FORM 10-Q
 
                  SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549
 
              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934 
 
 
 For the Quarter ended                March 30, 1997                    
  
 
 Commission file number               1-9298                     
 
 
 
                       RAYTECH CORPORATION                     
        (Exact name of Registrant as specified in its charter)
 
 
 
            DELAWARE                               06-1182033     
 (State or other jurisdiction of              (I.R.S. Employer       
 incorporation or organization)               Identification No.) 
 
 
    Suite 512, One Corporate Drive 
    Shelton, Connecticut                                  06484     
 (Address of principal executive offices)               (Zip Code) 
 
 
                            203-925-8023           
                   (Registrant's telephone number)  
 
 
 Indicate by check mark whether the Registrant (1) has filed all
 reports to be filed by Section 13 or 15(d) of the Securities
 Exchange Act of 1934 during the preceding 12 months (or for such
 shorter period that the Registrant was required to file such
 reports) and (2) has been subject to such filing requirements
 for the past 90 days.
 
 
                   Yes   X              No           
 
 As of March 30, 1997, 3,256,282 shares of the Registrant's
 common stock, par value $1.00, were issued and outstanding.
 
 
                              Page 1 of 26
   
                        RAYTECH CORPORATION  
 
                               INDEX  
 
 
                                                            Page     
                                                           Number
 
 PART I. FINANCIAL INFORMATION: 
 
 Item 1.   Condensed Consolidated Balance Sheets as           
           at March 30, 1997 and March 31, 1996                3
 
           Condensed Consolidated Statements of  
           Operations for the thirteen weeks ended
           March 30, 1997 and March 31, 1996                   4
          
           Condensed Consolidated Statements of Cash  
           Flows for the thirteen weeks ended
           March 30, 1997 and March 31, 1996                   5
                                                 
           Notes to Condensed Consolidated 
           Financial Statements                                6 
  
  Item 2.  Management's Discussion and Analysis of                    
           Financial Condition and Results of Operations      14 
  
  
  PART II. OTHER INFORMATION
  
  Item 1.  Legal Proceedings                                  17
  
  Item 6.  Exhibits and Reports on Form 8-K                   23 
  
           Signature                                          24 
  
           Exhibit 11 - Earnings Per Share Computation        25
  
  
  
  
  
  
  
  
  
  
                                 -2-
    <PAGE>
  

RAYTECH CORPORATION

<TABLE>
 
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)              
<CAPTION>
                                                                  March 30,   Dec. 29,
As at                                                               1997       1996  
<S>                               <C>                            <C>         <C>
                                                                 
ASSETS                                                                        
Current assets                                                                
  Cash and cash equivalents                                      $  3,921    $ 11,341
  Trade accounts receivable, less allowance of $672                                   
    for 1997 and $726 for 1996                                     27,666      23,866
  Inventories                                                      29,139      28,709
  Other current assets                                              9,064       8,120
      Total current assets                                         69,790      72,036

Property, plant and equipment                                     128,393     127,811
  Less accumulated depreciation                                    77,395      76,686
      Net property, plant and equipment                            50,998      51,125
Investment in securities                                            2,100       2,100 
Investment in and advances to affiliates                           10,086       9,972
Other assets                                                        5,080       4,922
Total assets                                                     $138,054    $140,155
                                                                                      
LIABILITIES                                                                           
Current liabilities                                                                   
  Notes payable                                                  $  9,044    $ 10,701
  Current portion of long-term debt - Raymark                      12,409      12,007
  Current portion of long-term debt                                   152         152
  Accounts payable                                                 13,688      18,999
  Accrued liabilities                                              23,150      22,759
      Total current liabilities                                    58,443      64,618
                                                                                      
Long-term debt due to Raymark                                      26,878      27,437
Long-term debt                                                        708         237
Postretirement benefits other than pensions                         9,731       9,429
Other long-term liabilities                                         4,693       4,419
Total liabilities                                                 100,453     106,140
                                                                                   
SHAREHOLDERS' EQUITY                                                                  
Capital stock                                                                         
  Cumulative preference stock, no par value                                           
  800,000 shares authorized, none issued & outstanding                                
  Common stock, par value $1.00                                       -           -   
  7,500,000 shares authorized, 5,388,341 and 5,371,821                      
    issued and outstanding in fiscal 1997 and 1996, respectively    5,388       5,372
Additional paid in capital                                         70,230      70,208 
Accumulated deficit                                               (34,640)    (38,922)
Cumulative translation adjustment                                   1,184       1,918
                                                                   42,162      38,576 
Less treasury shares at cost                                       (4,561)     (4,561)
      Total shareholders' equity                                   37,601      34,015
Total liabilities and shareholders' equity                       $138,054    $140,155
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>

<PAGE>
                           RAYTECH CORPORATION
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except share data)



<TABLE>
<CAPTION>

                                                      March 30,      March 31,
For the 13 Weeks Ended                                  1997           1996  
<S>                                                 <C>            <C>
                                                                    
                                                       
Net sales                                           $  59,121       $ 52,037
Cost of sales                                         (45,193)       (38,238)
                                                       
  Gross profit                                         13,928         13,799
                                                       
Selling, general and administrative expenses           (7,141)        (6,637)
 
  Operating profit                                      6,787          7,162
                                                                   
Interest expense                                         (318)          (359)
Interest expense - Raymark                               (469)          (413)
Other income, net                                         482            208
                                                        
Income before provision for income taxes
  and minority interest                                 6,482          6,598
Provision for income tax                               (1,954)        (2,617)
Minority interest                                        (246)          (290)
    
Net income                                          $   4,282       $  3,691
    
Net income per share                                $    1.22       $   1.09

Weighted average shares outstanding                 3,522,455      3,372,574
              
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>

  
                            RAYTECH CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (in thousands)


<TABLE>
<CAPTION>
                                                                                          
                                                       March 30,    March 31,
For the 13 Weeks Ended                                   1997         1996  
<S>                                                   <C>          <C>

    Net cash provided by operating activities         $  4,521     $  2,583

Cash flow from investing activities:
  Capital expenditures                                  (2,859)      (1,366)
  Proceeds on sale of property, plant and equipment         54           22
  Note receivable due from AFM                              37          -
  Equity Investment in AFM                                 -         (9,400)
  Payments to AFM for land and building                 (7,076)         -
  Payments to AFM for machinery and equipment              -         (3,500)
    Net cash used in investing activities               (9,844)     (14,244)

Cash flow from financing activities:

  Payments on short-term borrowings                     (1,498)      (3,241)
  Principal payments on long-term debt                     (42)         (42)
  Proceeds from long-term borrowings                       484          -
  Payments on borrowings from Raymark                     (951)         -   
  Other                                                    (32)          (1)

    Net cash used in financing activities               (2,039)      (3,284)

Effect of exchange rate changes on cash                    (58)         (18)

Net change in cash and cash equivalents                 (7,420)     (14,963)

Cash and cash equivalents at beginning of period        11,341       19,598

Cash and cash equivalents at end of period            $  3,921     $  4,635


<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
    
<PAGE>
                                     
    
                        RAYTECH CORPORATION  
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
              (dollars in thousands, except share data)
  
  NOTE:  For purposes of the notes and Item 2, Raytech Corporation
         and its subsidiaries are referenced on a consolidated basis
         as "Raytech" or the "Company" where appropriate.
  
