Raymond shares rally to hit record high, now up over 200% in six months; what's behind this surge?

Shares of Gautam Singhania-led Raymond Ltd continued their strong upward run for the third straight session in Tuesday's trade. The stock soared 11.82 per cent to hit an all-time high of Rs 1,121.80. The stock was last seen trading 7.64 per cent higher at Rs 1,079.85. At this level, it has delivered multibagger returns to investors, rallying 207.47 per cent over the last six months.

Bourses BSE and NSE have placed the securities of Raymond under the short-term ASM (Additional Surveillance Measure) framework. Exchanges place stocks under short-term or long-term ASM frameworks to caution investors about unusual price movements and heightened volatility.

Another group stock, Raymond Realty Ltd, also surged today and was last seen trading 4.42 per cent higher at Rs 609.35, taking its six-month gains to 70.52 per cent.

"Raymond stocks are witnessing strong buying interest following the completion of the group's demerger, which has separated its businesses into distinct listed entities," said Ravi Singh, Chief Research Officer at Master Capital Services.

"Raymond Realty has emerged as a pure-play real estate company, while Raymond is now focused on engineering and precision technology. The restructuring provides greater clarity on the performance and valuation of the individual businesses, which was difficult under the earlier structure," Singh added.

"With the demerger now completed, investors are reassessing the standalone entities. This has led to increased trading activity and buying interest across the Raymond Group stocks. The sharp moves in Raymond and Raymond Realty reflect this post-demerger repricing and the market's response to the potential value unlocking," he further stated.

Kranthi Bathini, Equity Strategist at WealthMills Securities, said Raymond's expansion of its precision engineering business into aerospace manufacturing is a positive for the company's 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 said.

On Raymond Realty, Bathini said, "The Q1 order book is quite strong and the counter looks positive at current valuations. From a long-term perspective, investors can hold the stock and consider buying on dips."