Raymond Ltd (NSE: RAYMOND) Q4 2025 Earnings Call dated May. 13, 2025
Corporate Participants:
Amit Agarwal — Chief Financial Officer
Harmohan H Sahni — Chief Executive Officer of Realty
Analysts:
Biplab Debbarma — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Raymond Limited Q4 and FY ’25 Earnings Conference Call hosted by Antique Stock Broking Limited. 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 the conference call, please signal the 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 Beplag from Antique Stock Broking. Thank you, and over to you, sir.
Biplab Debbarma — Analyst
Thank you. On behalf of Antique Stock Broking, I would like to welcome all the participants in the Q4 FY ’25 and FY ’25 conference call of Limited. Today, we have with us some senior management of, Mr, who is President, Corporate Commercial; and then Mr Amit Agarwal, Group CFO; Mr Harmahan Sani, Executive Director and CEO of Realty Business; Mr Maini, MD Engineering business; Mr Jatin Khanna, Head, Development; and Mr Desa, Head, Investor Relations. Without taking further time, I would like to hand over the call to Mr Amit Agarwal. Over to you, Amit.
Amit Agarwal — Chief Financial Officer
Thank you. Good evening, everyone. Thank you for joining us today for our 4th-quarter fiscal ’25 and fiscal ’25 annual results conference call. I hope everyone has had an opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchanges as well as on the company’s website. Before we delve into our quarterly performance, we wish to express our heartfelt condolences to those affected by the tragic events in. Our thoughts are with the victims and their families during this difficult time. We stand-in solidarity with the people of India and support efforts to restore peace in the region. Moving ahead, it is essential to reconsider the broader macroeconomic landscape that has influenced our performance and strategic decisions.
In terms of the global landscape, which continues to be challenging and unpredictable with geopolitical dynamics causing various fluctuations. Recent policy changes have introduced a degree of uncertainty impacting markets worldwide. However, we believe India stands in a unique position to potentially benefit from these global economic shifts. In the short-to-medium term, we are witnessing a scenario where inflation is visibly under control and monetary policy is becoming increasingly supportive. The Reserve Bank of India has already reduced interest rates by 50 basis-points with further cuts anticipated throughout the year.
The Indian economy is projected to have grown by approximately 6.5% in the fiscal 2035. While this is slightly lower than the growth rate in fiscal ’24, India remains one of the fastest-growing economies globally. The ongoing support from monetary policy, including interest rates, production and regulatory changes has enhanced liquidity in the market. The environment is expected to sustain recent economic performance over-time. Additionally, the union budget for has been favorable towards urban consumption and middle-class households by introducing tax cuts and the provision of INR1 lakh crores, which would be made available in the hands of the taxpayers.
As a result, we anticipate a substantial increase in the purchasing power within the housing segment. This segment, which has experienced lower-growth over the past two years compared to other parts of the housing market is expected to become a key driver of the growth over the next 12 to 24 months, thereby offsetting any potential weakness in other areas of the housing market. Let me now give you an update on the demerger process. I am pleased to announce that we have successfully demerged our real-estate business and received all necessary approvals and we expect to be listing the real-estate business in the second-quarter of this fiscal year ’26.
This will position Raymond Reality to pursue its growth trajectory as an independent pure-play real-estate business. The scheme has become effective from the 1st of May 2025 and the record date is 14th of May 2025 for the purpose of determining the eligible shareholders of demerged company Raymond Limited to whom the equity shares of the resulting company Raymond Reality Limited would be allotted in terms of the scheme. According to the scheme of arrangements, each shareholder of Raymond Limited will receive one share of Raymond Reality Limited for every share held in Raymond Limited. In the engineering business, as mentioned earlier, two new subsidiaries of Raymond Limited will be created through a scheme of arrangement, one focused on aerospace and defense and the other one on auto components and engineering consumables, each charting its own path for growth and a primary objective of the value-creation. Currently, we have filed the restructuring scheme with the NCLT for the engineering business and awaiting the final approval.