   
  NOTE A - RESTRUCTURING OF RAYTECH, CHAPTER 11 PROCEEDINGS 
           AND OTHER LITIGATION
  
        The restructuring of the Company in October 1986 was for
  the stated purpose of separating Raytech from Raymark Industries,
  Inc.'s ("Raymark") substantial asbestos-related liabilities and
  litigation.  For a further discussion of this matter, please refer
  to Raytech's 1996 Form 10-K, Part 1, Item 1, pages 4-7, 13-19.  As
  part of the restructuring process of Raytech, Raymark common stock
  was divested and sold in May, 1988 to Asbestos Litigation
  Management, Inc.
  
        Despite the restructuring plan implementation and
  subsequent divestiture of Raymark, Raytech was named a co-
  defendant with Raymark and other named defendants in approximately
  3,300 asbestos-related lawsuits as a successor in liability to
  Raymark.  The dollar value of these lawsuits cannot be estimated. 
  Until February 1989, the defense of all such lawsuits was provided
  to Raytech by Raymark in accordance with the indemnification
  agreement included as a condition of the purchase of the Wet
  Clutch and Brake Division and German subsidiary from Raymark in
  1987.  In February 1989, an involuntary petition in bankruptcy was
  filed against Raymark, and subsequently, a restrictive funding
  order was issued by an Illinois Circuit Court, which required one
  of Raymark's insurance carriers to pay claims but not defense
  costs, and another insurance carrier had been declared insolvent. 
  These circumstances caused Raymark to be unable to fund the costs
  of defense to Raytech in the asbestos-related lawsuits referenced
  above, as provided in the indemnity section of the acquisition
  agreement.  Raytech management was informed that Raymark's cost of
  defense and disposition of cases up to the automatic stay of
  litigation under the involuntary bankruptcy proceedings was
  approximately $333 million of Raymark's total insurance coverage
  of approximately $395 million.  Raytech management has also been
  informed that as a result of the dismissal of the involuntary
  petition, Raymark has encountered pending and newly filed
  asbestos-related lawsuits but has received $27 million from a
  state guarantee association to make up the insurance policies of
  the insolvent carrier and $32 million in other policies to defend
  against such litigation.
<PAGE>
  
        In an asbestos-related personal injury case decided in
  October 1988 in a U.S. District Court in Oregon, Raytech was ruled
  under Oregon equity law to be a successor to Raymark's asbestos-
  related liability.  The successor ruling was appealed by Raytech
  and in October 1992 the Ninth Circuit Court of Appeals affirmed
  the District Court's judgment on the grounds stated in the
  District Court's opinion.  The effect of this decision extends
  beyond the Oregon District due to a Third Circuit Court of Appeals
  decision in a related case cited below wherein Raytech was
  collaterally estopped (precluded) from relitigating the issue of
  its successor liability for Raymark's asbestos-related
  liabilities.
  
        As the result of the inability of Raymark to fund
  Raytech's costs of defense recited above, and in order to obtain a
  ruling binding across all jurisdictions as to whether Raytech is
  liable as a successor for asbestos-related and other claims,
  including claims yet to be filed relating to the operations of
  Raymark or its predecessors, on March 10, 1989, Raytech filed a
  petition seeking relief under Chapter 11 of Title 11, United
  States Code in the United States Bankruptcy Court, District of
  Connecticut.  Under Chapter 11, substantially all litigation
  against Raytech has been stayed while the debtor corporation and
  its non-filed operating subsidiaries continue to operate their
  businesses in the ordinary course under the same management and
  without disruption to employees, customers or suppliers.  In the
  Bankruptcy Court a creditors' committee was appointed, comprised
  primarily of asbestos claimants' attorneys.  In August 1995, an
  official committee of equity security holders was appointed for a
  limited time relating to a determination of equity security
  holders' interest in the estate.
  
        Since the bankruptcy filing several entities have
  asserted claims in Bankruptcy Court alleging environmental
  liabilities of Raymark based upon similar theories of successor
  liability against Raytech as alleged by asbestos claimants.  These
  claims are not covered by the class action referenced below and
  will be resolved in the bankruptcy case.  The environmental claims
  include a claim of the Pennsylvania Department of Environmental
  Resources ("DER") to perform certain activities in connection with
  Raymark's Pennsylvania manufacturing facility, which includes
  submission of an acceptable closure plan for a landfill containing
  hazardous waste products located at the facility and removal of
  accumulated baghouse dust from its operations.  In March 1991, the
  Company entered a Consent Order which required Raymark to submit a
  revised closure plan which provides for the management and removal
  of hazardous waste, for investigating treatment and monitoring of
  any contaminated groundwater and for the protection of human
  health and environment at the site, all relating to the closure of
  the Pennsylvania landfill and to pay a nominal civil penalty.  The
  estimated cost for Raymark to comply with the order is $1.2
  million.  The DER has reserved its right to reinstitute an action
  <PAGE>
  against the Company and the other parties to the DER order in the
  event Raymark fails to comply with its obligations under the
  Consent Order.  Another environmental claim was filed against the
  Company by the U.S. Environmental Protection Agency for civil
  penalties charged Raymark in the amount of $12 million arising out
  of alleged Resource Conservation and Recovery Act violations at
  Raymark's Stratford, Connecticut, manufacturing facility.  
  
        It is possible that additional claims for reimbursement
  of environmental cleanup costs related to Raymark facilities may
  be asserted against Raytech, as successor in liability to Raymark. 
  In January 1997, the U.S. Departmental Protection Agency ("EPA")
  and the State of Connecticut filed suit against Raymark claiming
  $212 million in damages for cleanup of the Stratford, Connecticut,
  site.  The EPA has also filed a bankruptcy claim against Raytech
  as a successor to Raymark for cleanup of the Stratford site and
  other Raymark sites.  Determination of Raytech's liability for
  such claims, if any, is subject to Bankruptcy Court deliberations
  and proceedings.
  
