FINANCIAL ACCOUNTS PROJECT

ON

PREPARED BY: - GROUP 2

HARSHIT VASAN 133015
HARSHITA BHANDARI 133016
MANSI GUPTA 133025
PARUL VARYANI 133032
SARTHAK GARG 133043
TUSHAR KAISTHA 133128
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 INDEX
S.NO PARTICULARS P.NO
1 Background of Raymond 3-6

2 Statement of P&L of Raymond’s 7

3 Balance Sheet of Raymond’s 8

4 Cash Flow Statement of Raymond’s 9-10

5. Understanding of Numbers and Figures 11-13

6. Examination of Major Accounting Policy 14-15

7. Common Sized P&L 16

8. Common Sized of Other Expenses 17

9. Industry Benchmarking 18

10. Trend Analysis 19

11. Other Comprehensive Incomes 20

12. Ratio Analysis 21-22

13. Capital Market Evaluation 23

14. Swot Analysis 24

15. References 25

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 BACKGROUND OF RAYMOND
Raymond is a differentiated gathering with greater part business premiums in Textile and Apparel segments
just as nearness crosswise over assorted fragments, for example, FMCG, Engineering and Prophylactics in
national and worldwide markets. Having delighted in the support of over a billion purchasers, Raymond as a
brand has been reliably conveying world class quality items to its buyers since the previous nine decades.

It was incorporated in 1925 and is a leading Indian textile major. The company is part of global
conglomerate Raymond Group. Raymond's business advantages in Textile and Apparel areas just as
nearness crosswise over differing sections, for example, FMCG, Engineering and Prophylactics in national
and universal markets. Raymond was the first in 1959 to introduce a polywool blend in India to creating the
world's finest suiting fabric the Super 240s made from the superfine 11.6 micron wool. It produces wool–
blended and premium polyester viscose worsted suiting. Besides, textile company has also diversified in
engineering and aviation. Having enjoyed the patronage of over a billion consumers, Raymond as a brand
has been consistently delivering world class quality products to its consumers since the past nine decades.

Being a vertically and evenly incorporated producer of Textiles, Raymond produces 'The best texture on the
planet'. With more than 1100 elite stores spread crosswise over 380+ urban areas and a far reaching system
of more than 20,000 of-offer in India, Raymond and its brands are likewise accessible in level IV and V
urban areas. Throughout the years, Raymond has risen as a favored decision for top structure houses
crosswise over 55 nations. Raymond has additionally been a main player in Shirting textures and is the No.1
brand in the OTC space. A considerable player in the Denim space, Raymond is likewise the top maker and
favored provider of great Ring Denim to world's driving Jeanswear brands. Given the fiber to texture
producing abilities, Raymond is a material powerhouse with best in class fabricating framework, best
industry rehearses that has increased present expectations of Indian material assembling.

Raymond Ltd. is one of India's, and the world's, driving makers of worsted textures, guaranteeing nearly 60
percent of the Indian worsted fitting business sector. The organization's Textiles division, which records for
50 percent of gathering turnover, delivers in excess of 25 million meters of fleece and fleece mixed textures
every year, setting the organization at number three around the world. Raymond is a noteworthy provider to
the worldwide material industry, giving textures and finished pieces of clothing to in excess of 50 nations,
including the North American, European, Middle East, and Japanese markets. The organization is likewise a
noteworthy texture trend-setter, and is one of only a few makers on the planet fit for delivering the Super
210s and Super 220s evaluations of unadulterated fleece, produced using 13.2 micron and 12.69 micron
fleece, individually. In the mid-2000s, Raymond additionally has been putting vigorously in the creation of
denim; in 2005, the organization raised its introduced ability to in excess of 30 million meters of ring denim,
and helped limit by another ten million meters in mid 2006. Denim deals represented 15 percent of gathering
deals in 2005.

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Raymond has for some time been a coordinated materials gathering, including creation of its own marked
garments - under the Raymond, Parx, and Manzoni names- - just as retail conveyance through an India-wide
system of in excess of 320 stores, including almost 20 Be fashioner garments stores. The organization
likewise gained ColorPlus in 2004, giving it control of one of India's driving casualwear brands.

