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    Jyoti CNC Auto.

    JYOTICNCGood
    Capital Goods·7 Aug 2025
    Management Summary

    Jyoti CNC delivered a strong start to FY26, characterized by significant PAT growth and a massive order book that provides multi-year visibility. While EBITDA margins saw a slight compression due to proactive hiring for upcoming capacity, the company's expansion into high-margin segments like Aerospace and EMS continues to drive gross margin improvement. Management remains focused on execution and capacity ramp-up to meet the high demand, particularly in the Southern India EMS cluster and European defense markets.

    Highlights

    8

    • Consolidated revenue grew 13.4% YoY to ₹410 crores, despite Q1 being a seasonally soft period.

    • Order book remains robust at ₹4,412 crores, with a significant 39% contribution from Aerospace & Defence.

    • Gross margins expanded by 270 bps YoY to 55.9%, driven by a favorable product mix.

    • Profit After Tax (PAT) surged 40.2% YoY to ₹71.2 crores, with PAT margins improving to 17.4%.

    • Capacity expansion to 10,000 machines per year is on track for completion by September 2026.

    • Board approved the purchase of 20 acres of land in Karnataka to set up support and tech centers for the EMS cluster.

    • EBITDA margin stood at 24.4%, slightly impacted by a ₹15 crore increase in employee costs for future capacity readiness.

    • Working capital cycle improved to 175 days, with a target to reach 150-160 days within the current fiscal year.

    What Changed1

    vs Q2 FY26

    Guidance items5 → 4 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹410 Cr+13.4%YoY
    2. 02EBITDA Margin24.4%
    3. 03PAT₹71.2 Cr+40.2%YoY
    4. 04Order Book₹4,412 Cr
    5. 05Order Intake₹451 Cr

    Segment breakdown

    Auto & Auto ComponentsAerospace & DefenceGeneral Engineering
    Industry-wise Revenue Split36%30%26%
    Order Book Breakup17%39%19%
    Heatmap· 3 shared metrics

    Guidance & targets

    4
    CategoryTargetPriority
    Capacity
    Annual Machine Manufacturing Capacity
    10,000 machines
    		High
    Capex
    Total Organic Capex
    ₹400-450 crores
    		High
    Debt
    Working Capital Cycle
    150-160 days
    		Medium
    Volume
    Capacity Utilization
    90%
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Execution and Skill Base Risk

    High-precision manufacturing requires a skilled workforce; management cited the need to impact the skill base first as they increase team size. — Management acknowledged

    medium

    Geopolitical and Tariff Uncertainty

    Potential US tariffs and global trade issues are being monitored, though management believes their manufacturing presence in France (Huron) provides a hedge. — Both acknowledged

    medium

    Seasonality of Order Activity

    Q1 is historically soft due to customer budget cycles; business typically sees a much stronger second half (40-60 split). — Management acknowledged

    low

    Areas of Evasion(2)

    • Specific revenue guidance for FY26
    • Exact capex breakdown for the new Karnataka land

    Q&A highlights

    3

    “And almost INR15 crores of additional the manpower cost we have incurred from last year first quarter to this year first quarter... we are on a track to maintain on an EBITDA level.”

    Explains that the margin dip was a deliberate investment in human capital to support the upcoming capacity jump from 6,000 to 10,000 machines.

    asked by Kamlesh Bagmar

    2 min read5 chapters

    Detailed Narrative

    01

    Massive Order Book Underpins Growth Visibility

    Jyoti CNC's order book stands at a record ₹4,412 crores, representing a significant multiple of its annual revenue. The mix is increasingly shifting toward high-value segments, with Aerospace and Defence now making up 39% of the total book. Management noted that the order intake in Q1 FY26 was ₹451 crores, showing steady demand even in a seasonally soft quarter.

    02

    Strategic Capacity Expansion to 10,000 Machines

    The company is aggressively expanding its manufacturing capacity from 6,000 to 10,000 machines per year, with completion targeted for September 2026. This expansion is backed by a planned organic capex of ₹400-450 crores, funded through internal accruals and debt. Current utilization is at 75%, but management expects to hit 90% by the end of the current fiscal year as they ramp up execution.

    03

    Margin Dynamics: Gross Expansion vs. EBITDA Investment

    Gross margins improved to 55.9% due to a better product mix, particularly from high-end machines which command margins of 55-57%. However, EBITDA margins were 24.4%, a slight dip from the previous year's 26%. This was attributed to a ₹15 crore increase in employee costs as the company hires and trains manpower in advance of the new capacity coming online.

    04

    Huron Integration and Global Market Strategy

    The Huron facility in France is now fully operational after expansion delays, with assembly starting in September. This facility is crucial for the European Aerospace and Defence market, where Huron already has a strong client base. Additionally, the company is setting up sales and service networks in the US and China to capture global demand while maintaining India as a cost-competitive manufacturing hub.

    05

    Focus on EMS and Southern India Cluster

    The Board's approval to purchase 20 acres in Karnataka for ₹20 crores marks a strategic move to be closer to the Electronic Manufacturing Services (EMS) cluster. EMS now accounts for 16% of the order book. Management believes that being physically closer to these customers for service and support will help them capture a larger wallet share in this fast-growing segment.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.