        In April 1996, the Indiana Department of Environmental
  Management ("IDEM") advised Raybestos Products Company ("RPC"), a
  wholly-owned subsidiary of the Company, that it may have
  contributed to the release of lead and PCB's (polychlorinated
  biphenyls) found in small waterways near its Indiana facility.  In
  June, IDEM named RPC as a potentially responsible party ("PRP"). 
  RPC notified its insurers of the IDEM action and one insurer
  responded by filing a complaint in January 1997 in the U.S.
  District Court, Southern District of Indiana, captioned Reliance
  Insurance Company vs. RPC seeking a declaratory judgment that any
  liability of RPC is excluded from its policy with RPC.  RPC
  continues to assess the extent of the contamination and its
  involvement and is currently negotiating with IDEM for an agreed
  order of cleanup.  The Company intends to offset its investigation
  and cleanup costs against its notes payable to Raymark when such
  costs become known pursuant to the indemnification clause in the
  wet clutch and brake acquisition agreement since it appears that
  any contamination would have occurred during Raymark's ownership
  of the Indiana facility.  Blood tests administered to residents in
  the vicinity of the small waterways revealed no exposure.
  
        As a result of an inspection, the Company has been
  notified that the operations purchased from AFM in January 1996 in
  Sterling Heights, Michigan, are in violation of a consent order
  issued by the Michigan Department of Environmental Quality ("DEQ").  
  The consent order included a compliance program providing for 
  measures to be taken to bring certain operations into compliance 
  and recordkeeping on operations in compliance.  Potential fines 
  for the violations could be as high as $4.6 million; however, the 
  Company is in negotiations with the DEQ and believes it will 
  resolve the matter for substantially less.  The Company is working 
  <PAGE>
diligently to get its operations in compliance.  The Company has
  accrued its estimate of the probable cost of resolution of this
  matter.
  
        Under bankruptcy rules, the debtor-in-possession has an
  exclusive period in which to file a reorganization plan.  Such
  exclusive period had been extended by the Bankruptcy Court pending
  the conclusion of the successor liability litigation.  However, in
  December 1992, the creditors' committee filed a motion to
  terminate the exclusive period to file a plan of reorganization. 
  At a hearing in May 1993, the motion was denied by the Bankruptcy
  Court but was appealed by the creditors' committee.  In November
  1993, the U.S. District Court reversed the Bankruptcy Court and
  terminated the exclusive period to file a plan of reorganization
  effective in January 1994.  Accordingly, any party in interest,
  including the debtor, the creditors' committee, or a creditor
  could thereafter file a plan of reorganization.
  
        In May 1994, Raytech filed a Plan of Reorganization
  ("Debtor's Plan") in the U.S. Bankruptcy Court for the purpose of
  seeking confirmation allowing Raytech to emerge from the
  bankruptcy filed March 10, 1989.  Important conditions precedent
  to confirmation of the Debtor's Plan include a final judgment in
  the litigation to determine whether Raytech is a successor to the
  liabilities of Raymark and a resolution of the environmental
  claims or other claims filed or to be filed by governmental
  agencies.  The Debtor's Plan provides that in the event Raytech is
  found to be a successor, it is to establish a successor trust
  funded by an amount determined to be the difference between what
  Raytech should have paid for the businesses purchased from Raymark
  less the amount actually paid and less amounts to be paid for
  environmental and other claims.  This remedy would satisfy its
  obligations as a successor in full and render all claimants
  unimpaired, thereby eliminating the need for balloting and all
  equity shareholders would retain their interests in full. 
  Raytech's management believes the Debtor's Plan to be confirmable. 
  In September 1994, the Creditors' Committee filed its own Plan of
  Reorganization in competition to the Debtor's Plan ("Creditors'
  Plan").  The Creditors' Plan calls for the elimination of Raytech
  Corporation and its stockholders to be replaced with a new
  Raytech.  All of the stock of new Raytech would then be
  distributed to unsecured claimants, environmental claimants and
  both past and future asbestos disease claimants on a formulated
  basis set forth in the Plan.  Current stockholders of Raytech
  would receive nothing under the Plan.  Raytech believes the
  Creditors' Plan is unconfirmable and will vigorously contest
  attempts to have it confirmed while it continues to try to get the
  Debtor's Plan confirmed.  Upon motion of the parties and support
  of the Bankruptcy Court, the major interested parties agreed in
  August 1995 to participate in non-binding mediation to attempt to
  effectuate a consensual plan of reorganization.  The mediation
  process commenced in October 1995 and was concluded in March 1996
  <PAGE>
  without agreement for a consensual plan of reorganization.  The
  competing plans of Raytech and its creditors will now return to
  Bankruptcy Court procedures.  The outcome of these matters is
  expected to take considerable time and is uncertain.  If an
  adverse plan is confirmed, it would have a material adverse impact
  on Raytech and its stockholders.
  
        Other matters in the Bankruptcy Court include:  (1) In
  April 1996, the creditors' committee filed a motion for
  appointment of a trustee based upon alleged breaches of the
  Company's fiduciary obligations to its creditors.  The Company
  will resist the motion when heard; however, the motion has been
  continued without a further hearing date set.  (2) In September
  1996, Raytech filed a motion to dismiss its bankruptcy petition
  for the reason that Raymark appears to again be capable of
  providing indemnity to claims pending and that may be filed
  against Raytech.  The said motion to dismiss has been continued by
  the Court without a further hearing date set.  (3) The process for
  confirmation of a  reorganization plan was begun in November 1996
  with arguments being presented for a bar date and claim forms. 
  The process has been continued indefinitely pending the completion
  of other matters before the Bankruptcy Court.  (4) In November
  1996, Raytech filed an adversary proceeding complaint against the
  creditors' committee, et al., seeking a declaratory judgment of
  the Bankruptcy Court that Raytech's liability to present and
  future creditors of Raymark under the theory of successor
  liability is limited pursuant to bankruptcy law.  Scheduling of
  the proceedings is presently being considered by the Court.  (5)
  In January 1997, the creditors' committee filed a motion for leave
  to file an adverse proceeding complaint against Raymark, et al.
  seeking to have the Raytech Bankruptcy Court assert control over
  Raymark and its assets on the grounds that the reorganization of
  Raytech in 1986 and the corporate transfers to Raymark in 1988
  were fraudulent.  The motion was continued without a further
  hearing date set.  (6) In March 1997, the creditors' committee
  filed a motion for relief from the automatic stay to permit the
  commencement of an adversary proceeding against Raytech to
  litigate alternative theories of liability bearing upon the extent
  to which Raytech may be liable to Raymark's creditors.  The motion
  is awaiting a date for hearing.
   