Now let me talk about the quarterly performance. And before that, considering the successful demerger of the real-estate business, Raymond Limited now comprises of engineering business as consolidated continuing operations. So our 4th-quarter fiscal ’25 and fiscal annual ’25 results have been split in two-parts. One, which is the continuing operations with engineering and others and segment, which is a real-estate business. As far as our continuing operations of Raymond Limited is concerned, Raymond Limited delivered a strong quarterly performance, reporting a total income of INR601 crores with a delivery of an EBITDA of INR99 crores and with margin of 16.4% in the 4th-quarter of fiscal 2025.
The total income for the year was INR2,105 crores and delivering an EBITDA of INR335 crores and EBITDA margin of 15.9% in the fiscal 2025. Kindly note that the above performance includes this other income and also is reported post the acquisition of precision completed in March 2024. At the segment level, if we talk about the engineering business, which includes the MPPL Money Precision business reported a sales of INR528 crores and EBITDA of INR81 crores with a margin of 15.3% in the 4th-quarter of fiscal ’25 versus the sales of INR234 crores with an EBITDA of INR37 crores and an EBITDA margin of 15.6% in the 4th-quarter of fiscal ’24.
In the engineering sector, the auto ancillary segment experienced robust growth in the domestic market. However, export markets remain subdued for auto ancillary and engineering consumable segments, primarily due to ongoing slowdown in the European automotive market and the disruptions caused by the sea shipping crisis. Looking ahead, we anticipate growth momentum in the aerospace business following the resolution of the production issues faced by one of the major aircraft manufacturers, which has previously led to delays in order fulfillment.
Now let me talk about the debt and the cash position at Raymond Limited. We continue to remain a net debt-free business with a net cash surplus of INR263 crores in the March 2025. The total gross debt stands at INR677 crores and have cash-and-cash Equivalents of INR940 crores as on 31st of March 2025. In terms of the operations, the aerospace business has started showing promising signs, which was earlier impacted by ongoing production issues leading to delays in dispatches. We have witnessed signs of recovery and the business is getting back on-track. Additionally, recent softness in the auto sector component sector due to weaker market may impact the growth in the near-term. Looking ahead, we remain optimistic about our growth prospects. Our diversified business portfolio, strong market position and strategic initiatives will continue to drive value for our stakeholders. Now let me also talk about the real-estate segment, which is the segment to give clarity to all of you, in the 4th-quarter of fiscal ’25, the company signed two additional joint development agreement, one in Mahim and another one in Vadala aggregating to a gross development value of INR6,800 crores. Both these projects are poised to contribute substantially to our future growth and solidify our presence as a key player in the Mumbai metropolitan region. With these additions to the total production — total potential revenue from our current real-estate business is now reaching close to INR40,000 crores, which includes INR25,000 crores from our Thane land parcel and INR14,000 crores from the JDA-led business model. The construction momentum across all our launch projects, both in Thane and Bandra is progressing well, demonstrating our commitment to timely delivery and adherence to high-quality standards. In all our projects, we are ahead of construction timelines and a comprehensive update on the construction of our projects is provided in our Investor Day. We continue to witness a positive response and traction in our residential and high-street retail projects. We have also received a booking of INR636 crores in the real-estate business, primarily driven by the demand for the address by GES 2.0, 10x Era, sale of retail shops in Thane as well as JDA project of address by GES in the Bangalore project. We at Raymond Reality offer luxury — affordable luxury apartments ranging from one VHK to-4 VHK that caters to multiple segments of the society in a status strategy to sell and construct fast, leading to quick project completion and faster revenue generation and that has resulted in a revenue of INR766 crores in the 4th-quarter of fiscal ’25 vis-a-vis INR677 crores in the 4th-quarter of fiscal ’24, recording a growth of 13%. The segment reported an EBITDA of INR194 crores in the 4th-quarter of fiscal ’25 compared to INR171 crores in the 4th-quarter of fiscal ’24, which is a year-on-year growth of 13%. EBITDA margin stood at 25.3%, flat in-quarter four ’25 vis-a-vis quarter-four FY ’24. We continue to remain a net debt-free business in the real-estate as well with a net cash surplus of close to INR400 crores in March 2025. We remain optimistic about the continued growth in the real-estate market. Overall, our project pipeline remains strong with several developments slated for launch in the upcoming quarters. We are committed to future expansion through an asset-light business model via the Joint Development Agreement route aiming for a 20% year-on-year growth in the booking values. Thank you again for joining, and we would be more than happy to take your questions. We may open the line for questions. Operator?
