Raymond

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.

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.

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.

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.

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.

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.