How is your real estate business doing?
Two things – one is that we are doing affordable housing — one BHK, two BHK flats which have got a lot of traction. Number two, we have created the best product in the market. Number three, post pandemic, people have realised that they would like independent homes and number four, we are delivering far better than we had thought possible ourselves because there is a lot of focus on the business and a combination of the product, price, location and delivery has really built up confidence in our project.
There was enough talk from the competition that Raymond has never done real estate before and they cannot deliver. I put out a few Instagram posts silencing my critics. I put out the pictures of our buildings and as we speak, we are four days away from the first three buildings reaching the 44th slab which is the top slab. So three buildings will be fully constructed on the 31st of this month. So we have achieved something. The fourth building is also coming up. The balance six building will also come up.
We know coming from behind in a crowded space, you have to run faster. Raymond has put its name on a project and like whatever Raymond has done in its life, we will deliver to customers’ delight.
What are your branded apparel guys telling you in terms of how is the merchandise starting to roll out? Are there a lot of orders online?
March, April was very bad but I think we are coming back very strongly. August has been good for us. September is good for us on the projections. I am cautiously optimistic but I am looking forward to a good season.
Just before the pandemic hit you had started rolling out smaller format stores in tier II, tier III towns. What is your feedback on the ground on the smaller towns beyond that 20-30 top cities?
The feedback I get in smaller towns is that they do not believe there is a pandemic. They do not feel there is anything. So it is a very different feeling.
You are touring in Europe, meeting your top customers. What is the scene there like? We gather that the economic rebound in the west and rest of the world is even stronger.
In Europe and America, the demand bounceback is very strong. One, we are getting a good share of the business of our existing customers. In the UK, the Arcadia Group that has gone under, TM Lewin that has gone under. That share is taken by existing customers of ours and so their business has grown to that extent. They have also rationalised the number of suppliers that they work with. So it has worked well for us.
So you see your share of exports rising meaningfully going forward?
Exports are looking much better to us, certainly the best in the last three, four years.
What about the domestic business? What kind of growth do you see in the next 18 to 24 months?
We should be low teens but India has been coming out of a pandemic. The more people get vaccinated, more malls open, the better it will be. There are still issues within the country and obviously tourism plays a very big part in demand. A lot of NRIs come back to India and shop in India. They like to go back to their favourite brands. A lot of people working in the Middle East come back with money to the country. All that plays a very important role. If we just come back to pre Covid levels, we would have done well.
What is the strategic vision of the management for the company from here on?
When you recalibrate you have got a good chance to reset and look at your cost structure or again look at the way you do business again and find new ways to do business like I was telling you. If you are doing Zoom trade, it is just a lot more efficient. You do not have to be in Mumbai, you do not have to be where I am.
In whichever way you look at it, it is cost efficient. We still achieve the same end result. We are still doing sales in the market without travelling and travel comes out of the cost. So there are many ways we have looked at our cost reset. We saved a substantial amount of cost and we have looked at different ways to do the same business.
Do you see scope for sustainable improvement in margins because of these measures you have taken and even the cost on the raw material side is improving?
Yes, these are all long-term measures that are good. So you have to do it and then discipline has to stay with it.
Your tools and components are part of the business which was not really seen mainstream till some time back. I am told that it has come back quite strongly and perhaps got to do with the way manufacturing engines in the country and humming in other sectors. What is happening there in your view?
Coming to our tools business, it was really a question of us focusing on it with the other priorities that the group has. We have got a good team in place, that business is growing very well. We are capturing market share and we are doing reasonably well.
So I am actually glad you said that because a lot of people make loose comments, specifically in the media without any understanding of the business. I am very appreciative of the fact that you have looked even at our small businesses and are aware that they are doing well. You would probably be aware that the group is doing extremely well today across all its businesses and we have some great plans moving forward.
What are the couple of triggers in the company a shareholder should be watching out for in terms of news flow or others?
I am very bullish on India, I am very bullish on the future. I am very committed to what we are doing and I think the organisation is very committed to what it’s doing.