        In June 1989 Raytech filed a class action in the
  Bankruptcy Court against all present and future asbestos claimants
  seeking a declaratory judgment that it not be held liable for the
  asbestos-related liabilities of Raymark.  It was the desire of
  Raytech to have this case heard in the U.S. District Court, and
  since the authority of the Bankruptcy Court is referred from the
  U.S. District Court, upon its motion and argument the U.S.
  District Court withdrew its reference of the case to the
  Bankruptcy Court and thereby agreed to hear and decide the case. 
  In September 1991, the U.S. District Court issued a ruling
  dismissing one count of the class action citing as a reason the
  <PAGE>
  preclusive effect of the 1988 Oregon case, previously discussed,
  under the doctrine of collateral estoppel (conclusiveness of
  judgment in a prior action), in which Raytech was ruled to be a
  successor to Raymark's asbestos liability under Oregon law.  The
  remaining counts before the U.S. District Court involve the
  transfer of Raymark's asbestos-related liabilities to Raytech on
  the legal theories of alter-ego and fraudulent conveyance.  Upon a
  motion for reconsideration, the U.S. District Court affirmed its
  prior ruling in February 1992.  Also, in February 1992, the U.S.
  District Court transferred the case in its entirety to the U.S.
  District Court for the Eastern District of Pennsylvania.  Such
  transfer was made by the U.S. District Court without motion from
  any party in the interest of the administration of justice as
  stated by the U.S. District Court.  In December 1992, Raytech
  filed a motion to activate the case and to obtain rulings on the
  remaining counts which was denied by the U.S. District Court.  In
  October 1993, the creditors' committee asked the Court to certify
  the previous dismissal of the successor liability count.  In
  February 1994, the U.S. District Court granted the motion to
  certify and the successor liability dismissal was accordingly
  appealed.  In May 1995, the Third Circuit Court of Appeals ruled
  that Raytech is collaterally estopped (precluded) from
  relitigating the issue of its successor liability as ruled in the
  1988 Oregon case recited above, affirming the U.S. District
  Court's ruling of dismissal.  A petition for a writ of certiorari
  was denied by the U.S. Supreme Court in October 1995.  The ruling
  leaves the Oregon case, as affirmed by the Ninth Circuit Court of
  Appeals, as the prevailing decision holding Raytech to be a
  successor to Raymark's asbestos-related liabilities. 
  
        Costs incurred by the Company for asbestos-related
  liabilities are indemnified by Raymark under the 1987 acquisition
  agreements.  By agreement, Raymark has reimbursed the Company in
  part for such indemnified costs by payment of the amounts due in
  Raytech common stock of equivalent value.  Under such agreement,
  Raytech received 177,570 shares in 1990, 163,303 shares in 1991
  and 80,000 shares in 1993.  The Company's acceptance of its own
  stock was based upon an intent to control dilution of its
  outstanding stock.  In 1992, the indemnified costs were reimbursed
  by offsetting certain payments due Raymark from the Company under
  the 1987 acquisition agreements.  Costs incurred in 1994, 1995 and
  1996 were applied as a reduction of the note obligations pursuant
  to the agreements.
  
        In February 1994, a jury in the U.S. District Court for
  the Southern District of Indiana returned a verdict in favor of
  Raybestos Products Company ("RPC"), a wholly-owned subsidiary of
  the Company, for $2.9 million plus costs and against Gilbert W.
  Younger and Transgo, a corporation.  RPC had sued the defendants
  in 1990 for defamation of products and injurious falsehoods
  concerning RPC's manufactured products.  In April 1994, the Court
  granted RPC its costs, attorneys' fees and interest in addition to
  <PAGE>
  the damages awarded by the jury.  The defendants filed for
  bankruptcy under Chapter 11 in 1992 and the defendant's plan of
  reorganization was confirmed in September 1994 by a California
  Bankruptcy Court.  Under the plan of reorganization and ordered by
  the Court, the total amount of the awarded damages had been placed
  in a secured escrow account pending appeals.  In April 1995, the
  Seventh Circuit Court of Appeals affirmed the verdict except for
  the award of prejudgment interest.  In June 1995, RPC received the
  awarded damages, including post-judgment interest, in the amount
  of $4.6 million, bringing the case to a final conclusion.
  
        In January 1997, Raytech was named through a subsidiary
  in a third party complaint captioned Martin Dembinski, et al. vs.
  Farrell Lines, Inc., et al. vs. American Stevedoring, Ltd., et al.
  filed in the U.S. District Court for the Southern District of New
  York for damages for asbestos-related disease.  The case has been
  removed to the U.S. District Court, Eastern District of
  Pennsylvania and remains pending.  When required, the Company will
  deny the allegations and will vigorously defend itself against the
  claims made.  Discovery procedures have not yet begun. 
  
        The adverse ruling in the Third Circuit Court of Appeals,
  of which a petition for writ of certiorari was denied by the U.S. 
  Supreme Court, precluding Raytech from relitigating the issue of
  its successor liability leaves the U.S. District Court's (Oregon)
  1988 ruling as the prevailing decision holding Raytech to be a
  successor to Raymark's asbestos-related liabilities.  This ruling
  could have a material adverse impact on Raytech as it does not
  have the resources needed to fund Raymark's potentially
  substantial uninsured asbestos-related and environmental
  liabilities.  Determination of Raytech's actual liabilities are
  subject to the Bankruptcy Court's deliberations and rulings and
  the competing plans of reorganization filed in the Bankruptcy
  Court referenced above.
  
        The ultimate liability of the Company with respect to
  asbestos-related, environmental, or other claims cannot presently
  be determined.  Accordingly, no provision for such liability has
  been recorded in the financial statements.  The accompanying
  financial statements have been prepared assuming that the Company
  will continue as a going concern.  An unfavorable result on
  certain or all of the matters described above would have a
  material adverse effect on the Company's results of operations, 
  financial position and cash flows.  These uncertainties raise
  substantial doubt about the Company's ability to continue as a
  going concern.  The financial statements do not include any
  adjustments relating to the recoverability and classification of
  recorded asset amounts or adjustments relating to establishment,
  settlement and classification of liabilities that may be required
  in connection with reorganizing under the Bankruptcy Code.
        
