sell what we sell and how many doors we want to open.
Deepali Kumari
Thank you so much.
Satyaki Ghosh
Thank you ma’. Am.
Operator
Thank you. We will take the next question from the line of Avinash from Motilal Oswal Financial Services. Please go ahead.
Avinash Karumanchi
Thank you sir. Thank you for this opportunity. So my question is regarding the abandoned textile filament, which is the poor cash cow. So if I look at it like four years back, until now the revenue sales were barely up and the profitability has actually declined compared to the FY23 level. So I mean, I know there is a bit of uncertainty stuff happen in between, but how should we look this segment going forward? What are the opportunities here in terms of the profitability drivers?
Satyaki Ghosh
Sir, can you please repeat the question once more? It is not very clear on this side.
Avinash Karumanchi
Am I audible now?
Satyaki Ghosh
Better now?
Avinash Karumanchi
Yeah. So my question is regarding the branded textile segment which is the cash co for the company.
Satyaki Ghosh
So
Avinash Karumanchi
If I look at the numbers from FY23 to 26 over the last four years, revenue has barely gone up and the profitability has declined. I understand that there are few things that went wrong, but how should we look in this segment going forward? I’m not asking for a guidance, but what would be the drivers of profitability for this segment.
Satyaki Ghosh
So branded textile as a business in India keeps growing at a particular growth rate, low to medium single digit. The business is also moving from particular tier of cities to the next layer of cities where the demand for fabric and stitched fabric still remains. The occasion for stitch fabric is largely around marriages and occasions and diwali and festivals etc. When large scale buying happens. And the good piece here is that the tier 12 cities are coming back to designers and bespoke tailoring.
So more and more in cities like Bombay and Delhi, you’ll see designer shops opening up. They are not only the big designers but a lot of small designers creating bespoke. And that’s an opportunity for fabric business. So fabric business going forward, my take is that should keep growing in lower single digit in volume. We will premiumize. So we will try to do value growth higher than volume growth. We will also casualize like I said, because people are moving from full suits to jackets. They are moving to corduroy.
They are moving to, you know, blended material which suits them in every occasion and every climatic condition. We will adapt to these. We will service the top end boutique distribution. We will go to lower town classes. And as Raymond, we support a large ecosystem of tailoring which we will ramp up from this year onwards. Once more ala almost how you know, hairdressers thing was supported by some of the beauty companies. So we are going to build that. I have experience in it. I came from l’ Oreal and we changed the salon industry.
We will try to do things for the tailor and try to be the best recommended brand. This is a cash cow. Our job is to protect this second on the export side, you know fabric. When you do fabric business, you should also know how to do good export business. Because the world buys readymade. But readymades need fabric. And you can do profitable business in Europe and US by exporting fabrics. So we will explore that with more intensity along with our garmenting business which is pure fabric export. So we will find livers in lower town classes in boutique business, in export businesses by premiumizing, by casualizing, by working with the tailors to build this business.
I believe that we will build gross margins over here. And I believe it will come back to the older, profitable older levels of profitability over a period of time.
Avinash Karumanchi
Okay? Okay, understood. And the next question is same thing regarding the branded apparel. So in this space you have recently built a represent ports of brands. But even if I look at it like the pre index for the rental cost, even at a 2000 crores base also it is still in the loss making. So apart from the A that you’ll be trimming down going forward, what other levers were there for this segment?
Satyaki Ghosh
So our strategy remains consistent. Number one, I’ll reiterate again is premiumization. And number two is casualization. Amongst the four brands, Color plus is our frontrunner for our casualization drive. If you look at the consumer today, consumers are wearing, like I said, less suits but more jumpers, more jackets. People are wearing a lot of knitwear, people are wearing a lot of denim. People come to office with denim. So we will lead this casualization chart with Color Plus. We are changing the entire design system.
We are putting digitization and demand in design system. I don’t want to use the small, the much cliched AI world but today everybody is moving towards that and we are taking steps towards building our design capabilities on AI. So we will shorten our supply chain, we will shorten the turnaround time and we will have much better designs which will come through web crawling of the best of the best in the world. So our design capabilities are going up. Color plus will lead this charge. But if you look at brands like Raymond Ready to Wear and Parks at the lower price point.
But ColorPlus more in the EBO and more evolved segment in terms of Park Avenue and Raymond Ready to Wear. Our casual portfolio is right now about 15% of our total revenues and we are still quite a formal looking brand. The whole idea is to push the limits and take it from it was 10% year before, it’s 15% now to take it it towards 20, 25% and over a period of time aim towards 45% which does not mean that I will let go of the formal segment where I’m strong. I just have to grow on the back of casualization.