Article of clothing deals contributed more than 20 percent of the organization's deals in 2005. Other
Raymond tasks incorporate a 50 percent stake in the J.K. Ansell joint endeavor, which produces condoms
under the Kama Sutra brand. Raymond likewise controls J.K. Documents and Tools, the world's driving
maker of records and grates. Raymond itself is the lead of the Singhania Group, a synthetics maker. The
organization is driven by CEO Gautam Hari Singhania, extraordinary grandson of the organization's
organizer. Raymond is recorded on a few stock trades in India, including the Mumbai (Bombay) Stock
Exchange.

Businesses
o Material Under this it produces worsted textures, fleece and fleece mixed textures. It has generation limit
of 33 million meters for every annum and has an item scope of almost 20000 plan and hues. The
organization fares to more than 55 nations that incorporate USA, Canada, Europe, Japan and the Middle
East. It retails the items through 30,000 stores in more than 400 towns crosswise over India.

o Engineering-It has three designing divisions in particular JK Files and Tools, JK Talabot and Ring Plus
Aqua. It makes steel documents, instruments, Starter Ring Gears, Flexplate Flywheel Assembly, Profile
Sheet Formed Metal Pulleys and Integral Shaft Water Pump Bearings. The fare execution has been
perceived ceaselessly year on year by the Engineering Export Promotion Council of India and the
Engineering Files Panel of India.

o Aviation-The Company was one of the principal corporate houses to dispatch Air Charter Services in India
in 1996. It possesses 1 Ecureuil AS 355N Twin Engine Helicopter, 2 Bell 206 L3 Long Ranger Helicopters
and 1 Challenger CL-604 Business Jet Aircraft.

Principal Subsidiaries

Festivities Apparel Limited; ColorPlus Fashions Limited (75%); Everblue Apparel Limited; Hindustan Files
Limited; J.K. (Britain) Limited; J.K. Ansell Limited (half); J.K. Helene Curtis Limited; Jaykayorg AG

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(Switzerland); P.T. Jaykay Files (Indonesia; 39.20%); Pashmina Holdings Limited; Plugin Sales Limited
(60%); Raymond Apparel Limited; Regency Texteis Portuguesa, Limitada Portugal; Silver Spark Apparel
Limited; Textiles Regency, Sociedad Limitada (Spain).

Principal Competitors
National Textile Corporation Ltd.; Rai Saheb Rekhchand Mohta Spg and Wvg Ltd.; Elgin Mills Ltd.;
Ayyappan Textiles Ltd.; Super Polyfabriks Ltd.; APR
Ltd.; Grasim Industries Ltd.; Howrah Mills Company Ltd.; Swan Mills Ltd.; Sree Valliappa Textiles Ltd.;
Century Textiles and Industries Ltd.; Bombay Silk Mills Ltd.; Arvind Mills Ltd.; Maniyar Plast Ltd.; Birla
Corporation Ltd.
Chronology
• 1925: Raymond Woollen Mill, a producer of woolen blankets, is incorporated to take over a wool
mill in Thane, Maharashtra, India.
• 1944: J.K. Singhania Company and the Singhania family acquire Raymond and it begins expanding
production into higher-grade wools and textiles.
• 1958: Raymond opens its first retail store, King's Corner (later Raymond Shops) in Bombay; a new
wool blend, Terool, is introduced.
• 1968: The company introduces a new lightweight wool, Trovine.
• 1969: A clothing subsidiary, Raymond Apparel, is established.
• 1980: Vijayapat Singhania becomes head of the company and begins industrial diversification.
• 1985: The company launches the Park Avenue clothing brand.
• 1990: The first foreign Raymond shop opens in Oman.
• 1991: The company launches production of condoms through a subsidiary.
• 1995: Steel production begins.
• 1996: Condom production is merged into a joint venture with Ansell International.
• 1999: The company launches the Parx casualwear brand.
• 2000: Gautam Hari Singhania becomes head of the company and leads a restructuring to focus on
textile and clothing sales.
• 2002: Raymond sells its steel operations as part of the divestment of much of the company's noncore
businesses; the Be ready-to-wear designer retail format is launched.
• 2003: The ColorPlus casual brand is acquired.
• 2005: The company opens its first Manzoni and Park Avenue retail stores; production of denim is
expanded to 30 million tons.
• 2006: Denim production is expected to top 40 million tons.
Plant Locations:

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Raymond’s textile plant are located in Thane, Vapi and Chhindwara. These plants have received various
certifications such as ISO 9001 for quality management systems and ISO 14001 Environment Control
Systems.

