Stitching a New Strategy
Gautam Singhania has a spring in his stride these days. The flamboyant boss of Raymond Ltd has just completed a stellar FY23, where his company has clocked a billion dollars in revenues for the first time in its 98-year existence. The 58-year-old Singhania can afford to be satisfied with the performance of his company, given that it was teetering on the edge just a couple of fiscals ago, battered by the pandemic and the consequent lockdowns. Today, not only has Raymond been able to bounce back into the black, FY23 saw profits doubling along with highest-ever revenues. Hit by the pandemic, when revenues from its businesses from branded textiles to engineering & auto components plunged, leading the company to a `297-crore loss in FY21, Singhania went about undertaking a series of cost-cutting measures, including cutting down the number of stores and excess inventory, and putting together an aggressive turnaround plan. This also included hiring top-deck talent from outside, including executives who had previously worked at Coca-Cola and Godrej Consumer Products Ltd.
The biggest bonanza for Raymond came by way of its real estate business Raymond Realty—something the company was hardly known for till recently—which contributed `1,115 crore to the company’s `8,337-crore FY23 turnover and was a key factor in its return to profitability. The company successfully leveraged its land bank in Thane near Mumbai, and will now make real estate the main business of Raymond Ltd, with investments in engineering and denim. And the lifestyle businesses will be demerged from Raymond Ltd and brought under Raymond Consumer Care Ltd, which will be listed as a separate entity. In our cover story, Alokesh Bhattacharyya delves into Raymond’s dramatic turnaround, and how Singhania is leading his top team to ensure growth and profitability, with apparel & lifestyle and real estate leading the growth drive. As Singhania tells him: “Vision is 20:20 in hindsight, but we built a real estate business, we built a full new team of people, we built a profitable business… it’s all happened, not by chance.”
I would also urge you to read Anand Adhikari’s deep dive into the murky world of loan recovery agents (RAs). Over several weeks, Adhikari met multiple RAs, asset reconstruction companies and banks to piece together a world where hole-in-the-wall recovery agencies take advantage of grey areas in regulation and the absence of tight supervision by the banks that give them business. Many non-banking finance companies also do not follow Reserve Bank guidelines for empanelment, and bank boards lack clear policies on it. As a result, borrowers often face intimidation and harassment from agents who lack soft skills. There is also no centralised database of blacklisted agencies, and often those blacklisted by some banks continue working for others. While RBI has taken note, the need of the hour is a stricter set of rules for RAs so that the recovery process can become more organised and orderly in the best interest of the financial system.