Slightly poor results from Raymond Lifestyle but management had indicated in Q1 concall that Q2 will show slight recovery and Q3 & Q4 of this year will be very strong due to weddings and festive season.

Also an exceptional item, Stamp Duty on demerger of around 58 crore has been paid which further lowers the PAT.

Results

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Let’s discuss Zen Technologies’ financial performance and outlook based on the interview with Ashok Atluri, Chairman and Managing Director, on CNBC TV18.

• Zen Technologies is confident in achieving its revenue guidance of ₹900 crore for FY25. They believe they are on track after a good performance in the first two quarters.
• They expect EBITDA margins to be around 35%. While first-half margins are currently higher at 36.8%, they are maintaining a conservative outlook.
• Receivables have increased, impacting operational cash flow. However, the company expects to collect most outstanding payments within the next two months and bring down receivables. They anticipate average receivable days to stabilize around 150 days.
• Exports are also expected to remain strong, contributing approximately 30% to the total order book. They are on track to meet their export guidance of ₹300 crore, having already achieved 133% of the target in the first half of FY25.
• Order replenishment is anticipated towards the end of Q3 and in Q4 of FY25. The company expects significant order inflows during this period. Excluding approximately ₹35-40 crore from annual maintenance contracts (AMCs), the remaining ₹850+ crore of the ₹900 crore target will come from equipment orders.
• Zen Technologies is actively pursuing inorganic growth opportunities through acquisitions. They are looking at potential targets in the electronic warfare and simulator segments, with deal sizes ranging from ₹100 crore to ₹300 crore. They aim to close an acquisition in FY25, but significant contributions to growth are expected in FY27 after the integration process is complete.

Overall, Zen Technologies appears to be in a strong position to achieve its growth targets for FY25, driven by strong domestic demand, robust exports, and potential acquisitions.

Systematix initiates coverage on Raymond Lifestyle after demerger, assigns a BUY rating with a target price of Rs 2,845 (vs. earlier fair value of Rs 2,293) for its lifestyle business on SOTP-based method, valuing branded textiles, branded apparel and B2B businesses at 11x/18x/9x Sept 2026E EV/EBITDA.
Link to report