MANAGEMENT

Name Since Current Position

Gautam Singhania 2000 Executive Chairman of the Board, Managing Director

Sanjay Bahl 2015 Chief Financial Officer

Aniruddha Deshmukh 2013 President - Textiles

Harshal Jayavant President - Engineering Business

Robert Lobo 2013 President - Group Apparel

K. Narayan President - HR

S. Pokharna 2011 President - Commercial

Thomas Fernandes 2008 Compliance Officer, Director - Secretarial, Company Secretary

Nawaz Singhania 2014 Additional Non-Executive Director

H. Sunder 2017 Non-Executive Director

Akshay Chudasama 2016 Independent Director

I. Agarwal 2006 Independent Non-Executive Director

Auditors:
(1) Dalal & Shah LLP, Firm Registration Number: 102021W/W100110,
(2) Walker Chandiok & Co LLP Chartered Accountants Firm’s Registration No.: 001076N/N500013

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STATEMENT OF PROFIT AND LOSS
ACCOUNT OF RAYMOND’S

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BALANCE SHEET OF RAYMOND

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CASH FLOW STATEMENT OF
RAYMOND

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10
 UNDERSTANDING OF THE NUMBERS
AND FIGURES OF RAYMOND’S

1.ANALYSIS OF PROFIT AND LOSS

a) Total Revenue collected from Operations has increased by 6.2 % as compared to the
last year. As seen in the statement most of this rise is because of the operations, hence
the company is doing good business.
b) Profit before Tax (PBT) has significantly increased by approx. 200% over the last year.
This is because the revenue change is higher than the change in expenses. The company
is a profit making one now.
c) Profit after tax (PAT) has risen significantly from 3382.81 to 9807.18 indicating sound
business practices, stability and future growth prospects. The company is doing well.
d) Earnings per share has also risen 190.01% from 5.51 to 15.98 which indicates that
overall profitability per share has increased. Therefore, investing in Raymond’s is an
attractive option for shareholders.

2.ANALYSIS OF BALANCE SHEET

a) As far as non-current assets are concerned, PPE rose by approximately 86% to Rs.105708
from 56887 which signifies that Raymond’s acquired more property, plant and equipment
indicating It is expanding. Also, there was a massive fall of 96% in capital work in progress.
b) There was an increase of 5002 lacs in intangible assets which reflects that Raymond’s
acquired some kind of patent or trademarks. In the company’s name.
c) Investments in subsidiary and other investments nearly stood at the same level.
d) There was a 47% fall in other financial assets while loans advanced increased by 10% to
183.84 crores.
e) Deferred / current tax assets fell by approximately 50% which signifies fall in tax relief for
Raymond’s in the upcoming year.
f) Inventories rose by 34% (238 crores) to Rs 936.87 from 698.27 crores which reflects a
significant increase in the scale of production for Raymond
g) Trade receivables fell by 13% which reflects inefficient management of debtors.
h) Cash and cash equivalents increased by an enormous 230% which reflects somewhat poor

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 financial management since it is not put to great use.
i) Other equity stands at a whopping 20 times compared to equity share capital.
j) Borrowings decreased by 12% to 410.67 crores which reflects better financial position and
the company’s ability to reduce its liabilities as compared to the previous year
k) There was an increase in other financial liabilities and it stood at 4263.
l) The increase of 35% in trade payables and 45% in other financial liabilities can be attributed
to an increase in inventory.
m) Non-current assets have gone up compared to previous year implying greater availability of
assets to generate revenue.
n) Current liabilities have increased from 1890 crores to 2205 crores which imply weaker
liquidity position.