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you will press and two. Participants are requested to use handsets while asking a question ladies and gentlemen we will wait for a moment while the question queue assembles participants, you are requested to press star and R&1 to join the question queue. Participants please press R&1 to ask a question. Participants please press R&1 to ask a the first question is from the line of Ujwal Lal, an individual investor. Please go-ahead.
Unidentified Participant
I wanted to ask on the Realty division fund. What is the generally like unique funding requirements from our side in these three days? And at what rate are we able to get construction funding and how does it differ from other leading developers?
Amit Agarwal
Yeah. Harmon, will you answer the first part and second part I will answer?
Harmohan H Sahni
Yeah. Yeah, sure. So basically for each JDA, considering the size that we are looking at is upward of INR1,500 crores to INR2,000 crores of GDV for each project, on an average, the peak funding requirement ranges between INR250 crores to INR350 maximum going up to INR400 crores. Depending on project-to-project, it can be different, but that’s the range between INR250 crores and INR400 crores. And Amit, do you want to answer the second part?
Amit Agarwal
Yeah, yeah. So basically, you see the interest-rate anything between 8 to 9.9 a quarter and that is the rate because the company enjoys a good credit rating and has demonstrated very well. So that’s the reason we get these competitively.
Unidentified Participant
Yes, thank you. And just another question. Like I think in all or most of our projects, we have contracted the contracted capacity and do we continue to plan to do the same or do we also have contracts with some other contractors?
Harmohan H Sahni
So the way the contracting entire process moves is it’s a competitive bid for each project that we float and various contractors or different caliber port for that. Then a negotiation takes place two, three rounds of negotiation and finally a contractor is decided basis that. So now we have a have capacity for some of the initial projects that we have granted, but we have used other contractors, smaller contractors also for part of the work. And going-forward also, it will be a competitive bidding process. Now whosoever gives us the most competitive bid and also wins on the various attributes in terms of financial strength and capability to give us quality and build, we’ll win the contract. So nobody is fixed in that sense.
Unidentified Participant
Okay. And just like on the JDF front, how is the launch pipeline looking like can we launch Mahind in Q1 or any other like the sequential JDS which we have signed, how is the launch pipeline looking for this year, both in and JDS.
Harmohan H Sahni
So Q2, in the current year, you will see a few launches from us, but they will all be in Q3 and Q4. You may — you may see in Q2 some launch in Khana in Khana. But Q1, we haven’t scheduled any launch because usually it’s generally a low period and not many launches also take place.
Unidentified Participant
Okay, sure. And like maybe a detailed answer since there are not many participants on the call. Can you please like inform us about the whole timeline of a JDA, like how it works right from the discussion and getting the contract and clearances, etc to construction and launch.
Harmohan H Sahni
So certainly, Sal sir, see, each JDA is different. If it’s a society development, it’s a slightly longer time cycle because of the legal process it has to go through and many players get involved as far as the society management is concerned. So that’s usually a 15 to 18 months, sometimes even can even stretch to 24 month process from the time you get appointed to the time you can launch the project. But some of the other JDAs which are not going through the society redevelopment or if somebody has already done the work and we are getting involved at a later-stage , then it can be even as short as nine to 12 months that from signing to actual launching of the project. So that’s the range typically from 12 months-to 24 months for each ADA from the time you get appointed and to the market launch and all the intervening steps happen in-between, which is approval, planning, etc., etc.
