RAYMOND - Raymond Limited Share Price

Management's outlook for Raymond Limited indicates optimism about future growth, primarily driven by expansion strategies in new product categories and geographies. The company reported a total income of INR 613 crores in Q4 FY26, a 2% increase year-on-year. For the full year, total income reached INR 2,312 crores, reflecting a 10% growth from INR 2,105 crores in FY25.

Key forward-looking points highlighted by management include:

1. Aerospace and Defense Growth: The Aerospace & Defense segment achieved revenue of INR 119 crores in Q4 FY26, marking an 11% growth year-on-year. Full-year revenue for this segment was INR 392 crores, up 26% from FY25.

2. EBITDA Performance: Despite a strong operational performance, the overall EBITDA margins faced pressure, declining to 14.5% in FY26 from 15.9% in FY25, attributed to reduced non-operating income.

3. Capital Expenditure Plans: The company plans a substantial INR 930 crores capital expenditure over the next five years, aiming to enhance capacity and meet surging international demand, with INR 500 crores allocated to Aerospace and INR 430 crores to Precision Technology & Auto Components.

4. Strategic Focus: There is a clear commitment to domestic input localization to insulate margins from geopolitical uncertainties, reinforcing the intent to deepen integration into global high-tech supply chains.

5. Record Order Book: Management emphasized a robust order book of INR 2,350 crores in the Aerospace sector, anticipating growth driven by new product developments and customer engagement.

6. Long-term Revenue Stability: The integration of advanced manufacturing systems is expected to enhance project execution times and attract opportunities in both the Aerospace and Auto segments.

Moving forward, management expressed confidence in sustaining growth momentum and achieving strategic ambitions, prioritizing operational efficiencies and cost reduction to maintain profitability amidst market challenges.

Major Questions and Answers from the Q&A Section of Raymond Limited Earnings Transcript (May 5, 2026)

1. Question: In the Aerospace side, we have added 100 plus new SKUs in this year. And what is the R&D expense in this financial year? Are these development costs contractually reimbursable by the customer?
   Answer: Most R&D costs are treated as operational expenses and range from 3% to 5% of total costs; they are written off in the same financial year to support aggressive growth. Some development costs can be reimbursed, particularly for complex projects, but generally, these costs are embedded in the pricing we quote, so we don't separately track them.

2. Question: Out of our current order book, could you share the breakup between LEAP programs, GTF, and others?
   Answer: While I can't provide exact figures for all platforms, we are involved across various engine OEMs globally, both in Europe and the U.S. Our strategy focuses on diversifying and derisking our presence across different aircraft programs, ensuring we are integrated into various segments.

3. Question: Sir, the tariff impact has been reduced from the fifth month onward. How do you see from Q1 onwards?
   Answer: Tariffs have decreased to 18% in automotive, which is better than before, and customers are adapting to the new normal. Business is gradually returning, although challenges persist due to supply chain disruptions from geopolitical issues, so improvement will take some time.

4. Question: We are primarily focused on IC engines, EV hybrid. What components are we currently doing on the EV side, and what are our targets?
   Answer: We manufacture complex assemblies, including transmission gearboxes for hybrids, and key components for hybrid transmissions distributed globally. Our focus remains strong on the hybrid market, which has shown more growth than the EV market in the recent past.

5. Question: You have an order book of INR2,350 crores on the aerospace side. How much can you facilitate from the existing facility, not including the greenfield one?
   Answer: We've ensured our current facilities can support a growth trend of 25% until the new facility is complete. We're actively developing products that will seamlessly transition to the new plant, minimizing any disruptions in capacity.

6. Question: With the commercial production for the new unit in Andhra Pradesh starting late 2027, can you provide the capex plan for '27 and '28?
   Answer: We plan to spend approximately INR100 crores annually for both '27 and '28 on capacity building, totaling around INR200 crores for both years.

7. Question: What are the further industry developments you anticipate that could benefit our aerospace growth?
   Answer: We're engaged in strategic discussions with OEMs on long-term large contracts and value-added activities like subassemblies. We're expanding our capabilities to increase our value in the aerospace supply chain.

8. Question: The order book is mainly from Safran; do we have plans to diversify our client base?
   Answer: We prioritize customer diversification, currently working with over 25 customers to mitigate risk. We're establishing relationships across various OEMs to ensure sustainable growth.

9. Question: How are we funding our capex plans over the next 5 years?
   Answer: We're well-positioned with a cash reserve of INR1,000 crores, sufficient to cover our capex needs. Internal cash flows will also support our expansion plans, minimizing reliance on external financing.

10. Question: With the increasing demand for EVs, how is our product strategy adapting in Europe?

Answer: Currently, the hybrid market is robust, and while EV demand is rising, hybrid components are gaining more traction. We're working to align our offerings to meet the diverse needs of the evolving European market.