Shares of Raymond have been in the limelight for the past few days, not because of some fundamental development related to the company or the business as such, but because of the feud in the founder’s family.
On November 13, Chairman and Managing Director Gautam Singhania announced on X (formerly Twitter) that he was “parting ways” with wife Nawaz Modi following which there have been reports of Modi asking for 75 per cent of the industrialist’s wealth as part of the divorce settlement.
The impact of the feud has been clearly visible on the stock of the company that has a rich history of 64 years of being listed on the stock exchanges. Raymond listed on BSE on December 1, 1959.
Since November 13, shares of Raymond have lost more than 12 per cent even as the benchmark S&P BSE Sensex has been up a little over one per cent.
Not surprisingly, the stock has fallen in each of the trading sessions since November 13 till Thursday. On Friday, the shares were trading marginally up during the morning session.
In the current month till November 23, the stock has lost 5.15 per cent while the benchmark 30-share Sensex is up 3.35 per cent in the same period. In the current calendar year, however, shares of Raymond are up 13.51 per cent, outperforming the Sensex, which is up 8.51 per cent.
Interestingly, when asked about the possible impact of the family feud on the company and its prospects on the stock exchanges, Vijaypat Singhania, father of Gautam Singhania, said shareholders are mature and logical and they can react quickly based on their interpretation.
“Raymond has a very large number of adult, mature, logical shareholders. They can think for themselves. If they see something bad, they react quickly. So, I am sure in this case also, it will depend on how they see this situation, not as how I see this situation,” he said in an exclusive interaction with Business Today.
“So, Raymond’s name will ultimately be dependent on how a larger number of shareholders, bankers, buyers, sellers… see this situation. There are two things in it. One is how they see the issue itself, and two, how it will affect Raymond’s performance and they are not necessarily the same,” he added.
Market participants, meanwhile, have been largely bullish on the company even though most of the reports were released before the family feud came out in the open.
In October, Motilal Oswal Financial Services initiated coverage on the company with a buy rating with a target price of Rs 2,600—an upside of over 55 per cent from the current levels.
More recently on November 9, Systematix, in a research report, stated that the company has showed resilient performance especially in its key focus areas of branded apparel and garmenting.
“With continued focus on premiumisation in suiting, focus on mass market in shirting, retail excellence and store expansion in branded apparel and strong order book in garmenting, we see significant potential for a re-rating especially for the lifestyle business. Real estate and engineering are also becoming strong growth vectors with launch of new projects outside Thane and acquisition of Maini Precision respectively. We view the recent FMCG business sale, demerger of lifestyle business and engineering business acquisition as strong value accretive moves,” stated the report.
Also read: Stock recommendations for November 24, 2023: CDSL, Bajaj Auto and Star Health
Also read: Persistent Systems, Zensar, eClerx, Firstsource Sol: What IT firms say at JMF Conference 2023