  
  <PAGE>
  NOTE B - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    
           In the opinion of management, the accompanying condensed
  consolidated financial statements contain all adjustments
  necessary to fairly present the financial position of Raytech as
  of March 30, 1997 and December 29, 1996, the results of operations
  for the thirteen weeks ended March 30, 1997 and statements of cash
  flows for the thirteen weeks ended March 30, 1997.  Except for the
  matters disclosed herein, all adjustments are of a normal
  recurring nature.  The financial statements contained herein
  should be read in conjunction with the financial statements and
  related notes filed on Form 10-K for the year-ended December 29,
  1996.
  
          The year-end condensed balance sheet data was derived
  from audited financial statements but does not include all
  disclosures required by generally accepted accounting principles.
  
  
  NOTE C - INVENTORIES
  
          Net, inventories consist of the following:
  
                              March 30, 1997    December 29, 1996 
  
          Raw material           $ 9,670            $ 9,921 
          Work in process          8,793              8,033
          Finished goods          10,676             10,755
       
                                  $29,139            $28,709
   
  NOTE D - RELATED PARTIES
  
          During the first quarter of 1997, the Company purchased
  yarn from Universal Friction Composites, a related party, in the
  amount of $1,109 and at March 30, 1997, the related payable
  amounted to $205.
  
          In March 1997, Allomatic Products Company ("APC"), a
  majority-owned subsidiary, declared a cash dividend of $2.81 per
  share payable in equal quarterly installments to shareholders of
  record on March 31, 1997.  At the record date, Craig R. Smith
  beneficially owned 41,904 shares, or 40% of the outstanding
  shares. 
  
          Earnings attributable to minority shareholders of
  Allomatic Products Company have been presented net of income tax
  as minority interest in the Condensed Consolidated Statement of
  Operations.
<PAGE>
  
          In September 1996, Craig R. Smith entered into a
  consulting agreement with Raymark for services regarding asbestos
  litigation.  Fees in 1997 are to be paid to Raytech pursuant to
  the terms of the agreement.
  <PAGE>
  
    
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
           CONDITION AND RESULTS OF OPERATIONS
  
  Summary
  
        Net income for the thirteen-week period ended
  March 30, 1997 amounted to $4,282 or $1.22 per share as compared
  with $3,691 or $1.09 per share for the corresponding period in
  1996.  The overall improvement is the result of increased sales in
  the domestic market segments, partially offset by lower margins
  due to competitive pricing pressures.  European sales decreased
  primarily due to foreign currency fluctuation. 
  
  Net Sales
  
        Net sales for the thirteen-week period ended March 30,
  1997 increased 13.6% to $59,121 as compared with $52,037 for the
  same period one year ago.  The overall improvement for the
  thirteen-week period is primarily due to additional sales of
  approximately $4,657 related to the Sterling Heights operations
  and additional volume within the domestic automotive, agriculture
  and construction product market segments.  Excluding Sterling
  Heights, domestic sales increased by $3,766 compared to last year. 
  However, European sales decreased by $1,339 primarily due to
  foreign currency fluctuation.
  
  Gross Margin    
  
        Gross profit margin as a percentage of sales for the
  thirteen-week period ended March 30, 1997 is 23.6%, as compared to
  26.5% for the same period one year ago.  The overall decrease is
  primarily due to an increase in domestic manufacturing labor and
  material costs, equipment maintenance, contractual price
  reductions to certain customers and a lower gross margin on
  domestic agriculture and foreign automotive sales.
  
  Selling, General and Administrative Expense
  
        Selling, general and administrative expenses increased 
  to $7,141 as compared to $6,637 one year earlier.  Expenses are up
  due to the impact of increased sales volume on related expenses,
  an increase in research and development, additional selling
  expense to meet customer requirements and the impact of the
  acquired Sterling Heights operation of Advanced Friction Materials
  Company ("AFM").
  
  Income Taxes
  
        The effective tax rate for the thirteen weeks ended
  March 30, 1997 is 30.1%.  Included in the tax provision is an
  adjustment of prior years' accruals for tax items which are no
  longer required.
  <PAGE>
      
  Liquidity and Capital Resources
  
        During the first quarter of fiscal 1997, the Company
  generated positive cash flow from operating activities in the
  amount of $4.5 million.  The positive cash flow is the result of
  the favorable earnings during the first quarter of fiscal 1997. 
  Capital expenditures year-to-date for fiscal 1997 amounted to $3.1
  million, which is consistent with the Company's projected spending
  plan for 1997.
  
        On January 31, 1997, Raybestos Products Company
  completed the purchase of AFM Management Company for $1.0 million
  from Advanced Friction Materials Company.
  
        On January 6, 1997, Raybestos Products Company ("RPC")
  completed the purchase of land and building from Advanced Friction
  Materials Company for $6.6 million.
  
        At March 30, 1997, the Company's wholly-owned German
  subsidiaries had available unused lines of credit amounting to
  DM3,018 ($1,802) which all expire on demand.
  
        In March 1995, Raybestos Products Company ("RPC"), a
  wholly-owned subsidiary of the Company, entered into a loan
  agreement with The CIT Group/Credit Finance, Inc., which provides
  for RPC to borrow up to $15 million, consisting of a revolving
  line of credit of $10 million and a term loan of $5 million at an
  interest rate of 1.75% above the prime rate.  The loans are
  collateralized by accounts receivable, inventory and machinery and
  equipment at RPC.  The purpose of the loan is for working capital,
  capital expenditures, acquisitions and possible settlement of
  successor liability issues.  The amount outstanding under this
  loan at March 30, 1997 was $7,258.
  
        Management believes that the Company will generate
  sufficient cash flow from operations during the balance of 1997 to
  meet all of the Company's obligations arising in the ordinary 
  course of operations.
  
  <PAGE>
                    PART II. OTHER INFORMATION 
  
  
  ITEM 1.  LEGAL PROCEEDINGS
  
       The formation of Raytech and the implementation of the
  restructuring plan more fully described in Item 1 above was for
  the purpose of providing a means to acquire and operate businesses
  in a corporate structure that would not be subject to any
  asbestos-related or other liabilities of Raymark.
  