In the formal segment we are making special products, the non iron shirts where you don’t have to iron etc. Etc. And we will keep premiumizing and these are the segments that we will focus on where you know the K shipped. Recovery will help us with an opportunity over there. So we will change the design system, we will force casualization, we will work on premiumization, we will improve our product quality and distribution will keep becoming better because I talked about stores opening and stores closing.
We will be more calibrated and keep our appointments. Stores in the higher town classes and stop some stores which are not making so much money and not making sense. So the mix keeps becoming better and it keeps giving us operational efficiency and we get into a virtual cycle.
Avinash Karumanchi
Okay, Got it. And one last bookkeeping question. So the capex for this year is around 180 crores. Can you give the breakup of this and how should this number be going forward?
E C Prasad
So the capex for the next year also would remain almost as similar lines. So of the 180 crores, 50 crores is on account of our SAP implementation that we did about 60 crores on account of our new factory at the. For the garmenting which you, which you have in Hyderabad and the balance are all maintenance capex.
Avinash Karumanchi
I’ll join in the crew. Thank you.
Operator
Thank you. We will take the next question. Before taking that, a reminder to all the participants. You may press star and then one to ask a question. We have the next question from the line of Mayank Varswani from CDR India. Please go ahead.
Mayank Varswani
Thank you for the opportunity. My first question is for Mr. Ghosh sir. It’s still fairly early days in your tenure so would just like to hear your thoughts on, you know what, what excites you with this, you know, hundred year old brand that, that you know you are now at the helm of and you know which of the verticals you know, whether it is the branded apparel or the garmenting do you see, you know, holds. Holds a lot of potential. And you know, if, if it does even come close to potential, we could possibly see doubling or tripling or more over the next three years.
Satyaki Ghosh
So thank you for the encouragement. I missed your name. What’s your mind? Thank you very much. It’s almost like a warm welcome to the job. I’m coming from somebody who’s not my boss or not from the organization. Really happy to get the question. So I’ll tell you my motivation of joining this organization. I think when you get a chance in your life to work for a hundred year old brand and everybody thinks, even analysts like you think that there’s an opportunity of doubling and tripling it. You imagine if you are in the thick of the things and you are the guy who is supposed to lead that it gives you a huge amount of excitement, energy, gives you enough topics to stay awake in the night.
Right. We also know, and you as analysts know that Raymond have promised and always not delivered to that expectation. So I would try to, you know, make promises that I can keep. And I want to be a person who really build this with a lot of passion. There’s an opportunity of cultural change here, there’s an opportunity of complete digitization over here. And then you imagine that you are at the helm of a brand, Raymond, which arguably is a top 10 brand in India amongst Indian brands. If you ask the average consumer Tell me 10 brands on the street, he may say SBI, I don’t know.
He may say LIC I don’t know. He can potentially say Raymond. All of us, I think we have had one Raymond suit. All of you can ask yourself maybe your Shadi suit was Raymond. Mine was for sure. So when I got this opportunity and I thought it’s a 360 degree revival of the brand. But the brand already does 7000 crores, already has double digit EBITDA. So it is not that you are going into a pond where you have to discover the pond. The water is there, you have to clean it and make it bigger and make it much bigger.
I think the opportunity really excited me and hence I came from the vertical that you talked about. I think the biggest opportunity for us is branded apparel. Last gentleman asked me that you built a business of close to 2000 crores. Where do you think it can go? I think if I stay a decade and work a decade for this organization, sky is the limit. We should really double down on branded apparel and build our brands, make them digital, make them relevant for the new age consumer. The big challenge for me would be the brand piece where Raymond.
Everybody thinks it’s my brand because I’m quite old now I’m seeing Satyaki’s brand. Earlier they used to call it uncle’s brand. Now I am the uncle actually. So I don’t want to be the target consumer for Raymond. I want somebody who’s much younger than me to be the target consumer and I have to create it with my marketing team and I am really excited about it. And then there are ancillary brands like Park Avenue, like ethnics. Everybody has a right to live and how do we build the brand Step by step by step.
I think that excites me. But branded Apple, big opportunity. Garmenting I think huge opportunity because nobody makes suits like us. We make suits for brands that on this call I cannot take my customers names. But if you come and meet me someday I can tell you I can take you to my factory and show you which global big brands that you buy suits at. I don’t know what prices are made by Raymond because Raymond is one of the best organization to make suits globally. So shirts also we make well but suits you have to come to us to see how well we make suits in garmenting.
