A person upgrading from bicycles to motorcycles is a real sign of progress for India, but its pace has slowed post the pandemic since covid and high inflation have impacted the lower segment in the country more than the higher segment, said Gautam Hari Singhania, chairman and managing director of Raymond Ltd. In an interview, Singhania said the recovery might be delayed by a few quarters, but will eventually happen since inflation is slowing. Edited excerpts:
As we come out of the covid pandemic, what were your learnings from covid?
The biggest learning in covid is the philosophy of life. When it comes to the question of survival, then you look at life in a very different manner. And you look at every single aspect differently, too. You had to challenge every cost here to find a way to survive. So, I think you learn a hell of a lot. For businesses, the biggest learning is how you do business differently. The business has to go on. So, how do you make yourself more efficient? How do you cut costs? How do you right-size your business? I think these are the biggest learnings.
Has the retail business recovered from the lows of covid?
I think we’re seeing, you know, revenge shopping…you’re seeing a lot of pent-up demand that’s getting absorbed. So, I think we definitely see higher than pre-covid levels. It’s great to see people in the shops again. Shopping is not just buying but also an experience, and people want that experience with shopping. We have seen a strong bounce-back, especially in our physical retail stores.
Our consumer businesses showcased healthy growth with buoyant sentiments and celebrations across the country, leading to higher revenues. The garment exports business continues with its strong order book from the US and Europe markets and leverages the “China+1″ strategy. Sales in export markets were at a healthy level at ₹282 crore, a growth of 39% compared with ₹203 crore in the previous year, led by high demand in the US and Europe markets.
Luxury carmakers say they have seen a substantial increase in sales from smaller towns and cities post the pandemic. Has contribution from smaller cities increased for your businesses, too?
Raymond has fundamentally been available in 650 cities. And so, we don’t see any difference in our business because I think every segment of the business, every city, every place has come back. So, we’ve been in 650 cities, and we continue to expand on those markets. So, that’s good for us.
You once said that bicycles being replaced by motorcycles outside your manufacturing units is a sign of real progress. However, motorcycle sales have not bounced back the same way as premium or luxury cars. Does that concern you?
When you move from a cycle to a motorcycle, scooter or motorized vehicle, that is, upgrading the same guy who was working in a factory, who could afford a cycle today can afford a motorcycle, that is progress. I don’t know why the motorcycle segment has not recovered per se. But my reading of the situation is that the lower segment of society was more impacted by inflation than the upper segment. And motorcycles and scooters fundamentally catering to the low strata of society, probably got impacted. Let’s say, I guess, the reason is the impact of covid and inflation both that has hurt the lower segment more than it has hurt the upper segment. So, only a lag of a few quarters or whatever. So, eventually, it is coming back. Inflation is moderating a little bit better now. So, it’s getting better.
How do you see India’s recovery?
I think we are seeing a good marriage season coming up. We’ve got 3 million odd weddings coming up, and it impacts every segment of society. That straddles hospitality, aviation, catering, food and beverages, clothes, cars, taxis, hotels… So, it’s a good thing.
The biggest strength that India has is its very large consumption economy, aided by a very large middle-class consumption economy. So, that is really the biggest strength. We’re going to score. as we have more and more in the middle class who will continue to spend. I think India is the best economy today in the world. Where else could you see this kind of economic growth–you have seen very low single digits, both plus or minus, in most economies. India is currently the best place, and I am very optimistic about the future of India.
On your real estate business, how has the response been so far? Is there a plan to launch projects beyond Mumbai?
The response to Raymond Realty has been phenomenal. It’s been exponential since we did the delivery of the first project. I think people realize that Raymond is a serious player. Today, we are the number one development in that micro market. Moving forward, we are, of course, looking at more joint development projects. And as we find more joint development projects, we will expand this business with a strong team of 300 people and build a good reputation. Currently, we are focused only on Mumbai.