       Prior to the formation of Raytech, Raymark was first sued in
  an asbestos-related claim in 1971 and has since been named as a
  defendant in more than 88,000 lawsuits in which substantial
  damages have been sought for injury or death from exposure to
  airborne asbestos fibers.  More than 35,000 of such lawsuits were
  disposed of by settlements, dismissals, summary judgments and
  trial verdicts at a cost in excess of $333 million principally
  covered by Raymark's insurance.  Subsequent to the sale of Raymark
  in 1988, lawsuits continued to be filed against Raymark at the
  rate of approximately 1,000 per month until an involuntary
  petition in bankruptcy was filed against Raymark in February 1989
  which stayed all its litigation.  In August 1996, the involuntary
  petition filed against Raymark was dismissed following a trial and
  the stay was lifted.
  
       Despite the restructuring plan implementation and subsequent
  divestiture of Raymark, Raytech was named a co-defendant with
  Raymark and other named defendants in approximately 3,300
  asbestos-related lawsuits as a successor in liability to Raymark. 
  Until February 1989, the defense of all such lawsuits was provided
  to Raytech by Raymark in accordance with the indemnification
  agreement included as a condition of the purchase of the Wet
  Clutch and Brake Division and German subsidiary from Raymark in
  1987.  However, subsequent to the involuntary bankruptcy
  proceedings against Raymark, a restrictive funding order was
  issued by an Illinois Circuit Court which required one of
  Raymark's insurance carriers to pay claims but not defense costs
  and another insurance carrier has been declared insolvent.  These
  circumstances caused Raymark to be unable to fund the costs of
  defense to Raytech under its indemnification agreement.  Raytech
  management was informed that Raymark's cost of defense and
  disposition of cases up to the automatic stay of litigation under
  the involuntary bankruptcy proceedings was approximately $333
  million of Raymark's total insurance coverage of approximately
  $395 million.  It has also been informed that as a result of the
  dismissal of the involuntary petition, Raymark has encountered
  pending and newly filed asbestos-related lawsuits but has received
  $27 million from a state guarantee association to make up the
  insurance policies of the insolvent carrier and  $32 million in
  other policies to defend against such litigation.
<PAGE>
  
      In October 1988, in a case captioned Raymond A. Schmoll v.
  ACands, Inc., et al., the U.S. District Court for the District of
  Oregon ruled, under Oregon equity law, Raytech to be a successor
  to Raymark's asbestos-related liability.  In this case the
  liability was negotiated to settlement for a negligible amount. 
  The successor decision was appealed and in October 1992, the Ninth
  Circuit Court of Appeals affirmed the District Court's judgment on
  the grounds stated in the District Court's opinion.  The effect of
  this decision extends beyond the Oregon District due to a Third
  Circuit Court of Appeals decision in a related case cited below
  wherein Raytech was collaterally estopped (precluded) from
  relitigating the issue of its successor liability for Raymark's
  asbestos-related liabilities. 
  
       As the result of the inability of Raymark to fund Raytech's
  cost of defense recited above, and in order to obtain a ruling
  binding across all jurisdictions on whether Raytech is liable as a
  successor for asbestos-related and other claims including claims
  yet to be filed relating to the operations of Raymark or Raymark's
  predecessors, on March 10, 1989 Raytech filed a petition seeking
  relief under Chapter 11 of Title 11, United States Code in the
  United States Bankruptcy Court, District of Connecticut.  Under
  Chapter 11, substantially all litigation against Raytech has been
  stayed while the debtor corporation and its non-filing operating
  subsidiaries continue to operate their businesses in the ordinary
  course under the same management and without disruption to
  employees, customers or suppliers.  In the Bankruptcy Court a
  creditors' committee was appointed, comprised primarily of
  asbestos claimants' attorneys.  In August 1995, an official
  committee of equity security holders was appointed for a limited
  time relating to a determination of equity security holders'
  interest in the estate.
  
       Since the bankruptcy filing, several entities have asserted
  claims in Bankruptcy Court alleging environmental  liabilities of
  Raymark based upon similar theories of successor liability against
  Raytech as alleged by asbestos claimants.  These claims are not
  covered by the class action referenced below and will be resolved
  in the bankruptcy case.  The environmental claims include a claim
  of the Pennsylvania Department of Environmental Resources ("DER")
  to perform certain activities in connection with Raymark's
  Pennsylvania manufacturing facility, which includes submission of
  an acceptable closure plan for a landfill containing hazardous
  waste products located at the facility and removal of accumulated
  baghouse dust from its operations.  In March 1991, the Company
  entered a Consent Order which required Raymark to submit a revised
  closure plan which provides for the management and removal of
  hazardous waste, for investigating, treatment and monitoring of
  any contaminated groundwater and for the protection of human
  health and environment at the site, all relating to the closure of
  the Pennsylvania landfill and to pay a nominal civil penalty.  The
  estimated cost for Raymark to comply with the order is $1.2
  <PAGE>
  million.  The DER has reserved its right to reinstitute an action
  against the Company and the other parties to the DER order in the
  event Raymark fails to comply with its obligations under the
  Consent Order.  Another environmental claim was filed against the
  Company by the U.S. Environmental Protection Agency for civil
  penalties charged Raymark in the amount of $12 million arising out
  of alleged Resource Conservation and Recovery Act violations at
  Raymark's Stratford, Connecticut, manufacturing facility.  
  
       It is possible that additional claims for reimbursement of
  environmental cleanup costs related to Raymark facilities may be
  asserted against Raytech, as successor in liability to Raymark. 
  In January 1997, the U.S. Environmental Protection Agency ("EPA")
  and the State of Connecticut filed suit against Raymark claiming
  $212 million in damages for cleanup of the Stratford, Connecticut,
  site.  The EPA has also filed a bankruptcy claim against Raytech
  as a successor to Raymark for cleanup of the Stratford site and
  other Raymark sites.  Determination of Raytech's liability for
  such claims, if any, is subject to Bankruptcy Court deliberations
  and proceedings.
  
       In April 1996, the Indiana Department of Environmental
  Management ("IDEM") advised Raybestos Products Company ("RPC"), a
  wholly-owned subsidiary of the Company, that it may have
  contributed to the release of lead and PCB's (polychlorinated
  biphenyls) found in small waterways near its Indiana facility.  In
  June, IDEM named RPC as a potentially responsible party ("PRP"). 
  RPC notified its insurers of the IDEM action and one insurer
  responded by filing a complaint in January 1997 in the U.S.
  District Court, Southern District of Indiana, captioned Reliance
  Insurance Company vs. RPC seeking a declaratory judgment that any
  liability of RPC is excluded from its policy with RPC.  RPC
  continues to assess the extent of the contamination and its
  involvement and is currently negotiating with IDEM for an agreed
  order of cleanup.  The Company intends to offset its investigation
  and cleanup costs against its notes payable to Raymark when such
  costs become known pursuant to the indemnification clause in the
  wet clutch and brake acquisition agreement since it appears that
  any contamination would have occurred during Raymark's ownership
  of the Indiana facility.  Blood tests administered to residents in
  the vicinity of the small waterways revealed no exposure.
  