Unidentified Participant
Thank you very much and all the best for this year.
Operator
Thank you participants to ask a question please press star and 1 mister Biplab, you can ask your question. Please go-ahead
Biplab Debbarma
Yes, but oh, sorry. Sorry, I was under mute. Hello. Good afternoon. Hey everyone. Good afternoon. So I have three questions. I will start with overall how is the market that is the primary concern of all of us analysts and investors. So my first question is on the real-estate state of real-estate, residential real-estate. How has residential real-estate sales trended over the last three, four months, including May, April? Are we beginning to see any signs of moderation in absorption of beef in footfalls or lower conversion — conversion rates or overall buyer 17 months softening? That is my first question.
Harmohan H Sahni
Yeah. So I’ll take that, Amit.
Amit Agarwal
Yeah, please
Harmohan H Sahni
See yeah. So as far as Q4 of last year is concerned, Jan and Feb were usual months, there was not too much of, let’s say, FMS or that we saw in the market, but March was extremely good. Yeah, March, we saw very, very good demand, much better than we usually see in that month of the year. So we got substantial bump-up in the month of March. So whatever slowness was there in Jan and Feb kind of got up in that. So quarter was pretty good for us.
In April and May so-far, the — it’s business-as-usual, barring the last one-week, we saw some dip in the falls, I guess there was — that was more to do with the peer and the uncertainty because of the wildlife situation, which got created and the inquiries seem to be flowing back as of yesterday itself again calls or whatever people were holding back since the views of ceasefire has come.
Again the phone calls have been ringing and people are already booking for the coming weekend and who they have to come and see the sample apartments and so footfalls are again back barring these few days. So on the whole market, it seems to be good for us for all our projects, wherever we are present, we haven’t really seen any dip on a quarter-on-quarter basis. Yeah, of course, every week or every month is not the same as every other month and it’s also a slightly seasonal business. This is the period of summer vacations in any case. So of quite a few people are traveling from the city. So our planning also is according to that in terms of the way we budget for what will be the sales in April and May, but they seem to be completely on-track and on plan as we get budgeted. So the market seems good for us.
Biplab Debbarma
Okay. That’s a good news. And second question is on the supply that coming into MMR vision. So do you see supply increasing across NMR? I mean, and at least you can see whether there is an increase in number of competitions around your projects. But the reason is particularly as you know several developers who acquired FAR at discounted date a few years ago and they would be — they might have launched and they would be launching — beginning to launch projects. How do you expect the market to evolve as this new supply comes in? Especially in terms of pricing or if pricing doesn’t soften, then maybe absorption or so basically trying to understand the competitive intensity across MMR, that is my second question.
Harmohan H Sahni
So see as of now, the supply scenario seems to be well-balanced and not very different from what it was last year or in fact, the supply has only been going down in the market as the absorption has been increasing. So the number of launches have not really been able to keep pace with the demand which has been in the market. So — and that’s why last two years, you’ve also seen the prices also firming up little bit, while they’ve been very, very healthy in terms of appreciation, they haven’t run away. So which is also a good part. Now going-forward, it is to be seen how many launches actually hit the market.
I know this is a question which was asked earlier also as to how long it takes for a project to actually hit the market. So the time-to-market for a project is typical 24 months if a developer is very efficient. I mean that’s how our market operates in any case. And some of the players intentionally hold back launches or some of them are not as efficient. So if you take all that into account, I really don’t know-how many launches are planned for Q1, but whatever little bit we know, I don’t think there is going to be any dilution of supply or large number of launches, which may happen.