3.ANALYSIS OF CASH FLOW

STATEMENT
(I) Cash Flow from operating activities
a) Increase in Operating profit before working capital from last. The increase is of is attributed
mainly due finance costs.The operating profit for the year is Rs.24542.79
b) Increase in dividend paid of Rs.272.12 lakhs compared to last year which shows utilisation of
increased profit as compared to last year.
c) Cash Flow generated from operations is only Rs. 25344.11 lakhs because inflow from trade
payables has been balanced out by increase in Inventories. This not a good sign.
(II) Cash flow from Investing activities
a) Increase in Cash Used in Investing Activities which is mainly due to purchase of current
investments.
b) Out of the operating cash inflow of Rs 25344.21 lakhs, sums aggregating Rs11797.84 lakhs
have been utilized in investing activities
c) This will strengthen the future operating cash inflows of the company.
(III) Cash Flows from Financing activities
a) Main contribution of long term borrowing and Interest towards cash flow from Financing
Activities.
b) This will improve the credit rating of the company hence making it viable for more cash inflows
in future.
(IV) Quality of cash generated
a) Overall increase in Cash and Cash Equivalence of Rs.1954.68, which shows better position than
last year.
b) Raymond's cash and other short term assets cover its long term commitments.

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 c) Investing as well as financing outflows have been met out of net operational cash inflows. This
in fact shows a sound cash position of the company.
(V) Future Outlook
a) As there is increase in cash and cash equivalence from last year and also increase in dividend
paid to the shareholders it shows better performance of the company and it will enable the company
to reward its shareholders more generously in future.

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 EXAMINATION OF MAJOR
ACCOUNTING POLICIES
3.1 Basis of preparation of financial statements

a) Compliance with Ind AS

These financial statements have been prepared in accordance with the Indian Accounting
Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate
Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with of the
Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant
provisions of the Act.

The accounting policies are applied consistently to all the periods presented in the financial
statements.

b) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the
following:

1) Certain financial assets and liabilities that are measured at fair value;
2) assets held for sale - measured at lower of carrying amount or fair value less cost
to sell;
3) defined benefit plans - plan assets measured at fair value;
c) Current non-current classification
All assets and liabilities have been classified as current or non-current as per the Company’s
normal operating cycle (twelve months) and other criteria set out in the Schedule III to the
Act.

d) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the
nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

3.2 Valuation of PPE as well as intangibles

a) Property, plant and equipment

The Company had applied for the one time transition exemption of considering the carrying cost on
the transition date i.e. April 1, 2015 as the deemed cost under IND AS. Hence regarded thereafter
as historical cost. Freehold land is carried at cost. All other items of property, plant and equipment
are stated at cost less depreciation and impairment, if any. Historical cost includes expenditure that

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 is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably.

b) Intangibles
Intangible assets acquired separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Cost of a non-monetary asset acquired in exchange of another
non-monetary asset is measured at fair value. This is with accordance with IAS.
The Company amortizes computer software using the straight-line method over the period of 3
years Transferable development rights (TDR), received as consideration against compulsory
acquisition of land, are only tested for impairment till the time the TDR is consumed in the
property constructed / developed, post which the carrying value of TDR will form part of the cost
of such property.
3.3 Depreciation

Depreciation on Factory Buildings, Specific non factory buildings, Plant and Equipment, Aircrafts,
is provided as per the Straight Line Method and in case of other assets as per the Written Down
Value Method, over the estimated useful lives of assets. Leasehold land is amortised over the
period of lease. Leasehold improvements are amortised over the period of lease or estimated useful
life, whichever is lower.

3.4 Inventory valuation

Inventories of Raw Materials, Work-in-Progress, Stores and spares, Finished Goods, Stock-in-trade
and Property under development are stated 'at cost or net realisable value, whichever is lower'.
Goods-in-Transit are stated 'at cost'. Cost comprise all cost of purchase, cost of conversion and
other costs incurred in bringing the inventories to their present location and condition. Cost
formulae used are 'First-in-First-out', 'Weighted Average cost' or 'Specific identification', as
applicable. Due allowance is estimated and made for defective and obsolete items, wherever
necessary.