       As a result of an inspection, the Company has been notified
  that the operations purchased from AFM in January 1996 in Sterling
  Heights, Michigan, are in violation of a consent order issued by
  the Michigan Department of Environmental Quality ("DEQ").  The
  consent order included a compliance program providing for measures
  to be taken to bring certain operations into compliance and
  recordkeeping on operations in compliance.  Potential fines for
  the violations could be as high as $4.6 million; however, the
  Company is in negotiations with the DEQ and believes it will resolve 
  <PAGE>
  the matter for substantially less.  The Company is working diligently
  to get its operations in compliance.
  
       Under bankruptcy rules, the debtor-in-possession has an
  exclusive period in which to file a reorganization plan.  Such
  exclusive period had been extended by the Bankruptcy Court pending
  the conclusion of the successor liability litigation.  However, in
  December 1992, the creditors' committee filed a motion to
  terminate the exclusive period to file a plan of reorganization. 
  At a hearing in May 1993, the motion was denied by the Bankruptcy
  Court but was appealed by the creditors' committee.  In November
  1993, the U.S. District Court reversed the Bankruptcy Court and
  terminated the exclusive period to file a plan of reorganization
  effective in January 1994.  Accordingly, any party in interest,
  including the debtor, the creditors' committee or a creditor could
  thereafter file a plan of reorganization.  
  
       In May 1994, Raytech filed a Plan of Reorganization
  ("Debtor's Plan") in the U.S. Bankruptcy Court for the purpose of
  seeking confirmation allowing Raytech to emerge from the
  bankruptcy filed March 10, 1989.  Important conditions precedent
  to confirmation of the Debtor's Plan include a final judgment in
  the litigation to determine whether Raytech is a successor to the
  liabilities of Raymark and a resolution of the environmental
  claims or other claims filed or to be filed by governmental
  agencies.  The Debtor's Plan provides that in the event Raytech is
  found to be a successor, it is to establish a successor trust
  funded by an amount determined to be the difference between what
  Raytech should have paid for the businesses purchased from Raymark
  less the amount actually paid and less amounts to be paid for
  environmental and other claims.  This remedy would satisfy its
  obligations as a successor in full and render all claimants
  unimpaired, thereby eliminating the need for balloting and all
  equity shareholders would retain their interests in full.  Raytech
  believes the Debtor's Plan to be confirmable.  In September 1994,
  the Creditors' Committee filed its own Plan of Reorganization in
  competition to the Debtor's Plan ("Creditors' Plan").  The
  Creditors' Plan calls for the elimination of Raytech Corporation
  and its stockholders to be replaced with a new Raytech.  All of
  the stock of new Raytech would then be distributed to unsecured
  claimants, environmental claimants and both past and future
  asbestos disease claimants on a formulated basis set forth in the
  Plan.  Current stockholders of Raytech would receive nothing under
  the Plan.  Raytech believes the Creditors' Plan is unconfirmable
  and will vigorously contest attempts to have it confirmed while it
  continues to try to get the Debtor's Plan confirmed.  Upon motion
  of the parties and support of the Bankruptcy Court, the major
  interested parties agreed in August 1995 to participate in non-
  binding mediation to attempt to effectuate a consensual plan of
  reorganization.  The mediation process commenced in October 1995
  and was concluded in March 1996 without agreement for a consensual
  <PAGE>
  plan of reorganization.  The competing plans of Raytech and its
  creditors will now return to Bankruptcy Court procedures.  The
  outcome of these matters is expected to take considerable time and
  is uncertain.  If an adverse plan is confirmed, it would have a
  material adverse impact on Raytech and its stockholders.
  
       Other matters in the Bankruptcy Court include:  (1) In April
  1996, the creditors' committee filed a motion for appointment of a
  trustee based upon alleged breaches of the Company's fiduciary
  obligations to its creditors.  The Company will resist the motion
  when heard; however, the motion has been continued without a
  further hearing date set.  (2) In September, Raytech filed a
  motion to dismiss its bankruptcy petition for the reason that
  Raymark appears to again be capable of providing indemnity to
  claims pending and that may be filed against Raytech.  The said
  motion to dismiss has been continued by the Court without a
  further hearing date set.  (3) The process for confirmation of a
  reorganization plan was begun in November 1996 with arguments
  being presented for a bar date and claim forms.  The process has
  been continued indefinitely pending the completion of other
  matters before the Bankruptcy Court.  (4) In November 1996,
  Raytech filed an adversary proceeding complaint against the
  creditors' committee, et al., seeking a declaratory judgment of
  the Bankruptcy Court that Raytech's liability to present and
  future creditors of Raymark under the theory of successor
  liability is limited pursuant to bankruptcy law.  Scheduling of
  the proceedings is presently being considered by the Court.  (5)
  In January 1997, the creditors' committee filed a motion for leave
  to file an adverse proceeding complaint against Raymark, et al.
  seeking to have the Raytech Bankruptcy Court assert control over
  Raymark and its assets on the grounds that the reorganization of
  Raytech in 1986 and the corporate transfers to Raymark in 1988
  were fraudulent.  The motion was continued without a further
  hearing date set.  (6) In March 1997, the creditors' committee
  filed a motion for relief from the automatic stay to permit the
  commencement of an adversary proceeding against Raytech to
  litigate alternative theories of liability bearing upon the extent
  to which Raytech may be liable to Raymark's creditors.  The motion
  is awaiting a date for hearing.
   
