The past two decades have seen Gautam Singhania, chairman and managing director of Raymond, actively removing himself from ventures that don’t align with his goals for the organisation. He has previously left companies in the steel, cement, and synthetics industries. This journey included the recent sale of the consumer care business to the Godrej group for Rs 2,825 crore in an all-cash deal.
“We have always maintained that if we can sell some assets for a profit to the FMCG industry, it will benefit both parties. As a result, the business is totally debt-free as of right now, he added, noting that every company can be bought—for a price.
The figures also demonstrate his desire to get the company profitable and, of course, pay off the debt. The group’s net debt in FY23 was Rs 689 crore, a significant decrease from Rs 1,088 crore in FY22. At the same period, net profit increased from Rs 260 crore to Rs 529 crore, more than doubling. Additionally, the company would be debt-free after the first-quarter results are released.
But what caused the company to leave the consumer care industry? “Covid had severely wounded everyone. In addition, there were problems with management and other things. Additionally, you must concentrate when multiple issues arise at once. Every business makes mistakes, and we did too. I won’t delve into it, but we must take note of our errors, Singhania added.
Consequently, a reorganisation plan was implemented with the intention of turning the organisation around at a time when the globe was still dealing with the pandemic. The strategy called for drastic cost reductions totaling roughly Rs 700 crore. Long-term cost reductions of an additional Rs 400 crore were also planned. Making the companies profitable and efficient came first, followed by balance sheet deleveraging. Then, everything started to come together.
“The restructuring was a launch pad to do more things. The turnaround has happened, but it doesn’t end here. Now the aircraft has to take off,” he added.
Going forward, the group intends to restructure Raymond into three businesses – real estate, lifestyle/textiles and engineering.
