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Raymond Ltd plans to keep its advertising and promotion spending as a percentage to sales in the range of 4-5 per cent on an annual basis.
The company’s adspends jumped 47.8 per cent year-on-year to Rs 102 crore. As percentage of revenues it jumped 182 basis points to 6.8 per cent during the December 2015 quarter.
“We have reached an optimal level of A&P spends now. Overall it will be maintained at a level of 4-5 per cent of sales,” the company said in a post results analysts’ conference call today.
In nine months ended December 31, the company’s advertisement expenses jumped over 41 per cent year-on-year compared to more than 4 per cent rise in consolidated revenues.
Capex to come down The company’s capex is also expected to come down going ahead partly due to lesser number of stores to be renovated. From 100 stores by end of FY16, the company only plans 50-60 new stores for renovation in FY17.
The company spent roughly Rs 94 crore on stores roll out and maintenance capex, which includes renovation, out of Rs 252 crore capex done in nine months ended December 31, 2015. Net debt of the company increased by Rs 289 crore largely led by capex and increased working capital requirements and stood at Rs 1,726 crore as on December 31, 2015. This will reduce in the subsequent quarters, the company said
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