Highlights of the call:

Apparel segment sales grew 18% to Rs 211 crore due to double digit growth across all brands. Loss at EBITDA fell 50% to Rs 6 crore.

Textile segment sales grew 5% due to higher volumes and better realization in shirting fabric across B2C channels. EBIDTA margin improved 350 basis points y-o-y to 14.4%.

Retail stores count as on June 2015 stood at 1015 stores across all formats including 47 stores in the Middle East and SAARC regions. Middle East and SAARC regions cover 1.9 million of retail space. In June 2015 quarter like to like sales growth across all formats was 6%. Secondary sales across retail network registered 10% growth.

Luxury cotton shirting fabric sales grew 10%to Rs 100 crore. EBITDA margins improved by 67 basis points to 10.1%.

Denim sales fell 11%to RS 220 crore. But EBITDA grew 4% to Rs 24 crore due to lower raw material cost.

Sales of auto components were impacted due to unfavourable product mix and depreciating Euro. The company has taken various measures to grow this business which will be visible in coming 4 quarters.

Garmenting sales fell 7% to Rs 116 crore. EBITDA fell from Rs 16 crore to Rs 6 crore due to lower capacity utilization and higher wage cost.

Tool and hardware business grew 5% to Rs 100 crore. EBITDA rose 15% to Rs 5 crore.

Overall the performance is good but does not reflect full year potential.

Advertisement expenses grew 46% to Rs 54 crore. Advertisement expenses were up as the company co-sponsored IPL.

In Textile 6% of sales and in apparel 10% of sales are spent in advertising.

Yarn, wool, polyester have gone down in commodity market. Viscose has gone up. The company will take time to see if it will have to reduce the price.

If the management feels that the price will go down it will built raw material inventories. Generally the company buys 3-4 times a year.

Store closure could be due to relocation issue or rental issue.

The company has witnessed improved orders in the month of July.

June 2015 quarter witnessed sluggish demand from the consumers in the domestic and export markets. This was more visible in garmenting and automotive segments.

Thrust on investment in Brand building through higher ad spends, store roll outs, store renovation etc will enable the company to improve its performance for the rest of the year.

Little early for the company to comment on Impact of GST but don't know the company will come under which bracket. If the company is in the lowest bracket it could still be impacted by 3-4%.

The company is also not claiming any input benefit which runs into 6% as it has claimed exemption. Thus if the company falls in lower bracket the impact will be low but if it falls in to higher bracket impact will be higher.

Advertisement will be continued at the current level.

Debt Equity is at 1.4. There will not be any further rise in debt equity level.

Interest cost is less by Rs 2 crore on absolute basis. Due to lower interest rates scenario. Long Term credit rating upgraded to AA from AA-by CARE.

Cost of borrowing is 9.2%.

The company believes that interest rates will continue to fall.

The company earned Rs 4 crore as one time income towards sale of building (capital gain). This was in branded apparel segment.

The company also earned one time income of Rs 8 crore towards power subsidy refund for its branded textile segment. 

Depreciation marginally lower than last year in absolute terms. Last year revised companies act had impacted depreciation.

Raw material prices are soft but dollar has strengthened.

Going forward the company will have benefit of lower raw material cost. But since the company has inventory of 5-6 months it will accrue with time lag.

Suiting fabric sales remained flat and volumes fell 4%.

In exclusive retail network the company added 20 new stores and closed 8 stores. It also completed 11 stores renovation and 18 stores are under renovation.

Blended same store sales growth across formats was 6 % y-o-y. Total sales growth across the exclusive network was 10% y-o-y.

In garmenting business Transaction Closure for acquisition of Robot Systems Private Limited which as capacity of 1.26 mn garments per annum is delayed. This is expected to be complete in August 2015.

Capex for FY 2016 will be Rs 240-250 crore.

In high value cotton shirting business capacity expansion of 10m meters expected to be completed by Sep 2015.

For its denim JV capacity expansion of 9m meters is expected to be completed by Mar 2016.

The company plans to grow product categories by leveraging Raymond brand. 

It will continue to invest in brand building and expand and modernize retail network.

The company will re-engineer operations to drive cost efficiencies.

Low growth in wool blended Fabric and sluggish consumer demand is a concern.