So our product is fantastic. Our reach in US was great. We will double down on Europe and UK and I think this Business can really step up. That’s my feeling. Some of the nascent businesses. Let me talk about our home business turned EBITDA neutral last year and it should make some money this year. Our innerwear business, which we were struggling with, our products are fantastic. So if you go to the market and buy Park Avenue innerwear, you will see the product is as good as the runaway market leader, if not better.
That’s the feedback that we are getting. So this year we will consolidate on innerwear also. We will clean up the system and put new product. But I can assure you that in the next two years, innerwear as a add on to my apparel business would be another profitable business that we still start driving. So there are many, many verticals that I am very excited about. Does that answer your question?
Mayank Varswani
Yes, sir. Wonderful, wonderful. So my next question is for Mr. Prasad. So I’m sorry if this is a repetition. I just wanted to understand. On the store count, as we indicated, we will continue to rationalize the underperforming stores. But you know, we’ve seen the network now come to about 1650 odd stores. So if this continues for the next two or three quarters, do we see the network dipping below 1600 or would it go as low as say 1500? I know the answer.
Satyaki Ghosh
No, no, I will take the question. It will not dip below 1653 in a particular month. It might that I open 10 and close 15. But for the year we will open more than 100 draws and we will close in between 50 and 60. So, so net 40 addition will be there. And at the end of next year, I think you should hear a number around 1700. And this year is about consolidation. Right? So that is why we are not going very gung ho. But ebo, like I indicated to the lady before, is our most profitable channel. And we will take off on this at some point in time.
We just want to be ready. We want to keep our strategy ready. We are working with this strategy partner. We want to understand the clear signs of opening 90% stores that are right because everybody makes mistakes. But we will get all those pieces right. And most probably if we do decent this year, then next year we will really talk about expansion. But that we will see closer to the end of this year. That’s the answer
Mayank Varswani
Noted. And just one last question from my side. You know, fairly commendable performance on the working capital front. So what further levers do we see to take this even lower? I’m talking about the NWC days.
E C Prasad
So I think, I think there are a lot of Lot of levers, especially around debtors. So we have started our reviews trying to bring down our clamp down on the overdue. Outstanding. So all of that has actually helped us. We will also be working on the inventory and we are actually Targeting less than 70 days of working capital. Sorry. Yeah. Less than 70 days of working capital in the next financial year.
Satyaki Ghosh
So we came from 87 to 77 this year. We will target another 8, 9 days to take off from the working capital and give you a much happier picture next year. This is what we attempt. We would attempt, but we think there are enough levers to do that.
Mayank Varswani
Wonderful. And wish you all the best.
Ashutosh Jyoti Aditya
Thank
Mayank Varswani
You.
Satyaki Ghosh
Thank you sir.
Operator
Thank you. We will take the next question from the line of Ashutosh Jyoti Aditya from ICC Securities. Please go ahead.
Ashutosh Jyoti Aditya
Yeah, hello. Thank you for the opportunity, sir. So my question is on a relatively smaller business which is Raymond Ethnics. So just wanted to understand how is the competitive intensity there, how is the demand? And like in last one one and a half years, like after the success of Manchester, whenever there like has been sudden jump in many regional or even smaller players who have come up in this space, especially if you see like up or Bihar market, there are many small players who have actually ramped up.
So I just wanted to understand how is the overall growth here and what kind of opportunities do you see here.
Satyaki Ghosh
So you are right, you know, ethnic’s this Shadi market, Manevar really led it and kudos to them that they did. And hence others have jumped out. The market keeps growing, this market keeps growing and we will participate in this growth. I think we are recalibrating. Like I said, this year is about consolidation. So we are recalibrating this business and we are thinking that, you know, where do we have the right to succeed? There is a maneuver brand which is doing well. Well you are saying last one, one and a half years.
Maybe the growth is not that high for them because others have come in. Exactly what you said. In other markets local players are coming in. And in this category, as you would understand that a Bengali Shadi and the Punjabi Shaadi and the Tamil Shadi and a Maharashtrian Shadi. The dresses are quite different. So it is quite difficult for national brand to, you know, replicate something in their factory like a black suit and sell it everywhere. This is about customization so that we realize after running ethnics for some time, hence we think that for the year of consolidation we will concentrate on the product on two fronts.
On the product we will be rather than Being the bridegroom’s main brand, we would be the brand for everybody else around the bridegroom. So these are lighter products, less structured but the numbers are higher. And once we double down on this, this is like kurtas, bandis, what used to be called Nehru jackets, what is now called Modi jacket, you know those kind of stuff, we will really double down on them because here apart from our ethnic stores we have a right to succeed in our the Raymond shop where you go in to buy suiting, shirting or my readymade apparels, you might want to buy a kurta etc from me and that distribution for me is given.
