Case Asssignmnent RAYMond

8/4/2019 Case Asssignmnent RAYMond

1/14

DEFTONES

RAYMONDS LIMITED

Case

SUBMITTED BY

RUCHIKA MOHANTY

ENROLLMENT NO- 10BSP1146


2/14

RAYMOND LIMITED

Website:www.raymondindia.com

Tagline :The complete man since 1925

History

Incorporated in 1925, Raymond Limited has five divisions comprising of Textiles, Denim,

Engineering Files & Tools, Aviation and Designer Wear. Raymond Textile is India's leading

producer of worsted suiting fabric with over 60% marketshare. With a capacity of 25 million

meters of wool & wool-blended fabrics, Raymond Textilesis the worlds third largest integrated

manufacturer. The company exports its suiting to more than50 countries including USA, Canada,

Europe, Japan and the Middle East. Over the years,aymond Textile has developed strong in

house skills for research & development, which hasresulted in path-breaking new products.

Perceived as pioneer and innovator, Raymond Textilehas been responsible for raising the

standard of the Indian textiles industry. Garment companies have been successful in the Indian

market using different approaches and distribution methods. Raymond, with its history of more

than 75 years, relies on its long-standing reputation; loyal customer base and well-established,

extensive retails network in over 400 towns through 30,000 retailers and over 270 exclusive

Raymond Shops. Sometime in the 1960.s one ofRaymonds regular textile importers in Sweden

made the observation that the cost of manufacturing readymade garments was becoming

increasingly prohibitive in his country. Thiswas true for the rest of Europe as well. Raymond was

quick to seize this opportunity. Assessing the viability and future scope of garment exports,

Raymond set up a readymade garment plant at Thane (Mumbai) in1968 whilethe machinery and

equipment arrived from Italy, Sweden, Germany and the U.S., the know-howcame from

Scandinavia. Swedish experts trained a team of technicians at Raymond in every areaof the

garment business contribution in making these utilitarian items

.

RAYMOND IN BRIEF

Chairman and Managing Director Mr.Gautam Singhania

R 1925Headquarter Mumbai, India

Industry Textiles

Products Fabrics, Designer Wear, Cosmetics,

Engineering files & tools, Aviation Servivces.

Industry Textiles

Net Earning Rs.2100
http://www.raymondindia.com/http://www.raymondindia.com/http://www.raymondindia.com/http://www.raymondindia.com/


3/14

Internal Issuues

BUSINESS ISSUES ARISED ACTION TAKEN PRESENT STATUS

ERP

IMPLEMENTATION

Teething issues in SAP

implementationresulting in lost sales

and cost increase

Resolved FY 08 The ERP package isfunctioning very welland has led to better

inventory management

and lower lead time.

DENIM Denim JV ran up lossesto the tune of USD

26mn in FY08 & USD

35 mn in FY09,excluding exceptional

exceptional writedowns.

USA and Belgium

operations which

accounted for nearly

80% of the losses wereshutdown in Dec 2008.

JV operates from low

cost operations in India

and Romania which are

together EBITDApositive in Q1 & Q2

FY10

GAS Losses to the tune of

USD 11 mn in FY09

Discontinued the

JVwith the Raymondgroup taking over. All

GAS outlets closed

GAS is now a wholly

owned subsidiary ofRaymond ltd.with no

loss in H1 FY10

WOOLLENOUTERWEAR

BUSINESS

Erstwhile JV facedproblems consequent to

partners lack of focus.

Took over the companyand all day to day

operations from the

partner

The company has beenconsistently EBITDA

positive ever since

.

Vision Statement:

RAYMOND the most desired Workplace for top talent.

