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    Raymond

    RAYMONDGood
    Realty·7 Aug 2025
    Management Summary

    Raymond Limited reported a steady Q1 FY26 performance with consolidated total income growing 11% year-over-year to INR555 crores, though EBITDA declined to INR87 crores, resulting in a margin of 15.7%. The engineering business restructuring was completed, forming two new subsidiaries: JK Maini Global Aerospace Limited and JK Maini Precision Technology Limited. Both segments demonstrated robust growth, with Aerospace & Defence revenue up 37% and Precision Technology & Auto Components revenue up 12% YoY, driven by strategic partnerships and market traction.

    Highlights

    8
    • Consolidated Total Income for Q1 FY26 was INR555 crores, up 11% YoY from INR500 crores in Q1 FY25.

    • Consolidated EBITDA for Q1 FY26 was INR87 crores, down 8.4% YoY from INR95 crores in Q1 FY25.

    • Consolidated EBITDA Margin for Q1 FY26 was 15.7%, down from 18.9% in Q1 FY25.

    • Aerospace & Defence segment revenue grew 37% YoY to INR87 crores in Q1 FY26.

    • Aerospace & Defence segment EBITDA grew 30% YoY to INR21 crores in Q1 FY26.

    • Precision Technology & Auto Components segment revenue grew 12% YoY to INR398 crores in Q1 FY26.

    • Precision Technology & Auto Components segment EBITDA grew 8% YoY to INR42 crores in Q1 FY26.

    • The company maintained a net cash surplus of INR157 crores as of June 30, 2025.

    Concerns

    1
    • Emerging protectionist tariff trends in some export markets.

    What Changed1

    vs Q2 FY26

    Guidance items3 → 7 (+4)

    Key financials

    Single quarter

    06 metrics
    1. 01Total Income₹555 Cr+11%YoY
    2. 02EBITDA₹87 Cr-8.4%YoY
    3. 03EBITDA Margin15.7%
    4. 04Net Cash Surplus₹157 Cr
    5. 05Gross Debt₹965 Cr

    Segment breakdown

    • Aerospace & Defence (JKMGAL)₹87 Cr17.9%
    • Precision Technology & Auto Components (JKMPTL)₹398 Cr82.1%
    Donut· Share of Revenue

    Guidance & targets

    7
    CategoryTargetPriority
    Aerospace Growth
    Aerospace business doubling
    double
    High
    Aerospace Growth
    Aerospace revenue growth
    high-teen growth
    Medium
    Industrial Growth
    Industrial business revenue growth
    early teens growth
    Medium
    Aerospace Profitability
    Aerospace EBITDA Margin
    around 25%
    High
    Auto Components Profitability
    Auto components EBIT Margin
    double digits
    Medium
    Return on Capital Employed (ROCE)
    Operational ROCE
    20-plus percent
    High
    Automotive Growth
    Automotive business growth
    low to mid-teens
    Medium

    Risks & concerns

    4
    RiskSeverity

    Emerging protectionist tariff trends in some export markets.

    Could present headwinds for subsystem and component suppliers; specifically, US tariffs are dynamic and could impact business.Management acknowledged

    high

    Cautious global automotive environment and subdued sentiment.

    Affects both passenger and commercial segments, potentially impacting auto component demand.Management acknowledged

    medium

    Supply chain disruptions and logistical hurdles from a heavy monsoon season.

    Could temper CV sector growth despite strong government capital expenditure.Management acknowledged

    low

    Complex legacy holding structure leading to potential large tax incidence for simplification.

    Prevents unlocking value from the current structure despite clear operating businesses.Both acknowledged

    medium

    Q&A highlights

    3

    “I think it is such a situation with the U.S. tariff that by every hour, you have a new information... So, we are look, we are not making any knee-jerk reaction. I think it is very simple. Maybe there is a couple of weeks here and there delay. But over time, these things would settle down.”

    Addresses a significant geopolitical risk and management's strategy to handle it, indicating a wait-and-watch approach rather than knee-jerk reactions.

    asked by Pushpender Jindal

    3 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Consolidated Performance Overview

    Raymond Limited reported a total income of INR555 crores for Q1 FY26, marking an 11% year-over-year growth from INR500 crores in Q1 FY25. However, consolidated EBITDA for the quarter stood at INR87 crores, a decrease from INR95 crores in the prior year, leading to an EBITDA margin of 15.7% compared to 18.9% in Q1 FY25. This performance reflects enhanced operational execution and business integration synergies.

    02

    Engineering Business Restructuring and New Subsidiaries

    The company successfully completed the restructuring of its engineering business, with the NCLT order received on July 4, 2025, and the scheme effective from August 1, 2025. This led to the creation of two new subsidiaries: JK Maini Precision Technology Limited (JKMPTL), focusing on precision engineering, auto components, and engineering consumables, and JK Maini Global Aerospace Limited (JKMGAL), dedicated to aerospace and defence. This milestone aims to drive operational focus and long-term value creation.

    03

    Aerospace & Defence Segment Highlights (JKMGAL)

    The Aerospace & Defence business demonstrated robust growth, with revenue increasing 37% year-on-year to INR87 crores in Q1 FY26, up from INR64 crores in Q1 FY25. EBITDA for the segment grew 30% YoY to INR21 crores, maintaining a strong EBITDA margin of 23.7%. The company signed a Memorandum of Understanding with Safran Aircraft Engines and a long-term supply agreement with Pratt & Whitney, underscoring its growing footprint in the critical aerospace sector. Management expects this business to double in the next 3-4 years and achieve EBITDA margins of around 25% in the next two years.

    04

    Precision Technology & Auto Components Segment Highlights (JKMPTL)

    The Precision Technology & Auto Components segment reported a revenue of INR398 crores in Q1 FY26, a 12% year-on-year growth from INR355 crores. EBITDA for this segment was INR42 crores, an 8% YoY growth, with an EBITDA margin of 10.6%. This segment is benefiting from China Plus sourcing tailwinds, integration synergies, and strong international and domestic demand, particularly in EV, hybrid, and motion control segments. The company aims to achieve double-digit EBIT margins in this business within a couple of years.

    05

    Debt and Cash Position

    Raymond Limited continues to operate as a debt-free business, reporting a net cash surplus of INR157 crores as of June 30, 2025. The total gross debt stood at INR965 crores, with cash and cash equivalents at INR1,122 crores. Management indicated that while there is a small debt repayment schedule, the primary focus for the next 3-4 years is to deploy capital back into the business for faster growth, rather than significant debt reduction beyond mandatory repayments.

    06

    Outlook, Growth Strategy, and Macroeconomic Factors

    The company maintains a cautiously optimistic near-term outlook, expecting high-teen growth in aerospace and early teens growth in industrial business for FY26. Strategic initiatives include leveraging the free trade agreement with the UK, increasing indigenization under the Make in India initiative, and exploring new partnership opportunities. However, management acknowledged emerging protectionist tariff trends in some export markets and a cautious global automotive environment as potential headwinds, adopting a 'wait and watch' approach to tariffs.

    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.