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 ANALYSIS OF PRPOFITABILITY

Common size and multi-step profitability statement

RAYMOND'S
Common-Sized Multi-Step Statement of Profit and Loss
(Rs. In Lakhs ) Common-size %
For the year ended For the year ended
31/03/2018 31/03/2017
Current Previous Current Previous
Particulars
Year Year Year Year
INCOME
Revenue from operations 301155.6 282218.1 100 100
Other Income 12522.67 12876.47 4.16 4.57
EXPENSES
Material cost of goods sold 64505.37 57048.71 21.42 20.22
Purchases of stock-in-trade 82460.03 69496.73 27.39 24.63
Changes in inventories of finished goods, stock- -23639 -2867.4 -7.85 -1.02
in-trade, WIP and property under development
Depreciation and amortization expense 9571.04 9036.76 3.18 3.2
Finance costs 14744.93 14436.33 4.89 5.12
Employee benefit expense 42300.58 37460.41 14.04 13.27
Other expenses 114590.9 105180.9 38.05 37.26
TOTAL EXPENSES 304533.9 289792.4 101.12 102.68
Profit before exceptional items and tax 9144.37 5302.52 3.03 1.87
Exceptional Item -5001.97 593.07 -1.66 0.21
Profit before tax - PBT 14147.13 4709.45 4.69 1.66
Total tax expense 4339.95 1326.64 1.44 0.47
Profit for the year after tax - PAT/NP 9807.18 3382.81 3.25 1.19
Analysis:
1. Revenue from operation activities has increased by 6.71%, though total expenses has also increased.
2. Raymond should focus on reducing the material cost of goods sold to increase its gross profit.
3. The revenue increase is more than the expense increase therefore higher overall profit is achieved.

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Common sized statement of ‘other expenses’
RAYMOND'S
Common-Sized Statement of 'Other Expenses'
(Rs. In Lakhs ) Common-size %
For the year ended For the year ended
31/03/2018 31/03/2018
Note no Current Previous Current Previous
Revenue from operations Year
301156 Year
282218.1 Year
100 Year
100
A. Manufacturing expenses:
Consumption of stores and spare parts 13938.12 14676.05 4.628207 5.200252
Power and fuel 11163.54 11537.78 3.706897 4.08825
Repairs to buildings 689.1 1136.72 0.228818 0.402781
Other Manufacturing and Operating 3125.02 2948.63 1.037675 1.044805
Repairs to machinery
expenses 1846.57 1633.81 0.613161 0.578918
Total 'A' 30762.35 31932.99 10.21476 11.31501
B. Administrative, marketing and other
Rent 6714.95 7894.89 2.229725 2.797443
expenses:
Insurance 410.46 425.93 0.136295 0.150922
Repairs and Maintenance 2622.34 3254.45 0.870758 1.153169
Rates and Taxes 538.42 203.42 0.178784 0.072079
Advertisement Expenses 12376.52 13552.25 4.109671 4.802049
Commission to selling agents 6275.02 6701.08 2.083645 2.374433
Legal and Professional Expenses 4564.79 5038.65 1.515756 1.785375
Travelling and Conveyance 4565.4 3352.43 1.515959 1.187886
Sales Promotion expenses 2635.65 4647.65 0.875178 1.646829
Total 'B' 40703.55 45070.75 13.51577 15.97019
Grand total 71465.9 77003.74 23.73053 25.56939

Analysis:

1. Other manufacturing and operating expense has increased along with repair to machinery which indicates
that they are producing more products and therefore increase in revenue can be observed. Overall Raymond
has tried to t reduce its expenses on manufacturing as well as advertising, marketing and other expenses.

