Jyoti CNC Automation Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Jyoti CNC delivered a steady Q2 FY26 with strong margin performance and a record order book of ₹4,546 crores. The company is currently operating at high capacity utilization (88%), which acts as a short-term growth constraint until the massive capacity expansion to 16,000 machines is completed in late 2026. Management is aggressively pursuing vertical integration, aiming for a 4-5% margin boost through in-house controller development.

Highlights

  • Consolidated revenue grew 17.9% YoY to ₹508 crores in Q2 FY26

  • EBITDA stood at ₹124.6 crores with a healthy margin of 24.5%

  • Profit After Tax (PAT) increased 13% YoY to ₹85.5 crores

  • Order book remains robust at ₹4,546 crores, with 40% from Aerospace and Defense

  • Order intake for Q2 FY26 was ₹619 crores, driven by Indian defense and global exports

  • Capacity expansion from 6,000 to 16,000 machines per annum on track for September 2026 completion

  • Operating cash flow turned positive at ₹50 crores for H1 FY26 compared to negative ₹100 crores last year

  • Management maintains a long-term growth trajectory guidance of 30-35% CAGR

Concerns

  • Capacity Bottlenecks

Key financials

  1. Revenue ₹508 Cr +17.9%YoY
  2. EBITDA Margin 24.5%
  3. PAT ₹85.5 Cr +13%YoY
  4. Order Book ₹4,546 Cr
  5. Order Inflow ₹619 Cr
  6. Capacity Utilization 88%

What they filed

Q1 FY27: revenue up 36.8%, net profit up 20.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue376 400 529 372 448 +19%530 +33%599 +13%509 +37%
EBITDA95 112 176 99 111 +17%164 +46%191 +9%139 +40%
Net profit70 77 122 72 79 +13%105 +36%135 +11%87 +21%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentAerospace and DefenseAuto and Auto ComponentsGeneral Engineering
Revenue by Industry (Q2)36%26%21%
Order Book by Industry40%17%20%

Guidance & targets

Capacity

  • Production Capacity Capacity · by September 2026 · High confidence 16,000 machines per annum

    From 6,000 machines per annum today

    We are scaling our production capacity from 6,000 machines per annum to 16,000 machines per annum by September '2026.

    — Parakramsinh Jadeja, CMD

Revenue

  • Consolidated Revenue Growth CAGR Revenue · next 3 to 5 years · Medium confidence 30% to 35%
    So, at a consolidated level, we will grow by 30% to 35% for the next three to five years, right? Correct.

    — Parakramsinh Jadeja, CMD

Volume

  • Machine Deliveries Volume · FY27 · High confidence close to 10,000 machines
    Next year, we have already committed to our customers to close to 10,000 machines.

    — Parakramsinh Jadeja, CMD

Margin

  • Gross Margin Increase from HUMA Margin · next 12 to 18 months (prototype) · Medium confidence 4% to 5%
    And we are expecting gross margin to be increased close to a 4% to 5% over there.

    — Parakramsinh Jadeja, CMD

Capex

  • Total Planned Capex Capex · FY26 · High confidence ₹450 crores
    So, CapEx, what we have planned for a total Rs. 450 crores. And I think largely we will finish, let's say, 3-4% we will finish this year itself. Let's say almost 75% to 80% we will reach this year itself.

    — Parakramsinh Jadeja, CMD

Risks & concerns

  • Capacity Bottlenecks

    high

    Current utilization is at 88%, and full expansion won't be operational until September 2026, limiting near-term volume upside.

    Both acknowledged

  • Import Dependency for Critical Components

    medium

    30% of total purchases (CNC controllers, drives, motors, high-precision bearings) are still imported from Germany and Japan.

    Analyst acknowledged

  • Working Capital Intensity

    medium

    Large machines (5-axis) have long cycles (>1 year), leading to significant unbilled revenue and unbilled assets (₹673 crores).

    Analyst acknowledged

Areas of evasion (1)

  • Slightly vague on the exact timeline for semiconductor commercialization, though they gave a 2-year window.

Q&A highlights

3 direct
Growth constraints vs Capacity Utilization Direct
Yes, so that is the only constraint today... we have reached 88% of utilization, and the next two quarters, we will have something a little bit more than our capacity, and we will grow more the capacity over there.

Confirms that the company is hitting a ceiling on current capacity, making the 16,000-machine expansion critical for future growth.

Asked by Harshit Patel, Equirus Securities

Growth Target Realism (15% H1 vs 35% CAGR) Direct
Usually, our tradition into the first half and second half more or less is a 40-60 kind of a ratios are there. So, always the third and fourth quarter is going to be the highest executions.

Explains the seasonality of the business and why management remains confident in high annual growth despite a slower first half.

Asked by Jayesh Shah, OHM Portfolio Equi Research

Order Book Execution Math Direct
Next year, we have already committed to our customers to close to 10,000 machines... I think around in between 8,500-9,000 is definitely we are going to show there.

Provides a concrete volume target for FY27, allowing analysts to model revenue more accurately based on average realizations.

Asked by Depesh Kashyap, Invesco

2 min read 5 chapters

Detailed narrative

Capacity Expansion as the Primary Growth Lever

Jyoti CNC is currently operating at 88% capacity utilization, which management identifies as the primary constraint to immediate growth. To address this, the company is executing a massive expansion from 6,000 to 16,000 machines per annum, expected to be operational by September 2026. For the interim, management expects to stretch utilization to 100%+ in peak quarters (Q4) to meet its 30-35% growth trajectory. The company has already committed to delivering approximately 10,000 machines in the next fiscal year (FY27).

Aerospace and Defense Dominance

The Aerospace and Defense sector has emerged as the largest contributor to both revenue (36%) and the order book (40%). In H1 FY26 alone, the company received ₹425 crores worth of orders from this segment, with ₹180 crores coming specifically from Indian defense entities like ordnance factories. Management noted that geopolitical developments are also driving higher demand from European defense customers, particularly in France and Germany.

Vertical Integration and Margin Expansion

A key strategic focus is increasing in-house value addition, which currently stands at 70%. The company is developing its own 'HUMA' controllers, drives, and motors under the PLI scheme. Management expects a prototype within 12-18 months and anticipates that full integration of these components will boost gross margins by 4% to 5%. Currently, 30% of components, including high-precision bearings and sensors, are still imported from Germany and Japan.

Huron Facility Turnaround

The acquisition of Huron is beginning to yield results, with the facility's production capacity doubling. Revenue conversion from the expanded Huron facility is expected to kick in significantly from Q4 FY26 due to the 4-6 month assembly cycle for high-end machines. Management targets a top-line execution of €70 million to €75 million from Huron, up from the previous €30-32 million level.

Improving Cash Flow Profile

Management highlighted a significant improvement in operating cash flow, which turned positive at ₹50 crores for H1 FY26, a sharp reversal from the negative ₹100 crores recorded in the previous year. This improvement is attributed to better execution and a shift in the product mix. Management expects this positive momentum to continue through the second half of the year, which traditionally accounts for 60% of annual execution.

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