Raymond Ltd (RAYMOND) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, you have been connected to the Raymond Limited Earnings Conference Call. Please stay connected, the conference will begin shortly.
Moderator: Ladies and gentlemen, good day, and welcome to Raymond Limited Q2 and H1 FY27 Earnings Conference Call, hosted by Anand Rathi. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions
Moderator: after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touch-tone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Manish. Thank you and over to you, sir.
Manish (Anand Rathi): Thank you. On behalf of Anand Rathi, I would like to welcome all the participants to the Q2Q and H1 FY27 conference call of Raymond Limited. Today we have with us from the senior management of Raymond, Mr. Rakesh Tiwary, Group CFO, Mr. Gautam Maini, MD, JKMGAL and VC, JKMPTL, Mr. Sanjeev Sharma, Joint MD and CEO, JKMPTL, Mr. Naveen Sharma, CFO, Engineering Business, and Mr. Jaleel Bawa, Group Head, Investor Relations. Without taking further time, I would like to now hand over the call to Mr. Gautam Maini. Over to you, Mr. Maini.
Gautam Maini (Raymond Ltd): Thank you, Manish. Good evening, everyone. Thank you for joining us today for our Q2 and H1 FY '27 earnings call. I trust you've had the opportunity to review our financial results and investor presentation. To set the context, the broader macroeconomic environment through the second quarter demonstrated solid domestic resilience. Strong manufacturing activity, healthy GST collections and active pre-festive channel channel restocking helped anchor domestic demand. At the same time, the increase in costs on several areas continued to pose challenges. Key commodity and raw material prices, including tool costs, have remained firm at elevated levels alongside persistent freight and logistics were what volatility driven by global geopolitical tensions. Disciplined CapEx execution and flexible supply chains have kept our core operational trajectory steady and on track. Turning to our automotive and industrial components business, the sector saw healthy operational deliveries through the second quarter. In the domestic market, demand was supported by steady pre-festive channel restocking across passenger vehicles and premium two-wheelers. On the export front, the momentum shifted from post-destocking replenishment into steady multiyear production schedules. As global Tier 1 OEMs and tier suppliers continue to derisk cross-border supply chains and consolidate their vendor base, India remains a primary beneficiary. We are seeing this reflected in strong customer inquiries and order wins for complex precision-machined parts and drivetrain subassemblies. Turning to aerospace, the global industry continues to see steady production acceleration, with major commercial airframers ramping up monthly build rates against historical order backlogs. As supply chain bottlenecks in specialty alloy availability gradually stabilize, we are experiencing firm production pulls across all flagship platforms. Tier 1 integrators have shifted from holding buffer inventory to steady, just-in-time dispatches. This has translated into healthy dispatch volumes across our aero engine modules, actuation systems and critical structural components. More importantly, shipset value per aircraft continues to expand as our customers entrust us with larger integrated subassemblies rather than standalone machined parts. With rigorous AS9100 and Nadcap qualifications, high single-source part approvals and substantial switching costs, our aerospace vertical enjoys strong structural moats. This locks in long life cycle program visibility and healthy margin as we move into the second half of the fiscal year. Moving to our consolidated financial performance, Raymond Limited delivered a resilient performance during the second quarter, driven by steady execution across our core precision engineering and aerospace platforms. For Q2 FY '27, total income stood at INR 683 crores, registering a growth of 21% year-on-year. EBITDA reached 103 crores with an EBITDA margin of 15.1%. On a cumulative basis for the first half of FY '27, total income was 1,311 crores, registering a growth of 17% year-on-year, and EBITDA stood at 203 crores INR with an EBITDA margin of 15.5%. This performance reflects our deliberate transition from standard component manufacturing into high-complexity subsystems and critical precision assemblies.