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 INDUSTRY BENCHMARKING OF
RAYMOND’S
RAYMOND
Industry Benchmarking
For the year ended
31-03-18

Ratios Company Industry

ROE 7.42 0.42

EPS 15.98 6.85
Debt-Equity 0.37 0.21
Quick Ratio 0.74 0.68
Current Ratio 1.44 1.43
Return on Capital Employed 9.03 4.33
Fixed Asset Turnover 1.64 1.22

a) ROE is excellent is quiet high as compared to industry. It indicates that investors are getting
higher returns as compared to peers in the industry.
b) High EPS shows that Raymond is able to generate for wealth for its shareholders vis-à-vis ,
the industry benchmarks
c) There is scope for improvement in Debt Equity ratio, Current Ratio and Quick Ratio as both
are very close industry ratio.
d) Return on Capital employed is very high as compared to industry standards and Raymond
has significantly improved its use of capital. This indicates that company has invested in
good and profitable projects.
e) Raymond used its assets less efficiently than the industry average last year based on Return
on Assets.
f) The performance on the basis of ratios shows that, Raymond has performed better than the
Industry benchmarks.

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 TREND ANALYSIS
Raymond Ltd.
Trend Analysis
Previous years
2014- 2015- 2016- 2017- Current
2015 2016 2017 2018 Year
A. FINANCIAL POSITION AT THE YEAR END:
1 All fixed assets 13,811 14,073 15,714 19,500 20,349
Index (times) 1 1.02 1.14 1.30 1.47
2. Investments (Non-current + current) 6261 6540 6596 6632 6556
Index 1 1.05 1.05 1.06 1.05
3. Equity share capital 15,942 16,723 16,731 18,120 19,538
Index 1 1.05 10.5 1.14 1.22
4. Other equity 308 362 401 504 407
Index 1 1.17 1.3 1.64 1.32
B. FINANCIAL RESULTS FOR THE YEAR
5. Revenue from operations 53,745 51,768 53,913 59,064 65,823
Index 1 0.96 1.003 1.1 1.25
6. Total expenses 50,661 48,256 52,518 56,232 61,908
Index 1 0.95 1.04 1.1 1.22
7. PBT 1597 1320 518 2082 2604
Index 1 0.83 0.33 1.30 1.63
8. Tax 439 465 218 666 856
Index 1 1.05 0.5 1.51 1.94
9. PAT 1159 855 300 1415 1748
Index 1 0.74 0.26 1.22 1.50
10. Equity dividend (%) 300 300 125 300 300
Index 1 1 0.42 1 1

(1) Over these 5 years the fixed assets growth is 1.47 times which is acceptable but could’ve been better. But
since expenses grew at 1.22 times , overall PBT grew by 63% compared to the base year.
(2) An enormous increase in taxes restricted the growth in PAT to a meagre
1.50 times compared to March 2014.
(3) Current year is the best performer out of the 5 years. Overall performance has been relatively stagnant.
(4) Volatile and unpredictable results reflect unpredictable future growth.

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 OTHER COMPREHENSIVE INCOMES
Other comprehensive income is those revenues, expenses, gains, and losses under both Generally Accepted
Accounting Principles and International Financial Reporting Standards that are excluded from net income on
the income statement. This means that they are instead listed after net income on the income statement.

Other Comprehensive Income

Items that will not be reclassified to profit or loss
Measurements of defined employee benefit plans 41 (639 87) 1101 06
Income tax relating to above items 221 45 (381 06)
Total Other Comprehensive Income (net of tax) 141 720.00
Total Comprehensive Income for the year 10225 60 2662.81

Items that will not be reclassified to statement of profit and loss: it means that on derecognititon of the
corresponding asset/liability from the balance sheet, balance of accumulated unrealized gain/loss lying in oci
will be transferred to accumulated retained earnings directly in the statement of other equity and not through
statement of profit and loss.

Total Comprehensive income:

OCI earned by Raymond, net of tax effects, works out to Rs. 141 cr. It has been transferred to accumulated
OCI Reserve in the statement of changes in other equity. Adding this figure to Profit for the year , gives TCI
od Rs. 10225.60. This is 3.84 times more than last year’s TCI.

