Brokerage firm Jefferies has initiated 'Buy' ratings on Welspun Living and Raymond Lifestyle, setting targets of ₹260 and ₹900 respectively. The report highlights India's textile export potential driven by the 'China+1' sourcing shift and recent trade agreements with the UK. Investors should monitor how these firms translate these macro advantages into sustained order growth and profit margins.
Jefferies has initiated coverage on Welspun Living and Raymond Lifestyle, issuing 'Buy' ratings for both companies. The brokerage believes that Indian textile manufacturers are entering a structural growth phase, supported by global buyers looking to diversify supply chains away from China, a trend commonly referred to as the 'China+1' strategy. This transition, combined with improved tariff competitiveness following the India-UK free trade agreement that became effective in July 2026, provides a significant tailwind for domestic exporters.
Growth Case for Welspun and Raymond
For Welspun Living, the brokerage highlights the company's strong position in the global home textiles market, covering products like bed and bath linen, rugs, and flooring. Jefferies projects that the company’s profit growth will outpace its revenue expansion in the coming years as margins recover and return on capital employed improves. The price target of ₹260 is based on the expectation that Welspun will leverage its established distribution network to capture increased demand.
Raymond Lifestyle is viewed as a turnaround opportunity. The investment thesis here is built on the company's shift toward higher-value premium products, a recovery in its apparel business, and growth in export-led garmenting. With the stock trading at approximately 6 times its one-year forward earnings before interest, taxes, depreciation, and amortization, the brokerage sees the valuation as attractive and has assigned a target price of ₹900.
Sector Outlook and Investor Risks
While the trade agreements—including the UK deal and a potential EU trade agreement expected in 2027—offer clear advantages, the ultimate benefit to shareholders depends on execution. Indian companies must prove they can win market share from other manufacturing hubs like Vietnam and Bangladesh.
Investors should be aware of potential risks that could impact these projections. A global economic slowdown in key export markets like the US and Europe could dampen demand for discretionary items like textiles. Additionally, volatile logistics and freight costs can affect profitability. The real test for both companies will be their ability to convert these trade benefits into actual commercial orders and maintain profit margins despite competitive pricing pressure. Future updates on order book growth and quarterly margin performance will be critical monitorables to verify if the brokerage's long-term earnings targets remain achievable.