Mission Statement:

"We will strive to weave in the core Raymond values namely Quality, Trust, Leadership, and

Excellence in all our actions & HR Processes so as to make every Raymondite a complete

man.MA

VALUES:

TRUST

QUALITY

LEADERSHIP


4/14

EXCELLENCE

Organization Structure:

kshay Chudasama Independent Director

Aniruddha Deshmukh President - Textiles & FMCG

Boman Irani Independent Director

Gautam Hari Singhania CEO

Gautam Hari Singhania Chairman and Managing director

H Sunder President - Finance & Chief Financial Officer

H Sunder Addl. Director & WTD

Harshal Jayavant President - Engineering Business

I D Agarwal Director

K A Narayan President - HR

Nabankur Gupta Director

P K Bhandari Director

Pradeep Guha Director

Rakesh Pandely President - Retail & Business Development

Robert Lobo President (Operations) - Group Apparel

S L Pokharna PresidentCommercial

Shailesh Haribhakti Director

Shreyas Joshi President - Group Apparel

Thomas Fernades Director - Secretarial & Co. Secretary

Thomas Fernades Secretary

Vijaypat Singhania Chairman Emeritus


5/14

BUSINESS OVERVIEW

B2C constitutes 84% of its revenue.

B2B

CONSTITUTES 16% OF ITS

REVENUE

STATEGIC THRUST AREAS

Leadership Position

- Permanently anchor Raymond leadership position across the consumer volume

spectrum

Brand Focused Approach

- Focus on Power brands to help maintain pricing power and profitability through its

premium positioning

Market Access

- Continous rapid penetration in untrapped smaller towns and cities through its

exclusive retail network.

BRANDS

RAYMOND

Parx Avenue

Parx

colour plux

RETAIL

Wholesalers

MBOs

Exclusive stores.

DOMESTIC MARKET

FABRIC MARKETING

GARMENT

MANUFACTURING

INTERNATIONAL MARKET

EXPORTS


6/14

Finance:

INTERPRETATION

In the year 2004, share price is increasing every month and ends with Rs.317.20/share.

In the year 2005, share price is fluctuating every month like Sine Wave

In the year 2006 & 2007, per share price is fluctuating around Rs.400.

In the year 2008, market downfall hits Raymond very hard. Every month in 2008, the

share price is declining and it comes to its lower price in last 10 years at Rs.81.95 per

share.

But in 2009, Raymond is recovering from market downfall period like other companies

does and at the end of the year its price increases to the Rs.195 per share.

INTERPRETATION OF EXHIBIT3

The total income in march 2008, is 1510.64 cr but in 2009 it increased further to

1178.77 due to global recession, but in 2010 the net sales again increased to

1358.04cr and as the sales turnover increased so the total income further increased

in 2011 to 1406.91cr.

The total expenditure has increased in 2009 by 12.94cr bt in 2010 it decreased as

the other factors like raw materials, employees cost and miscellaneous expenses

decreased.

AWARDS AND RECOGNITION

TEXTILES

The Business world Most Respected Company Award 2011 in the Apparel & Textile

category.


7/14

Raymond has been ranked 20thin The Brand Trust Report, India Study,2011.

Images Fashion Awards 2009Most Admired Textile Brand of the Year

Readers Digest- Platinum Trusted Brand,20084

Lyrca Images Fashion Awards 2008Most Admired Textile Brand of the Year

Lyrca Images Fashion Awards 2008- Most Admired Suiting Brand of the Year. CNBC Consumer Award 2007The Best Branded Readymade Garment and Textile.

BRANDS

PARK AVENUE

Images Fashion Awards 2011Most Admired Mens Formalwear Brand of the Year.

Images Fashion Awards 2009Most Admired Menswear Brand of the Year.

Lyrca Images Fashion Awards 2008Most Innovative Lyrca Brand of the Year.

HR

ACCOR SERVICES(International Leader and Indias Foremost in Employee Benefits,

Motivation and Loyalty Solutions)Presented the GLOBAL HR EXCELLENCE AWARDS

200708 for the Outstanding Contribution to the Cause of Education at the Asia Pacific HRM

Congress.

HUMAN RESOURCE PRACTICES IN RAYMONDS LIMITED:

Craftsmanship, teamwork and professionalism have come together at Raymond to weave tales of the

finest Fabrics for over 80 years. Today, it has gained its market leadership position primarily on the

strength of its vast talent pool.The company has always emphasized on the continuous and consistentup gradation of manpower in order to fully embrace the rapid changes in the textile industry. The popular

HR practices in Raymond are-

1. MANPOWER RESOURCING:

a. Internal Resourcing: The company first scouts for talent within the organization to provide

opportunities to its employees

b. lateral recruitment:Market skilled employees from other companiesare periodically

inducted into the organization from time to time. A combined force of existing talent and

induction of fresh blood o be competitive in the face of increasing business complexities.