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RATIO ANALYSIS OF RAYMOND’S

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1. Profitability Ratios: Increase in all the ratios with respect to the previous year indicates that the company
is running profitably and generating returns for its shareholders.

2. Liquidity and Solvency Ratio: In this we saw, increase in the current ratio, but it is less than 1, which
indicates that the company is not in good financial health, it does not necessarily mean that it will go
bankrupt.

3. Quick ratio being less than 1 could mean that the company is relying heavily on inventory or other
assets to pay its short-term liabilities.

4. Debt equity ratio has decreased, which means that a company has not been aggressive in financing its
growth with debt. Aggressive leveraging practices are often associated with high levels of risk.

5. Debt Coverage Ratio: Interest cover ratio, the lower it is the more the company is burdened by debt
expense. When a company's interest coverage ratio is only 1.5 or lower, its ability to meet interest
expenses may be questionable. In this case as it has increased to 1.62, we can say Raymond’s is not
burdened by debt and it can meet its interest expenses.

6. Management Efficiency Ratio: Inventory turnover ratio, has decreased which indicates that the company
is not able to efficiently control its inventory.

7. Debtor turnover ratio: Increased value may suggest that a company operates on a cash basis. It may also
indicate that the company’s collection of accounts receivable is efficient, and that the company has a
high proportion of quality customers that pay off their debts quickly.

8. Investment turnover Ratio: A higher ratio means a company is using its invested money more efficiently,
which increases value for stockholders.

9. Asset turnover Ratio: The higher the ratio, the better the company is performing, since higher ratios
imply that the company is generating more revenue per dollar of assets.

10. Cash Flow Indicator Ratio: The dividend payout ratio is the amount of dividends paid to stockholders
relative to the amount of total net income of a company. As it has decreased in this case, we can say that
the company has reduced its dividends payments.

11. Earning Retention Ratio: It has increased hence implying that the company is experiencing rapid
increases in revenues and profits.

12. Earnings per share: A higher EPS is the sign of higher earnings, strong financial position and, therefore,
a reliable company to invest money in.

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 CAPITAL MARKET VALUATION
ANALYSIS OF RAYMOND’S

Parameter March 2018 March 2017 RESULT

EPS 15.98 5.51 INCREASED

Dividend Per Share 3 1.25 INCREASED

Market Capitalization 551538 551046 INCREASED
Closing Share Price 898.55 897.75 INCREASED

1. EPS has increased in the year ended March 2018, shows that earnings per share of investors has increased
significantly.
2. Dividend per share and market capitalization has also increased indicating that it is lucrative for investors to
invest in the company as the returns are high.
3. Market price of shares has also increased, indicating future growth.

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 SWOT ANALYSIS OF RAYMOND’S

Strengths:

1. Strong R&D for product innovations like dress shirts, shirting's, jeans wear, tailored clothing.
2. Loyalty of customers and high product quality
3. Loyalty of employees due to decentralization
4. Being MNC company, it has ability to attract large customers as compared to local companies
5. Owns 550 stores across 200 cities in India and overseas.

Weaknesses:

1. Global penetration is limited as compared to other international brands

2. Switching cost is low for customers since Indian and international firms offers large to customers
3. Weak supply chain management
4. Inconsistent execution

Opportunities:

1. Increasing Disposable Income in India: Disposable income in India has been increasing over the
years and is expected to increase further at a rapid pace. This will certainly increase demand in the
apparel industry.
2. Special offers for corporate and business institutions.
3. Global expansion would give more opportunity for brand to grow.

Threats:

1. Increase in competition in domestic market due to large number of formal wear brands coming up.
2. Regional trade alliances – All major players in the industry are competing with each other not only
on low price but better quality.
3. Increase in social and ecological awareness, company will be in constant pressure to follow labor
laws and environmental laws.

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 REFERENCES

1. https://economictimes.indiatimes.com/raymond-ltd/stocks/companyid-13214.
cms
2. http://www.raymond.in/home
3. https://www.moneycontrol.com/india/stockpricequote/textiles-woollen-
worsted/raymond/R
4. https://www.ndtv.com/business/stock/raymond-ltd raymond

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