Raymond Lifestyle's valuation is attractive. Buy for Target Price ₹1500 (+49% upside)
Posted: Wed May 14, 2025 9:18 pm
Motilal Oswal is bullish about Raymond Lifestyle & has recommended buy for 49% upside
Weak quarter; demand recovery key for re-rating
Raymond Lifestyle’s (RLL) reported tepid performance as the weak consumer sentiment was further exacerbated by a ransomware attack impacting revenue/EBITDA by ~INR2.5b/INR 0.7b.
Although the overall demand environment remains challenging, there are signs of improvement, with stronger secondary sales and a 12-13% increase in autumn bookings.
After the recent correction (down 51% YTD), RLL’s valuation appears attractive at ~21x FY26E PE or 1.3x FY26 EV/sales. However, we believe improvement in execution and sustained growth recovery remain the key for re-rating of the stock.
We cut our FY26E EBITDA by ~5%, while our FY27E EBITDA is broadly unchanged. However, due to higher finance costs, we cut our FY26-27E EPS by 6-13%.
Valuation and view
FY25 was a challenging year for RLL, driven by lack of wedding days in 1H and impact of ransomware and overall weak discretionary environment in 2H. We expect growth recovery in FY26-27 (on a low base).
After the recent correction (down 51% YTD), RLL’s valuation appears attractive at ~21x FY26E PE or 1.3x FY26 EV/sales. However, we believe improvement in execution and sustained growth recovery remain the key for re-rating .
We cut our FY26E EBITDA by ~5%, while our FY27E EBITDA is broadly unchanged. However, due to higher finance costs, we cut our FY26-27E EPS by 6-13%.
We value RLL at 22x on Mar’27E P/E to arrive at our TP of INR1,500 (earlier INR1,600). We reiterate our BUY rating on RLL, primarily due to reasonable valuations.
We value RLL at 22x on Mar’27E P/E to arrive at our TP of INR1,500. We reiterate our BUY rating on RLL, primarily due to reasonable valuations.
Weak quarter; demand recovery key for re-rating
Raymond Lifestyle’s (RLL) reported tepid performance as the weak consumer sentiment was further exacerbated by a ransomware attack impacting revenue/EBITDA by ~INR2.5b/INR 0.7b.
Although the overall demand environment remains challenging, there are signs of improvement, with stronger secondary sales and a 12-13% increase in autumn bookings.
After the recent correction (down 51% YTD), RLL’s valuation appears attractive at ~21x FY26E PE or 1.3x FY26 EV/sales. However, we believe improvement in execution and sustained growth recovery remain the key for re-rating of the stock.
We cut our FY26E EBITDA by ~5%, while our FY27E EBITDA is broadly unchanged. However, due to higher finance costs, we cut our FY26-27E EPS by 6-13%.
Valuation and view
FY25 was a challenging year for RLL, driven by lack of wedding days in 1H and impact of ransomware and overall weak discretionary environment in 2H. We expect growth recovery in FY26-27 (on a low base).
After the recent correction (down 51% YTD), RLL’s valuation appears attractive at ~21x FY26E PE or 1.3x FY26 EV/sales. However, we believe improvement in execution and sustained growth recovery remain the key for re-rating .
We cut our FY26E EBITDA by ~5%, while our FY27E EBITDA is broadly unchanged. However, due to higher finance costs, we cut our FY26-27E EPS by 6-13%.
We value RLL at 22x on Mar’27E P/E to arrive at our TP of INR1,500 (earlier INR1,600). We reiterate our BUY rating on RLL, primarily due to reasonable valuations.
We value RLL at 22x on Mar’27E P/E to arrive at our TP of INR1,500. We reiterate our BUY rating on RLL, primarily due to reasonable valuations.