Multibagger stock: Up 76% from 52-week low! Brokerages see up to 58% upside in this smallcap stock

Shares of Raymond have delivered over 260 per cent return in the last two years. The multibagger stock has recovered around 76 per cent from its 52-week low of Rs 717.95, hit on March 28, 2022. It hit a 52-week high of Rs 1,644 on December 16, 2022.

According to Systematix, the smallcap stock has seen a significant re-rating in the past
year, as the company turned around operations and achieved its stated objectives. The presence of multiple triggers like real estate, ethnic wear, and FMCG coupled with the new management’s efforts to pivot the businesses and make them more relevant, should help drive consistent growth and earnings going forward. 

It has initiated its coverage with a 'Buy' rating, with a target price of Rs 1,832 and believes that Raymond finally looks well placed to realize its full potential and unlock shareholder value, post a change in management and a strategy rejig. While the past growth has been slow and the branded apparel business performance has been volatile, the current management team looks committed and energized to aggressively drive its agenda of Go To market revamping, digital integration, cash generation and cost rationalization.

Systematix said that branded shirting, branded apparel (especially ethnic wear), garments and real estate are key growth engines, with margins likely continuing to inch up on continued premiumisation across segments, coupled with operating leverage benefits. 

"Recent initiatives on the planned listing of the engineering business, subsidizing the real estate business and consolidation of B2C businesses including apparel into Raymond Ltd are
value-accretive moves," it added.

Quantum Securities believes that strong demand for ethnic wear, garments, shirting and branded apparel would help Raymond to clock 19.7 per cent CAGR revenue growth over FY22-24E.

"We also expect Raymond’s EBITDA margin is expected to witness 290 bps improvement over FY22-24E due to sharp growth in revenues and better margins from the garments, branded apparel and engineering segments. Raymond trades at a P/E of 12.9x FY24E PAT of Rs 634.7 crore. We recommend a 'buy' rating on Raymond, with a price target of Rs 1987, implying an annualized upside of 58 per cent from the current levels," it added.

About Raymond Limited

Raymond is India’s largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabric and garments. It has some of the leading brands within its portfolio – ‘Raymond Ready to Wear’, ‘Park Avenue’, ‘ColorPlus’, ‘Parx’, ‘Raymond Made to Measure’ and Ethnix by Raymond amongst others. 

The company forayed into the realty sector through the launch of its maiden project TenX and has recently launched a premium residential project – The Address by GS housing.