Raymond aims to be debt-free in three years through cost cutting, working capital optimisation
Textiles and garment business Raymond is focusing on reducing its debt and aims to be debt-free in the coming three years by cutting costs and optimising its working capital.
The business has reduced its operating costs by Rs 453 crore compared to its costs before the pandemic in 2019 by focusing on cost optimisation, it said in its latest annual report for the 2022 financial year, ET Bureau reported. Raymond reduced its net debt from Rs 1,416 crore in the 2021 financial year to Rs 1,088 crore in the 2022 fiscal.
“The company is focused on liquidity management through cost reduction initiatives and working capital optimisation with a stated aim of becoming a debt-free company in the next three years,” said Raymond in a statement, the Press Trust of India reported.
Raymond has lowered its Net Working Capital days, which is the number of days it takes a business to turn working capital into revenue, by more than 50%. Its NWC days now total 45 as of March, 2022, down from 98 days in September, 2019, according to the business.
“The profitability and working capital management have helped in generating free cash flows, thereby reducing our debts, drastically,” said Raymond’s chairman and managing director Gautam Hari Singhania, the Press Trust of India reported. “Our strategy is to focus on the core and recalibrate the fundamental metrics of each business such as revenue, cost, and working capital.”
Raymond is in the process of de-merging its business-to-customer business which includes Raymond Apparel Limited, its garment business. The aim of this restructuring is to create a focused B2C entity for increased expediency.
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