Raymond Lifestyle: What's ahead after a difficult FY25? Stock price target & more

MOFSL on Wednesday said FY25 was a challenging year for Raymond Lifestyle Ltd -- the demerged arm of Raymond Ltd, due to lack of wedding days in the first half of the financial year, impact of ransomware and the overall weak discretionary environment in the second half of the year. 

The domestic brokerage, however, sees a growth recovery in FY26-27 on a low base.

"After the recent correction (down 51 per cent YTD), Raymond Lifestyle's valuation appears attractive at 21 times FY26E PE or 1.3 times FY26 EV/sales. However, we believe improvement in execution and sustained growth recovery remain the key for re-rating," MOFSL said.

The broking firm has cut its FY26 Ebitda estimate by 5 per cent, while its estimate for FY27 Ebitda is broadly unchanged. Due to higher finance costs, it cut its FY26-27 EPS estimate by 6-13 per cent.

In the March quarter, Raymond Lifestyle had a tepid show, as the weak consumer sentiment was further exacerbated by a ransomware attack impacting revenue and Ebitda to the tune of Rs 250 crore and Rs 70 crore, respectively.

"Although the overall demand environment remains challenging, there are signs of improvement, with stronger secondary sales and a 12-13 per cent increase in autumn bookings," MOFSL said. 

The broking firm believes improvement in execution and sustained growth recovery remain the key for re-rating of the stock.

"Weak demand persisted throughout FY25 due to inflation and lower discretionary spending, but signs of recovery are emerging with improved secondary sales and 12-13 per cent YoY growth in AW2025 bookings. EBOs and LFS saw better sales in March–May," MOFSL said.

The brokerage valued the stock at 22 times on March 2027 basis to arrive at a target of Rs 1,500 against Rs 1,600 earlier. "We reiterate our BUY rating on RLL, primarily due to reasonable valuations," it said.

Raymond Lifestyle expects revenue growth of 10-15 per cent in FY26, driven by demand recovery, dealer restocking, and easing inflation. 

Profitability is set to recover strongly as scale improves and store performance stabilises, MOFSL noted. Steady-state margins are targeted at 20–22 per cent for Branded Textiles and 14–15 per cent for the overall business, it added.