Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Raymond Ltd (BOM:500330, Financial) reported a robust quarter with strong performance in real estate and engineering, achieving a revenue growth of 150% year-on-year.
- The real estate segment showed strong booking momentum, with a total booking of 562 crore, driven by demand for retail shops in Thane and projects in Bengaluru.
- The company remains net debt-free with a net cash surplus of 685 crore, indicating strong financial health.
- Raymond Ltd's engineering segment has shown strong performance post-acquisition of MPP, doubling its revenue compared to the previous year.
- The company is optimistic about continued growth in the real estate market, with a pipeline of projects and a strategy to expand through joint development agreements (JDAs).
Negative Points
- The engineering consumables category continues to be impacted by sluggish demand in both domestic and export markets due to geopolitical issues.
- The aerospace business growth is affected by ongoing production issues faced by a major aircraft manufacturer, leading to delays in shipments.
- Interest costs have risen by 20% year-on-year, attributed to acquisition debt and working capital debt.
- The auto component sector is experiencing recent softness, which may impact growth in the near term.
- There is a potential risk of slower growth in the engineering segment due to ongoing challenges in the aerospace and auto component sectors.
Q & A Highlights
Q: Can you provide an outlook for the engineering segment, particularly in aerospace and auto components, for the next 2 to 3 quarters?
A: The aerospace segment is expected to recover as worker challenges are being resolved, and we have an understanding with customers for shipments. The auto ancillary sector showed decent numbers in the first half, but there is some weakness currently. However, this is expected to be short-lived, with recovery anticipated in the next one or two quarters.
Q: What is the current order book status for the engineering segment, especially in aerospace and auto components?
A: The order book is managed based on lead times, which vary from 30 days to 3-4 months. We work closely with customers to ensure capacity utilization. Currently, 15% of the engineering segment revenue comes from aerospace and 65% from auto components.
Q: How is the real estate market demand in Mumbai, and what are your upcoming project launches?
A: Demand in Mumbai remains strong with stable prices. We have a launch planned in Thane in Q3 and another outside Thane in Q4. The market is healthy with large volumes and prices increasing by 6-8% year-on-year.
Q: Can you clarify the impact of the demerger on JK House and the competition in the Thane real estate market?
A: JK House will remain a property of Raymond Limited post-demerger. Despite new launches by competitors, our demand remains strong, and we have not seen any impact on our sales.
Q: What is the strategy for land acquisition and the status of the current land bank?
A: We are focusing on a Joint Development Agreement (JDA) model for future expansion and are not actively seeking new land acquisitions. The land bank is categorized as fixed assets until a project is launched, at which point it moves to inventory.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