My EBO network is very solid and it is growing. So I have a right to win as a bridegroom’s friends brand. And I let the bridegroom buy from the local guys who are really sitting in Bihar and know what the Bihari bridegroom wants maybe better than me. Second, I think we will also venture into Indo Westerns which are, let’s say Indo western is a Bant galaxy instead of a sherwani. We make the best suits in the world, at least in the country. There is absolutely no doubt that who makes the best suits.
And in those factories, Bandgala is really a very decorated jacket and we have a right to win on our production capabilities and design capabilities on that. So once again it becomes a bridegroom’s parties dress
Ashutosh Jyoti Aditya
Bandala
Satyaki Ghosh
While the bridegroom may be wearing a sherwani that is very locally designed. So we will get on to this. And the third piece that I talked about is AI stepping into designing. This is the next big tool for us to attack the bridegroom with heavy products. But that maybe we will do after our year of consolidation. This year we will clean up our ethnic business. We will provide merchandise, we will distribute it better through our TRS stores apart from our ethnic stores. And we will attack the bridegroom’s friends while the bridegroom can come in the future, by that time we will get our, you know, hyper local design sensibilities.
Right? Does that understand answer your question?
Ashutosh Jyoti Aditya
Yes sir, I think that is very detailed answer. Thank you. Thank you for that and all the best for FY27.
Satyaki Ghosh
Thank you.
Operator
Thank you. We will take the next question from the line of Dave, an individual investor. Please go ahead.
Dave
Yeah. Thank you for the opportunity and congratulations on a good set of numbers. So firstly on the branded apparel segment, wanted to understand how should we think about the sustainability of this growth momentum we have witnessed going forward. You believe the current growth in this branded apparel can sustain over the next few quarters.
Satyaki Ghosh
Thank you for the question. I think the directional answer is emphatic yes. The only problem in India is that today people are getting a little spooked by the West Asia war. The way the share market is going, when share market doesn’t do well, the affluent class, they don’t lose money. I don’t believe they lose money. They are just seeing their paper money go down and they feel that the, you know, their conspicuous consumption should not be that much. That is the only problem. The growth projections for the country which were at high 7% point, something high, are coming down towards 6.8, 6.6 different agencies are talking about that.
So that indicates that the conspicuous consumption comes down. And branded apparel frankly is not dal, rice, etc. It is not essential. It is just good to have. But most categories that we do business in, right. From my, you know, food FMCG days to personal care FMCG days, I have worked in discretionary categories and discretionary categories in small price points actually bounces back very well because in difficult times you don’t put big investments in big things that you want to do, but you still want to satisfy yourself as a consumer and you buy the smaller things that give you happiness.
And hence I think branded apparel directionally will keep growing. India is urbanizing. India is moving forward directionally and there is absolutely no reason to believe that our growth momentum will drop.
Dave
Right? Right. So that is helpful. And secondly, on this garmenting business, it does go for this current traction to continue going forward. Actually
Satyaki Ghosh
Next year, Dave, should be much better than this year because the US thing has become better. You is responding. Our order books are solid. Let me tell you that my first quarter order books are completely full. I am doing the latter half of second quarter order booking right now. So our order books are solid. Unless something dramatic happens in the Middle east war or you know, US comes back with another 30, 40% tariff under some other pretext. In the current business situation, order books are very robust and there is absolutely nothing to worry about growth in this business.
Dave
So have the inventory levels like across our customers now normalized? Like could that also potentially act like as a tailwind for us in the next 2, 3/4 going forward or
Satyaki Ghosh
Us? I am thinking you are still on the garmenting business. The US pipelines are quite good because
Mayank Varswani
US could not import from a lot of countries, not
Satyaki Ghosh
Only India, people who got 35% also everything that they import, the prices are going up. Right. For the consumer there. So they kept holding Kept holding and they kept selling. So they pipeline, pipelines are decent right now. There is no major in US and US orders are coming back Europe the markets are not great. But like I said every difficulty we have seen post Covid the recovery always has been K shaped. So the premium part of the market actually there is no problem where we operate in Europe as well in the domestic market like I said with 6.6, 6.8, 7.2 these kind of GDP growth numbers, you know if a brand that is not the market leader like our branded apparel sun, we are not market leaders.
If we do not beat the GDP growth percentage then you know you have to do it. And hence I think double digit growth should happen in branded Apple.
Dave
All right, all right. So that is helpful. So that’s all from my side. Thank you and all the very best.
Satyaki Ghosh
Thank you Dave.
Operator
Thank you. We will take the next question from the line of Ujwal an individual investor. Please go ahead.
