Motilal Oswal Maintains Buy Call on Raymond Lifestyle, Targets Rs 1060

Raymond Lifestyle Posts Weak 4QFY26 Performance

Raymond Lifestyle (RLL) reported a disappointing fourth quarter (4QFY26) performance, with earnings before interest, taxes, depreciation, and amortization (EBITDA) coming in at INR1.2 billion, falling short of estimates. The decline in EBITDA was primarily due to lower gross margins and increased operating costs. Additionally, the profit after tax (PAT) was further impacted by a one-off inventory impact of INR0.7 billion in the apparel business.

Strong Textile Franchise and Attractive Valuation

Despite the near-term drag from losses in newer businesses, RLL's strong textile franchise and attractive valuation of approximately 15 times its estimated earnings per share (EPS) for fiscal year 2028 (FY28E) provide a favorable risk-reward scenario. The company's pre-Indian Accounting Standards (Ind AS) EBITDA for FY26 rose 56% year-over-year (YoY) to INR4.3 billion, with margins expanding 180 basis points to 6.2%. This improvement was driven by operating leverage and better execution.

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Research Report Recommendations

Motilal Oswal's research team has reiterate their BUY rating for RLL, with a target price of INR1,060. This recommendation is based on a valuation multiple of 20 times FY28E EPS.