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DEFTONES

RAYMONDS LIMITED
Case

SUBMITTED BY RUCHIKA MOHANTY ENROLLMENT NO- 10BSP1146

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 of Raymonds 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 1925 Headquarter Mumbai, India Industry Textiles Products Fabrics, Designer Wear, Cosmetics, Engineering files & tools, Aviation Servivces. Industry Textiles Net Earning Rs.2100

Internal Issuues
BUSINESS ERP IMPLEMENTATION ISSUES ARISED ACTION TAKEN PRESENT STATUS The ERP package is functioning very well and has led to better inventory management and lower lead time. JV operates from low cost operations in India and Romania which are together EBITDA positive in Q1 & Q2 FY10 GAS is now a wholly owned subsidiary of Raymond ltd.with no loss in H1 FY10 The company has been consistently EBITDA positive ever since

Teething issues in SAP Resolved FY 08 implementation resulting in lost sales and cost increase Denim JV ran up losses to the tune of USD 26mn in FY08 & USD 35 mn in FY09, excluding exceptional exceptional write downs. Losses to the tune of USD 11 mn in FY09 USA and Belgium operations which accounted for nearly 80% of the losses were shutdown in Dec 2008.

DENIM

GAS

Discontinued the JVwith the Raymond group taking over. All GAS outlets closed Took over the company and all day to day operations from the partner

WOOLLEN OUTERWEAR BUSINESS .

Erstwhile JV faced problems consequent to partners lack of focus.

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

EXCELLENCE

Organization Structure:
kshay Chudasama Aniruddha Deshmukh Boman Irani Gautam Hari Singhania Gautam Hari Singhania H Sunder H Sunder Harshal Jayavant I D Agarwal K A Narayan Nabankur Gupta P K Bhandari Pradeep Guha Rakesh Pandely Robert Lobo S L Pokharna Shailesh Haribhakti Shreyas Joshi Thomas Fernades Thomas Fernades Vijaypat Singhania Independent Director President - Textiles & FMCG Independent Director CEO Chairman and Managing director President - Finance & Chief Financial Officer Addl. Director & WTD President - Engineering Business Director President - HR Director Director Director President - Retail & Business Development President (Operations) - Group Apparel President Commercial Director President - Group Apparel Director - Secretarial & Co. Secretary Secretary Chairman Emeritus

BUSINESS OVERVIEW B2C constitutes 84% of its revenue.


BRANDS
RAYMOND Parx Avenue Parx colour plux

RETAIL
Wholesalers MBOs Exclusive stores.

DOMESTIC MARKET

INTERNATIONAL MARKET EXPORTS

FABRIC MARKETING GARMENT MANUFACTURING

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.

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 EXHIBIT 3 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.

Raymond has been ranked 20th in The Brand Trust Report, India Study,2011. Images Fashion Awards 2009 Most Admired Textile Brand of the Year Readers Digest- Platinum Trusted Brand,20084 Lyrca Images Fashion Awards 2008 Most Admired Textile Brand of the Year Lyrca Images Fashion Awards 2008- Most Admired Suiting Brand of the Year. CNBC Consumer Award 2007 The Best Branded Readymade Garment and Textile.

BRANDS PARK AVENUE HR ACCOR SERVICES (International Leader and Indias Foremost in Employee Benefits, Motivation and Loyalty Solutions) Presented the GLOBAL HR EXCELLENCE AWARDS 2007 08 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 consistent up gradation of manpower in order to fully embrace the rapid changes in the textile industry. The popular HR practices in Raymond are1. MANPOWER RESOURCING:

Images Fashion Awards 2011 Most Admired Mens Formalwear Brand of the Year. Images Fashion Awards 2009 Most Admired Menswear Brand of the Year. Lyrca Images Fashion Awards 2008 Most Innovative Lyrca Brand of the Year.

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.

Raymond Management Development Programme The Raymond Management Development Programme (RMDP) provides participants designated from 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 to explore their potential for professional growth and personal development. Good performers are promptly recognized and rewarded. Developmental needs and future potential 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 through assessment 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, sound decision-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-going initiative 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 of the 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 the facility 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 make employees feel a part of the large Raymond family.

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.