       In June 1989 Raytech filed a class action in the Bankruptcy
  Court captioned Raytech v. Earl White, et al. against all present
  and future asbestos claimants seeking a declaratory judgment that
  it not be held liable for the asbestos-related liabilities of
  Raymark.  It was the desire of Raytech to have this case heard in
  the U.S. District Court, and since the authority of the Bankruptcy
  Court is referred from the U.S. District Court, upon its motion
  and argument the U.S. District Court withdrew its reference of the
  case to the Bankruptcy Court and thereby agreed to hear and decide
  the case.  In September 1991, the U.S. District Court issued a
  ruling dismissing one count of the class action citing as a reason
  the preclusive effect of the 1988 Schmoll case recited above under
  <PAGE>
  the doctrine of collateral estoppel (conclusiveness of judgment in
  a prior action), in which Raytech was ruled to be a successor to
  Raymark's asbestos liability under Oregon law.  The remaining
  counts before the U.S. District Court involve the transfer of
  Raymark's asbestos-related liabilities to Raytech on the legal
  theories of alter-ego and fraudulent conveyance.  Upon a motion
  for reconsideration, the U.S. District Court affirmed its prior
  ruling in February 1992.  Also, in February 1992, the U.S.
  District Court transferred the case in its entirety to the U.S.
  District Court for the Eastern District of Pennsylvania.  Such
  transfer was made by the U.S. District Court without motion from
  any party in the interest of the administration of justice as
  stated by the U.S. District Court.  In December 1992, Raytech
  filed a motion to activate the case and to obtain rulings on the
  remaining counts, which was denied by the U.S. District Court.  In
  October 1993, the creditors' committee asked the Court to certify
  the previous dismissal of the successor liability count.  In
  February 1994, the U.S. District Court granted the motion to
  certify, and the successor liability dismissal was accordingly
  appealed.  In May 1995, the Third Circuit Court of Appeals ruled
  that Raytech is collaterally estopped (precluded) from
  relitigating the issue of its successor liability as ruled in the
  1988 Oregon case recited above, affirming the U.S. District
  Court's ruling of dismissal.  A petition for a writ of certiorari
  was denied by the U.S. Supreme Court in October 1995.  The ruling
  leaves the Oregon case, as affirmed by the Ninth Circuit Court of
  Appeals, as the prevailing decision holding Raytech to be a
  successor to Raymark's asbestos-related liabilities.
  
       Costs incurred by the Company for asbestos related
  liabilities are indemnified by Raymark under the 1987 acquisition
  agreements.  By agreement, Raymark has reimbursed the Company in
  part for such indemnified costs by payment of the amounts due in
  Raytech common stock of equivalent value.  Under such agreement,
  Raytech received 926,821 shares in 1989, 177,570 shares in 1990,
  163,303 in 1991 and 80,000 shares in 1993.  The Company's
  acceptance of its own stock was based upon an intent to control
  dilution of its outstanding stock.  In 1992, the indemnified costs
  were reimbursed by offsetting certain payments due Raymark from
  the Company under the 1987 acquisition agreements.  Costs incurred
  in 1994, 1995 and 1996 were applied as a reduction of the note
  obligations pursuant to the agreements.
  
       In February 1994, a jury in a case in the U.S. District Court
  for the Southern District of Indiana captioned Raybestos Products
  Company vs. Gilbert W. Younger, et al. returned a verdict in favor
  of Raybestos Products Company ("RPC"), a wholly-owned subsidiary
  of the Company, for $2.9 million plus costs and against Gilbert W.
  Younger and Transgo, a corporation.  RPC had sued the defendants
  in 1990 for defamation of products and injurious falsehoods
  concerning RPC's manufactured products.  In April 1994, the Court
  granted RPC its costs, attorneys' fees and interest in addition to
  the damages awarded by the jury.  The defendants filed for
  <PAGE>
  bankruptcy under Chapter 11 in 1992 and the defendant's plan of
  reorganization was confirmed in September 1994 by a California
  Bankruptcy Court.  Under the plan of reorganization and ordered by
  the Court, the total amount of the awarded damages had been placed
  in a secured escrow account pending appeals.  In April 1995, the
  Seventh Circuit Court of Appeals affirmed the verdict except for
  the award of prejudgment interest.  In June 1995, RPC received the
  awarded damages, including post-judgment interest, in the amount
  of $4.6 million, bringing the case to a final conclusion.
  
       In January 1997, Raytech was named through a subsidiary in a
  third party complaint captioned Martin Dembinski, et al. vs.
  Farrell Lines, Inc., et al. vs. American Stevedoring, Ltd., et al.
  filed in the U.S. District Court for the Southern District of New
  York for damages for asbestos-related disease.  The case has been
  removed to the U.S. District Court, Eastern District of
  Pennsylvania.  When required the Company will deny the allegations
  and will vigorously defend itself against the claims made. 
  Discovery procedures have not yet begun.
  
       The adverse ruling in the Third Circuit Court of Appeals of
  which a petition for writ of certiorari was denied by the U.S.
  Supreme Court, precluding Raytech from relitigating the issue of
  its successor liability leaves the U.S. District Court's (Oregon)
  1988 ruling as the prevailing decision holding Raytech to be a
  successor to Raymark's asbestos-related liabilities.  This ruling
  could have a material adverse impact on Raytech as it does not
  have the resources needed to fund Raymark's potentially
  substantial uninsured asbestos-related and environmental
  liabilities.  Determination of Raytech's actual liabilities are
  subject to the Bankruptcy Court's deliberations and rulings and
  the competing plans of reorganization filed in the Bankruptcy
  Court referenced above.
  
       The ultimate liability of the Company with respect to
  asbestos-related, environmental, or other claims cannot presently
  be determined.  Accordingly, no provision for such liability has
  been recorded in the financial statements.  The accompanying
  financial statements have been prepared assuming that the Company
  will continue as a going concern.  An unfavorable result on
  certain or all of the matters described above would have a
  material adverse effect on the Company's results of operations, 
  financial position and cash flows.  These uncertainties raise
  substantial doubt about the Company's ability to continue as a
  going concern.  The financial statements do not include any
  adjustments relating to the recoverability and classification of
  recorded asset amounts or adjustments relating to establishment,
  settlement and classification of liabilities that may be required
  in connection with reorganizing under the Bankruptcy Code.
  
  
  
    <PAGE>
  ITEM 6(a).  EXHIBITS
  
     (11)   Statement re. Computation of Per Share Earnings
  
  
  ITEM 6(b).  REPORTS ON 8-K
  
              None
    <PAGE>
  
                            SIGNATURE 
           
  
          Pursuant to the requirements of the Securities Exchange
  Act of 1934, the Registrant has duly caused this Report to be
  signed on its behalf by the undersigned thereunto duly authorized.
  
                                   RAYTECH CORPORATION
  
  
                                    By: /s/ALBERT A. CANOSA      
                                        Albert A. Canosa
                                        Vice President of
                                        Administration, Treasurer
                                        and Chief Financial Officer
  
  Date: May 9, 1997