Ujwal
Thank you for the opportunity. Most of my questions have been answered. I just have one question for Rakesh. He’s on the call, right?
Satyaki Ghosh
Is not there on the call.
Ujwal
Okay. So I had a question that Raymond Limited has bought around 4.85% of our company stock. So what’s the rationale over there? And like are they planning to increase this? I think maybe Prasad can’t answer this.
Satyaki Ghosh
Rakesh will answer this. Maybe the next quarter when we speak you come back with this question. I’ll get Rakesh on the call.
Ujwal
Okay. Okay. Thank you. And all the best for this year.
Satyaki Ghosh
Thank you sir.
Operator
Thank you. We will take the next question from the line of Amrish Kumar Singh, an individual investor. Please go ahead.
Amrish Kumar Singh
Good evening Mr. Satyaki. Congratulations on your new job and wish you all the best. And because we are in this time the question to you is like our corporates, I’m sure you work on numbers, forward looking numbers. So what is the revenue targets that you see three years, five years and 10 years down the line. During the call I heard you say ten years from now. I wish you and me both are here. What are the numbers we are looking at?
Satyaki Ghosh
Sir, I have done 100 days of Raymond job and I have done 88 days of the job. After taking charge I have taken charge of the 9th of February. You are talking to me on the 7th of May 88 days and February is a smaller month if I calculate it lesser. So difficult for me to talk about 10 year and 5 year turnover plans. But directionally in these first 90 days I have gone through a process, pitch process of the top consultants of the country and we have finalized one of them. We will shortly announce that and they will work on our long term strategy for us.
We will work together and see what are the opportunities, what are the levers that we can push and how can we take this company somewhere. Another individual investor I think said that Raymond can double, can triple if you push the right levers. So mentally I am there with you. Number wise I’m not sure because I’m still new in this business though I’m absorbing very, very fast and totally in charge right now. But I would like to give it some more time before I start committing these kind of numbers.
Amrish Kumar Singh
Got it sir. A leading question from here. What is the timeline we have with our consultant to come up with a plan? Can we look at it in the next phone call?
Satyaki Ghosh
Most probably no because we’ve just finalized so one round of cost negotiation Prasad and team will do and so that you are an investor in the company. You don’t want to ask to hire a consultant at the wrong price. We will get the price rise and maybe if we start now they will start work around 20th, 25, May if not the 1st of June because they’ll have to get a team together etc. Etc. Strategy project is also somewhere between 12 to 14 weeks and then presentation under two weeks. So let’s look at 16 weeks.
So June we are looking at October I think November ish. We should have a plan and start execution on it let’s say third quarter. So after that maybe we can have a discussion.
Amrish Kumar Singh
Thank you Mr. Ghor. I say directionally we are on track and hope we keep attaching all the best.
Satyaki Ghosh
Thank you sir.
Operator
Thank you. A reminder to all the participants, you may press star and then one to ask a question. Thank you very much ladies and gentlemen. As there are no further questions from the participants but that concludes the question and answer session, I now hand the conference back to Mr. Satyaki for the closing comments. Thank you. And over to you sir.
Satyaki Ghosh
Thank you ma’. Am. I would like to thank all the investors, whether you pop corporates or individual investors for attending the call and asking questions that were very, very pertinent and thought provoking. Some of the questions we are taking back with us, we will try to answer them in due course of time. Like the last gentleman’s question. Also we just want to assure you that a new management team, from group CFO to me to your CFO which is Raymond Lifestyle cfo, your new cmo and we are right now on the lookout for a new CIO which hopefully we should be able to announce next quarter.
We creating a new management team. We are really excited about this 100 year old brand and its transformation. This year will remain the year of consolidation after the year of recovery. Recovery where we have recovered well. Double digit top line growth. High, very high double digit 20% plus bottom line growth. We will look at this year once again as a double digit growth. In the year of consolidation. Bottom line should grow faster than top line. So we will give you decent returns this year. And if we consolidate and build our strategy well this year then next year maybe we will talk to you about some kind of acceleration and moving forward.
But thank you very much meanwhile for remaining invested. I’m Satyaki. I have worked with big multinationals globally. In Paris with l’, Oreal, in Thailand with abg, in Hong Kong with Pepsi. I come with the best practices from these organizations. I work for General Electric and I approach really committed to turning this Raymond lifestyle business around. Along with you know Rakesh Prasad Kalpana and all of them. You are in good hands and we hope we will deliver on our promises this year. Thank you very much.
Operator
Thank you members of the management. On behalf of Motilal Oswal Financial Services. That concludes this conference. Thank you all for joining with us today. And you may now disconnect your lines. Thank you.