2. CONTINOUS LEARNING AND DEVELOPMENT

There is great emphasis on behavioral and attitudinal training apart from technical and on-the-job

training.


8/14

Raymond Management Development Programme

The Raymond Management Development Programme (RMDP) provides participants designatedfrom various divisions at Raymond with basic and advanced management perspectives and an

opportunity for self-learning. The participants will be trained at Welingkar Institute of

Management Development & Research, Mumbai followed by sessions back home over the next

six month

At Raymond, an Performance Management System provides opportunity for employees toexplore their potential for professional growth and personal development.

Good performers are promptly recognized and rewarded. Developmental needs and futurepotential are established through assessment centers and on-line testing . Feedback is shared on

an on-going basis and reward and recognition are linked through measurement of Key Result

areas

360-Degree Feedback System

A 360 Degree Feedback System provides senior managers with valuable inputs throughassessment from their colleagues, subordinates and internal as well as external customers. This

enables the management to prepare their employee's individual development plans by

understanding their potential, interests and goals

Employee Involvement

Raymond believes that employee involvement is the key to continuous improvement, sounddecision-making and developing an open and transparent organization. Open forums provide

opportunities to employeesshare their views regarding people policies. This ensures a foundation

of people centric policies. An online HR Manual brings transparency in HR processes. Latent

creativity among organizational members is tapped through initiatives like Kaizen, Quality

Circles and Suggestion Schemes in units.

The Raymond Interchange, a think-tank of the Co's top management group, is an on-goinginitiative which harnesses the collective views on business strategy and is one of the drivers of

employee involvement. Usage of the internal branding concept throughout the Group also plays

an important role in driving employee involvement. We are proud of the fact that we are one ofthe most empowered organizations in terms of decision making down the line.

COMPENSATION AND BENIFIT

Wherever Raymond has created industry and employment, it has also provided educational,

housing, recreational and spiritual support systems for its people. Employees' children have thefacility to enroll themselves in the schools run by the J.K. Trust, at 50% of the fees. In many

cases, children's education is absolutely free. From subsidized transport facilities or availability

of Raymond products at concessional rates to its employees; the company always strives to makeemployees feel a part of the large Raymond family.


9/14

OPERATION IN RAYMOND

,

Raymond has fully integrated Value chain as clearly stated from the diagram.

Competitors:

Ashnoor Textile Mills Ltd.

Digjam Ltd.

Globus Constructors & Developers Ltd.

Hytone Texstylers Ltd.

LWS Knitwear Ltd.

Modella Wollens Ltd.

FUTURE ASPECTS:

It has started having many retail stores to increase their reach to the consumers.

They have tied up with international brand called GAS & Ansell- Australia based

company with 50:50 ratio joint joint venture. Itll increase the employment & apparel

industry in India.

Raymond have bought 50 acres of land near Thane, Mumbai of worth Rs.750 crores.


10/14

Raymond are planning to invest Rs.1billion to open 300 more stores by the end of march,

2011.

Raymond expects its turnover to exceed Rs.2 million per annum from these stores.

SWOT ANALYSIS

STRENGTH

The company has strong Research andDevelopment dept. for product and new

technology The company has many qualified and

experience Human Resource department who

takes care of the best quality of employees by

selection and recruitment. Raymond has maintained its leadership

position in brand track studies as compared toits competitors.

WEAKNESS

The company has obsolete technology. The company has low production in

off session. The company has less man power

according to the work.

OPPORTUNITIES The company is a market leader in the textile

sector in India, has a powerful brand

Raymond and strong retail presence in theform of THE RAYMOND SHOP

domestically.

The Companys long term strategy forestablishing itself as a preffered supplier of

value- added premium fabric in theinternational markets, has started yieldingresults.

The company is becoming a ONE STOP SHOPfor premium international customers.

The Company is now concentrating a newavenues to increase sales and is geared up to

meet opportunities for growth in new market

segments like corporate-wear, service industry,

hospitality industry etc. which are emerging asbig segments for textile manufacturers.

THREATS China continues to be a dominant

player in the market with betterinfrastructure facilities and removal of

quoata restrictions in 2008 by US,

China is a stronger competitor in

exports as well as in the domesticmarket.

