Raymond Banks On Lower Capex, Tax Cut Benefits To Aid Debt Reduction
The logo of Raymond Ltd. is pictured at the entrance of its headquarters in Mumbai, India. (Photo: BloombergQuint)

Raymond Banks On Lower Capex, Tax Cut Benefits To Aid Debt Reduction

WATCH | Raymond’s Group CFO Sanjay Bahl on the company’s Q3 results

Raymond Ltd. expects to further pare its outstanding debt in the fiscal year 2020-21, on the back of lower capital expenditure and benefits from the reduced corporate tax rates.

“The debt reduction in the third quarter was facilitated by infusing of Rs 350 crore from the land sale, preferential share allotment and also the free cash flows we generated,” Sanjay Bahl, group chief financial officer at Raymond, said in an interview to BloombergQuint. “Free cash flows will continue into the next year with low capex in our plans and tax benefits.”

The textile firm, which recently demerged its branded lifestyle business, reduced its long-term debt to Rs 2,415 crore at the end of December quarter from a peak of Rs 2,850 crore in September, Bahl said. JK lnvesto Trade, an associate firm, sold its land in Thane during the quarter. The transaction boosted Raymond’s profit by Rs 167 crore.

Raymond Q3 Results 2019-20: Key Highlights (YoY)

  • Revenue rose 12.5 percent to Rs 1,885.4 crore
  • Net profit up 5.2 times to Rs 195.3 crore
  • Net profit (excluding Thane land sale) down 4 percent to Rs 36 crore
  • Ebitda rose 33.4 percent to Rs 206.2 crore
  • Margins at 10.9 percent versus 9.2 percent

Also Read: ‘Raymond’ Brand To Remain With New Demerged Lifestyle Firm

Shares of the Mumbai-based company jumped 4.7 percent intraday to Rs 705 apiece compared to a 0.6 percent advance in the Nifty Index.

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