Gautam Maini (Raymond Ltd): Securing long term revenue visibility. In line with our strategy to diversify revenue streams, we officially operationalized our automotive aftermarket business during the quarter. By leveraging our established OEM grade manufacturing capabilities and tooling infrastructure, this initiative positions us to capture attractive aftermarket margins across critical components and white label products. Overall, we remain well positioned to maintain this growth trajectory as we expand into new products applications and broaden our geographical footprint. Now turning to our individual business segments starting with aerospace under JK Maini Global Aerospace Limited. The aerospace and defense vertical delivered another quarter of stand-out performance. Revenue for Q2 FY27 stood at 193 crores INR, up 72% year-on-year, while EBITDA reached INR 29 crores delivering an EBITDA margin of 21%. For the 6-month period, revenue was INR 262 crores, reflecting a 56% growth with an EBITDA margin of 21.1%. Growth during the quarter was underpinned by the commercial ramp-up of our newly commissioned capacities, enabling higher dispatch volumes across flagship OEM and Tier 1 engine platforms. Operational indicators remain exceptionally healthy, highlighted by active RFQ inflows and expanding program allocations. Moving next to precision technology and auto components under JK Maini Precision Technology Limited, the segment delivered robust revenue growth of 15% year-on-year in Q2 FY27, reaching INR 471 crores compared to INR 409 crores in Q2 of FY26. EBITDA for the quarter stood at INR 61 crores translating into a healthy EBITDA margin of 13%, supported by steady volume ramp-up and targeted cost optimization initiatives. On a cumulative 6-month basis, performance was strong across both top line and profitability. H1 FY27 revenue reached INR 915 crores, up 13% year-on-year, while EBITDA grew by 24% to INR 122 crores. This drove a 110 basis points expansion in EBITDA margin to 13.4% up from 12.3% in H1 of FY26, driven by higher capacity utilization, and enriched product mix, and enhanced operating leverage. Growth during the quarter was anchored by steady domestic run run traction and sustained export deliveries against long-term OEM schedules. We continue to remain a net debt-free business. Turning to our strategic manufacturing expansion across Andhra Pradesh, our greenfield facility in Andhra Pradesh is tracking strictly to plan, designed to significantly expand our national production footprint and technical capabilities. Construction and setup milestones remain well on schedule to achieve output by the third quarter of financial year '28. Backed by an upgraded leadership and governance structure, this state-of-the-art infrastructure will serve as a cornerstone for scaling volumes across complex aerospace and precision engineering programs. We have set up an additional brownfield facility as an interim capacity augmentation initiative which is also serving as a training ground for both aerospace and precision technology segments. This decision to accelerate brownfield capacity in addition reflects the company's focus on responding swiftly to customer demand while maintaining capital and execution discipline. Thank you, once again, for your continued interest in Raymond. We are now happy to take your questions.
Moderator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: Anyone who wishes to ask a question, may press star and one on their touchtone telephone. The first question is from the line of Dheeraj from InCred Equity. Please go ahead.
Dheeraj (InCred Equity): Congratulations on the great set of results. I just had a few couple questions regarding some things that we go. Like we have seen that in the current facility that we have in Bangalore, the maximum, sorry, the maximum revenue potential that we could do in the aerospace segment was, I think, around 600 to 650 Cr. And I think we have plans of doing you know, debottlenecking, that sort of thing to kind of increase that potential. And also we have now committed that from this Q3 onwards, we will have a brownfield capacity in Andhra that will help in the ramping up of revenues from here on. So, can you like let me know why, has there been any kind of upgrade in the facilities and what will be the revenue potential of the new brownfield capacity?
Gautam Maini (Raymond Ltd): Thank you very much. Yes. You were right. In the past, we did give an indication of 600 to 650 crores, but since then, we have actually added several more machines and other equipments that are necessary, that will be able to drive the turnover to a higher level. We are currently looking at a number of closer to 700, and we're still working hard to see if that can go to 750. So, our ultimate goal would be to try and get it to 750, but we have we will probably end up somewhere between 700 and 750. So, this gives us a little bit more time till Andhra comes up, so that the growth can continue.
Dheeraj (InCred Equity): Okay. And this is the current facility from like of Bangalore. Any idea about the brownfield capacity that we are adding?
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