2. India – Economic Condition
The Indian economy expanded at 6.9% in fiscal year 2011-12, its slowest pace in three years.
The government expects a better showing in 2012-13 and has pegged growth at 7.6% for the
new fiscal year.
Manufacturing sector expansion is slow.
India's headline inflation edged up to 6.87% on higher food costs.
The Reserve Bank of India is widely expected to cut the repo rate—the main policy rate—by
25 basis points to 8.25% to spur growth when it reviews policy next Tuesday.
The RBI has already cut banks' reserve requirement by 125 basis points in two moves since
late January, making more money available for lending.
3. Current Economic Scenario
Indicator Impact on the Stock Prices and Business
Environment
Gross National Product Favourable because of High Growth Rate
General Employment Level Unfavourable because of high level of
unemployment
Domestic Savings Rate Favourable because of high DSR
Interest Rates Unfavourable because of High Interest
Rates
Tax Rates Unfavourable because of High rates
Foreign Exchange Position Favourable for export oriented sector
Balance of Payments Unfavourable because it is negative
Inflation Unfavourable because of High Inflation
Agricultural Production Unfavourable because of constant decline
Power Supply Unfavourable because of crisis
4. India – Textile Industry Overview
• One of the earliest sector to come into existence in India;
instrumental part in the freedom movement.
• Accounts for 14% of IIP and 20% of total exports.
• Earns 27% of the foreign exchange and contributes 5% to the GDP.
• Employs 38 million people and is a $55 billion industry.
• Second most important sector after Agriculture.
• 100% FDI allowed.
• Attractive Investment Opportunity
5. India – Textile Industry Overview
• Currently in Expansion Stage
• Driven by continuous increase in domestic demand
• Improved Technology in production
• Fabric Production rose to 60,996 million sq.m in FY’11 from 52,665 million
sq.m in FY’07.
• Potential to increase its textile and apparel share in the world trade from
4.5% to 8% and reach a value of $80 billion by 2020
• In the world textile scenario, it is the largest producer of jute, second largest
producer of silk, third largest producer of cotton and cellulosic fibre/yarn
and fifth largest producer of synthetic fibre/yarn.
6. Industry Analysis
• Past Performance
• Labour conditions
• Attitude of the Government
• Competitive Conditions
• Stock Prices
7. SWOT Analysis
Strengths Weaknesses
• Post 2005, removal of quota • Fragmented Industry
restrictions to give a major boost • Effect of Historical Government
• Export Target of $80 billion by 2020 Policies
• Cost Competitiveness • Technological Obsolescence
Opportunities Threats
• Indian Companies need to focus on • Need to improve the working
Product Development conditions of the people involved in
• Increased use of CAD to develop the profession
designing capabilities • Need to revamp consumer
• Investing in trend forecasting to enable consciousness
growth of industry • Tackle Chinese Aggression over the
• Low per capita consumption International Market
8. Companies’ Fact File
Type of Company Public Limited Type of Company Public Limited
Founded 1925 Founded 1879
Key People Gautam Hari Key People Nusli Wadia
Singhania Jeh and Ness Wadia
Headquarters Mumbai, India Headquarters Mumbai, India
Main Products Fabrics, Garments, Main Products Bed Linen, Towels,
Designer Wear, Furnishings
Denim, Cosmetics &
Toiletries
Market Cap Rs. 2219.53 crore Market Cap Rs 2054.2 crore
Face Value Rs. 10 Face Value Rs.10
Tag Line The Complete Man Tag Line Bring Style Home,
Happy Home to You
9. Non Financial Analysis
• Both Raymond and Bombay Dyeing are under professional
management yet headed by a family.
• Integrity of the Management is top notch and they have been
in business for more than 85 years now.
• Both the companies have hit their 5 year lows in 2009 due to
the impact of the recession of 2008.
• Both the companies have dynamic and young leaders as their
Managing Directors.
• Over the last one year investors have remained bullish on
both these shares for the long term.
10. Corporate Social Responsibility
• Raymond Embryo Research • Housing
Centre for cattle and J. K. Trust • Education
Gram Vikas Yojana • Healthcare
• Education
• Raymond Tailoring Initiative
11. Consumers – Bombay Dyeing
• Caters from medium to high end market segment
• Aiming to scale down prices of its bed and bath
portfolio
• Innovation with new technologies will help cut costs
and maintain quality
• Bed and bath offerings are expected to retail between
Rs. 499 and Rs. 699 while their current range begins at
Rs. 699
12. Consumers – Raymond
• Caters to the premium upper middle and high end segment
of the market
• Launch of ‘Makers’ shows the outlook of Raymond towards
the economy segment and targeting the youth
• The strategy of Raymond is to sell the brand through multi-
brand outlets (MBOs) which is where there are typical tier 2
and tier 3 customer shops.
• So this brand will not affect the positioning of Raymond
brand which is largely sold through its exclusive brand
outlets (EBOs) and larger MBOs.
13. Highlights of the Profit & Loss Account
PAT - 156% PAT - 177.47%
Net Sales - 25% Net Sales - 20%
Operating Profit - Operating Profit -
7.95% 18.39%
Manufacturing and
Exceptional Indirect Expenses -
Expenses - 97.34% 18.67%
Decrease in Stock
PBT and Exceptional
Items - 4.3% - 39.5%
14. Highlights of the Balance Sheet
Investments - > Net Current
50% of the assets Assets - 184%
Total shareholders’
Capital Work in funds and Reserves -
Progress - 50.6% 61.87%
Total shareholders’ Net Current Assets -
funds and Reserves - 50.36% of the assets
3.75%
Net Current Investments –
Assets - 246.27% 12.5%
Total Debts - Unsecured
14.25% Loans – 48.63%
15. Dividend History
Dividend History - Raymond
60%
50%
40%
30%
20%
10%
0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
60%
Dividend History - Bombay Dyeing
40%
20%
0%
