Raymond shares rally over 57% in two weeks; what's fuelling the surge?

Shares of Raymond Ltd extended their sharp rally on Friday, surging 19.97 per cent to hit a fresh record high of Rs 1,024. The stock was last trading 15.52 per cent higher at Rs 986, taking its gains over the past two weeks to 57.08 per cent.

The stock witnessed heavy trading activity along with the sharp price movement. Around 9.65 lakh Raymond shares changed hands on BSE, significantly higher than the two-week average volume of 2.66 lakh shares. Turnover on the counter stood at Rs 92.51 crore, while the company's market capitalisation (m-cap) was at Rs 6,554.52 crore.

Ravi Singh, Chief Research Officer at Master Capital Services, said, "Raymond is witnessing strong buying interest as the government is considering extending the customs duty exemption on raw cotton beyond October 31, which could provide further relief to textile manufacturers facing elevated input costs. An extension would support margins and improve sentiment across the textile space, making the move positive for Raymond as well."

Singh added, "The company has also approved the issue of 33.29 lakh convertible warrants to Minerva Ventures Fund at Rs 645 per warrant, raising up to Rs 214.71 crore, which adds another positive element from a funding perspective."

On the technical front, Singh said, "Raymond has shown strong relative strength and has touched a fresh all-time high. The stock continues to maintain a positive price structure with strong momentum, indicating that buyers remain firmly in control. With the trend intact, the upside can extend further towards Rs 1,130. Any meaningful dip should be seen as an opportunity to accumulate, rather than an indication of trend reversal. The overall setup remains bullish as long as the stock sustains its higher-high and higher-low structure."

Kranthi Bathini, Equity Strategist at WealthMills Securities, said Raymond's expansion of its precision engineering business into aerospace manufacturing was positive for its medium- to longer-term prospects.

"Raymond is expanding its precision engineering division into aerospace manufacturing, which is one of the sunrise sectors in India. The company's order book and earnings visibility look promising from a medium- to long-term perspective. Investors with a long-term horizon can hold on to the counter," Bathini stated.