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 WEAKNESS The company has strong Research and The company has obsolete technology. Development dept. for product and new The company has low production in technology off session. The company has many qualified and The company has less man power experience Human Resource department who according to the work. takes care of the best quality of employees by selection and recruitment. Raymond has maintained its leadership position in brand track studies as compared to its competitors. OPPORTUNITIES THREATS The company is a market leader in the textile China continues to be a dominant sector in India, has a powerful brand player in the market with better Raymond and strong retail presence in the infrastructure facilities and removal of form of THE RAYMOND SHOP quoata restrictions in 2008 by US, domestically. China is a stronger competitor in The Companys long term strategy for exports as well as in the domestic establishing itself as a preffered supplier of market. value- added premium fabric in the The company is experiencing pressure international markets, has started yielding on margins due to severe competition results. from low-cost countries and stronger The company is becoming a ONE STOP SHOP Indian Rupee. for premium international customers. There is also a threat of high inflation The Company is now concentrating a new as the prices of commodities has been avenues to increase sales and is geared up to increasing since last 3 quarters. meet opportunities for growth in new market Textile being a labor intensive segments like corporate-wear, service industry, industry, rising labor and skilled hospitality industry etc. which are emerging as human resource costs can put pressure big segments for textile manufacturers. on.

Porters Five Force Model

potential new entrants

bargaining power of supplier

inta industry rivalry BU

bargaining power of buyer

substitute product and services

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

EXHIBIT-I
THE RAPID INCREASE IN SHOWROOMS OF RAYMOND

Year 2006-07 2007-08 2008-09 2009-10 2010-11 EXHIBIT -II


Shareholding pattern - Raymond Ltd. Holder's Name Promoters GeneralPublic FinancialInstitutions NBanksMutualFunds ForeignInstitutions OtherCompanies Others

No. of showrooms in INDIA and OVERSEAS 437 547 548 676 739

No of Shares 2,39,93,618 1,31,80,340 89,84,990 83,28,487 38,69,753 21,77,810 1,343 EXHIBIT-III

% Share Holding 39.09% 21.47% 14.64% 13.57% 6.30% 3.55% 0.00%

PROFIT AND LOSS STATEMENT Mar'11 12 Months Mar'10 12 Months Mar'09 12 Months Mar'08 12 Months Mar'07 12 Months

INCOME: Sales Turnover Excise Duty 1,502.51 1,360.84 0.96 4.16 1,414.21 14.00 1,352.33 1,315.95 14.79 15.59

NET SALES Other Income TOTAL INCOME

1,501.54 1,356.68 0.00 0.00

1,400.21 0.00 1,474.06

1,337.54 1,300.36 0.00 0.00

1,562.23 1,406.23

1,402.08 1,340.01 EXPENDITURE:

Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made TOTAL EXPENDITURE Operating Profit EBITDA Depreciation Other Write-offs EBIT Interest EBT Taxes Profit and Loss for the Year Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT

197.76 484.69 251.28 151.08 200.10 0.00 0.00

161.05 512.03 254.54 134.59 165.78 0.00 0.00

172.83 507.94 261.00 146.14 192.95 0.00 0.00 1,280.86 119.35 193.21 88.81 0.00 104.39 85.20 19.19 -27.15 46.34 -324.28 6.38 1.15 -270.40

166.08 522.06 233.16 134.17 190.54 0.00 0.00

164.50 484.98 225.58 130.28 148.14 -1.79 0.00

1,284.92 1,227.98 216.62 277.31 103.72 0.00 173.59 101.88 71.70 -47.78 119.49 -243.88 24.20 -4.68 -104.87 128.70 178.24 111.31 0.00 66.94 98.17 -31.24 -6.32 -24.91 26.68 23.29 1.31 26.37

1,246.02 1,151.69 91.52 156.07 81.07 0.00 75.00 60.30 14.69 15.57 -0.8 57.66 15.64 -6.30 66.12 148.67 188.32 63.06 0.00 125.26 48.59 76.67 36.98 39.69 150.47 11.96 -0.8 201.25

KEY ITEMS Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend Equity Dividend (%) Shares in Issue (Lakhs) EPS - Annualised (Rs)

6.14 10.00 613.81 -17.09

0.00 0.00 613.81 4.30

0.00 0.00 613.81 -44.05

15.35 25.00 613.81 10.77

30.69 50.00 613.81 32.79