The company is experiencing pressureon margins due to severe competitionfrom low-cost countries and stronger

Indian Rupee.

There is also a threat of high inflationas the prices of commodities has beenincreasing since last 3 quarters.

Textile being a labor intensiveindustry, rising labor and skilled

human resource costs can put pressureon.


11/14

Porters Five Force Model

Threat of new entrants

Decrease in profitability due to increase in number of entrants.

This results in high entry barriers.

Bargaining power of suppliers

Bargaining power of suppliers is low.

Supplierss margins have been stagnant despite strong growth in volumes.

Threat of established rivals

Raymond is having 64% of the Market share in India.

High competition in the sector.

Established rivals are a threat to upcoming players

Threat of substitute product

Threat of Substitute product due to pricing policy

inta

industry

rivalry BU

potential

newentrants

bargaining

power of

buyer

substitute

product

and

services

bargaining

power of

supplier


12/14

EXHIBIT-I

THE RAPID INCREASE IN SHOWROOMS OF RAYMOND

Year No. of showrooms in INDIA and

OVERSEAS2006-07 437

2007-08 547

2008-09 548

2009-10 676

2010-11 739

EXHIBIT -II

Shareholding pattern - Raymond Ltd.

Holder's Name No of Shares % Share Holding

Promoters 2,39,93,618 39.09%

GeneralPublic 1,31,80,340 21.47%

FinancialInstitutions 89,84,990 14.64%

NBanksMutualFunds 83,28,487 13.57%

ForeignInstitutions 38,69,753 6.30%

OtherCompanies 21,77,810 3.55%

Others 1,343 0.00%

EXHIBIT-III

PROFIT AND LOSS STATEMENT

Mar'11 Mar'10 Mar'09 Mar'08 Mar'07

12 Months

12

Months 12 Months 12 Months

12

Months

INCOME:

Sales Turnover 1,502.51 1,360.84 1,414.21 1,352.33 1,315.95

Excise Duty 0.96 4.16 14.00 14.79 15.59


13/14

NET SALES 1,501.54 1,356.68 1,400.21 1,337.54 1,300.36

Other Income 0.00 0.00 0.00 0.00 0.00

TOTAL INCOME 1,562.23 1,406.23 1,474.06 1,402.08 1,340.01

EXPENDITURE:

Manufacturing Expenses 197.76 161.05 172.83 166.08 164.50

Material Consumed 484.69 512.03 507.94 522.06 484.98

Personal Expenses 251.28 254.54 261.00 233.16 225.58

Selling Expenses 151.08 134.59 146.14 134.17 130.28

Administrative Expenses 200.10 165.78 192.95 190.54 148.14

Expenses Capitalised 0.00 0.00 0.00 0.00 -1.79

Provisions Made 0.00 0.00 0.00 0.00 0.00

TOTAL EXPENDITURE 1,284.92 1,227.98 1,280.86 1,246.02 1,151.69

Operating Profit 216.62 128.70 119.35 91.52 148.67

EBITDA 277.31 178.24 193.21 156.07 188.32

Depreciation 103.72 111.31 88.81 81.07 63.06

Other Write-offs 0.00 0.00 0.00 0.00 0.00

EBIT 173.59 66.94 104.39 75.00 125.26

Interest 101.88 98.17 85.20 60.30 48.59

EBT 71.70 -31.24 19.19 14.69 76.67

Taxes -47.78 -6.32 -27.15 15.57 36.98

Profit and Loss for the Year 119.49 -24.91 46.34 -0.8 39.69

Non Recurring Items -243.88 26.68 -324.28 57.66 150.47

Other Non Cash Adjustments 24.20 23.29 6.38 15.64 11.96

Other Adjustments -4.68 1.31 1.15 -6.30 -0.8

REPORTED PAT -104.87 26.37 -270.40 66.12 201.25

KEY ITEMS

Preference Dividend 0.00 0.00 0.00 0.00 0.00


14/14

Equity Dividend 6.14 0.00 0.00 15.35 30.69

Equity Dividend (%) 10.00 0.00 0.00 25.00 50.00

Shares in Issue (Lakhs) 613.81 613.81 613.81 613.81 613.81

EPS - Annualised (Rs) -17.09 4.30 -44.05 10.77 32.79

Documents

Case Asssignmnent RAYMond