Also, there are artificial constraints which are there because approvals also get delayed to some extent in that, for instance, there is a Supreme Court case going on for the environment approval just now. So some of the projects who get impacted by that, if they are within a certain vicinity of an ecosensitive zone and Bombay also gets impacted with that because National Park is right in the heart of the city. So some of those projects will also get delayed in terms of getting their approvals. So taking all that into account, I don’t think supply scenario is going to change dramatically in the next three to six months.
Biplab Debbarma
Okay. That’s both the question sir. I mean regarding demand as well as supplying, these are very encouraging. And my third question is to bottom-line, sir. Basically, just wanted to know, you know there are so many things happening in the country and across the world that it’s difficult to take a firm outlook. So just trying to understand, sir, bottom, sir, what is your outlook of aerospace and auto? How do you think — do you think things should pan-out in the next one year
Operator
You’re there in the call and they can speak. Their line is unmuted. Mister Gautam, please unmute yourself from your side to speak. The line for the management is disconnected.
Ladies and gentlemen, please wait till I bring them back-in the car not available at the tone please record your message when you have finished recording you may hang-up we Have the management back with us. Sir, can you please try?
Unidentified Participant
Yeah, just told
Amit Agarwal
Yeah, extremely sorry that our line got disconnected., you are there
Operator
Mr Gautam is there in the call
Amit Agarwal
Yeah Gautam there was this question on the outlook about the aerospace and auto business. I don’t know whether it was got answered or you have yet to answer, please answer that.
Harmohan H Sahni
Operator, have you connected mister many?
Operator
Yes, you are there in the call.
Harmohan H Sahni
Have you unmuted them because they.
Operator
Yes, they are unmuted.,
Harmohan H Sahni
Can you hear us?
Biplab Debbarma
They handset many unmuted. Just tell them to check their hands
Operator
Yeah, yeah the line forgotten, sir disconnected. I’ll connect them again are you able to get to, or Mister is back-in the call.
Harmohan H Sahni
But I could — yeah.
Unidentified Participant
Yeah, I could listen to everything, but I think you couldn’t hear me. So I heard — I heard the last question was the aerospace and automotive market. If we are there, then I can continue.
Amit Agarwal
Yeah, please, please, please.
Unidentified Participant
Okay. So basically, let me start with the aerospace market. I think the markets now are looking very good compared to last year. As you’re all aware, last year there was a serious problem with the Boeing aircraft. They had their own internal issues. And because of that the aircraft production from Boeing was severely impacted.
You’re also aware that between Airbus and Boeing, they capture the majority of the aircraft market and hence, it’s a big relief for Boeing to come back to its levels. It’s public information that the narrow oil aircraft already producing now 32 at a rate of 32 plus and they are moving towards 38 aircraft. So we can already see the pull and those reflect in the last numbers of the last quarter. So the aerospace market is definitely recovering and all the — and it will continue in that pace.
You’re all aware that aerospace is a market which has eight to 10 years of backlog and therefore barring incidents which are not related to business such as we saw in the days of the COVID or we saw in days of maybe there is a strike or some unnatural thing that happens. Otherwise, the aerospace market is extremely bullish going-forward as well as due to the high backlogs. In terms of automotive, it’s a mixed — mixed market, I would say.
The automotive markets in India are still much better. The ones overseas are definitely falling. But the news that we have to look at is that even though markets are falling, the supply-chain constraints in both Europe and US are going to be high. The geopolitical situations will definitely are working out and we’re all seeing changes on a daily basis. We strongly believe that overall it will still remain positive for us because of those situations. And of course, as of now, since our major markets are in Europe and in the US, we don’t immediately see any issues due to the current affairs.
So yeah, overall, I would say we are looking-forward to the coming year. Thank you.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr Amit Agarwal for closing comments. Over to you, sir.
Amit Agarwal
Thank you. Thank you, everyone, participants. Thank you very much for taking interest in Raymond Limited and now we will have the into real-estate as well as Raymond Limited will have the engineering business and look-forward talking to you on next quarter. Thank you.
Operator
On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines