Textile major Raymond is looking to expand its presence in rural markets as well they will set up bespoke lounges, said Gautam Singhania, chairman and managing director of the company told CNBC TV18.

Read the full transcript here.

On consumption in India, Singhania said that it has not gone anywhere. He also said goods and services tax (GST) is a positive in the long run.

Key takeaways from the interview

On outlook for Raymond and India

Singhania said Raymond has lived up to its ‘Complete Man’ image for the past 10 decades and its core focus continues to be been on product and growing brand image. The company is looking at further expanding into rural markets as well and will set up made bespoke lounges which are unique.

On Indian market

Big opportunity exists in the Indian market, Singhania said, adding that India consumption story hasn’t gone anywhere. He also said that GST is positive in the long run.

On higher raw material cost

According to Singhania branded products can absorb higher prices. Higher raw material costs make a company like Raymond focus more on operating efficiencies, he said.

On Raymond stock price

Raymond stock price has corrected by nearly 30 percent from the peak seen in May 2018. Singhania said that as a promoter who is positive on business he is a buyer of his own stock at these levels. But the more important focus is on business and not on the stock price, he said.

Singhania assured that he will do whatever it takes to enhance shareholder value be it thane land or sell non–core performing assets

Raymond has a debt of Rs 2,000 crore but also has non-core assets including land which are more than double the debt in its books.

When asked about the big innings that take Raymond to the next league? Singhania replied, "Game is just started need to wait and watch."

On Thane Land

Board has approved development of a 20 acre project in Thane but most land deals have lots of issues in India, he said.

Value creation is paramount on his mind and as the largest shareholder in Raymond I am committed to shareholder value, added Singhania.

On divestment of auto business and hardware

Singhania is willing to sell all non-core assets but said it needs to see the correct amount of money. "If someone had offered me the correct price it would have been sold by now," he said.

On demerging the businesses

Selling is one of the options and there are other options on the table as well, Singhania said, adding that he is fully focussed on shareholder value.

On Debt

Raymond has a debt of Rs 2,000 crore which means they have an interest outgo of roughly Rs 50 crore per quarter but Singhania believes that it is not a big worry. He said that the company is at the end of the capex cycle and have no capex on the table. "The debt went higher owing to Amravati and Ethiopia expansions," he added.

If the company manage to sell Thane land it will be debt free tommrow, Singhania said. "There is intent to monitise the land even if it takes three years or more," he said.

In terms of cash flow and targets for FY20, Singhania assures that that it will turn positive in FY20 and also margin expansion is on the cards.

Plenty of opprontunites and new verticals for Raymond to grow in. He cites that there is big headroom in ethnic wear and believes in the Rs 5,000 crore market there is no rason why the company cannot capture 10 percent of it which amounts to Rs 500 crore.

First Published:Aug 23, 2018 9:03 AM IST