# 1. Financial Performance ## A. Key Figures * **Total Income:** **₹580 Cr** Q3 FY'26 (+18%) · **₹1,699 Cr** 9M FY'26 (+13%) * **EBITDA:** **₹83 Cr** Q3 FY'26 (margin: 14.3%) · **₹250 Cr** 9M FY'26 (margin: 14.7%) * **Net Cash Position:** **₹214 Cr** surplus as of Dec-25 ## B. Revenue Growth * **Robust Quarterly Momentum:** Strong double-digit top-line growth in Q3, outpacing nine-month trend, signaling accelerating demand and operating leverage. * **Margin Resilience:** Q3 EBITDA margin improved despite prior-year comparison at same level, with full nine-month margin compression attributed to lower non-operating income. ## C. EBITDA Margins * **Aerospace Profitability Lever:** EBITDA expanding rapidly in Aerospace on high revenue growth and **write-off of development costs**, even without margin % expansion. * **Structural Cost Benefits:** SAP HANA implementation and multi-year operational reforms are enabling margin upside, with execution now scaled across teams. * **One-Time Cost Impact:** EBITDA temporarily pressured by **₹14 Cr** labor code-related expense, now behind the company. ## D. Balance Sheet & Cash Flow * **Fortress Balance Sheet:** Debt-free status with **net cash surplus of ₹214 Cr** provides strong flexibility for growth and capex in Q4. * **Efficient Working Capital:** Free cash flow generation supports working capital needs; **packaging credit lines** and **low-cost export financing** reduce cycle pressure. * **Healthy Receivables:** Collections remain tight, with **no material receivables beyond 100 days** and days sales outstanding in line with sector norms. --- # 2. Order Book & Demand ## A. Key Figures * Aerospace Order Book: 2.5x–3x revenue multiple * **Market Share:** Increased to **65%** in select product lines (from 35%) ## B. Aerospace Order Book * **Structural Growth in A&D:** Aerospace segment benefiting from long-term 5- to 10-year contracts, defense-led demand, and global OEMs like Airbus and Boeing increasing sourcing from Indian suppliers amid supply chain diversification. * **Strategic Supplier Shift:** Raymond transitioning from build-to-print to **co-design and value engineering partnerships**, enhancing contract stickiness and value capture. * **Resilient Demand Pipeline:** Order book remains robust at multi-year highs, supported by contract renewals, market share gains, and supply chain disruptions in the U.S. and Europe favoring reliable Indian manufacturers. ## C. RFQ Activity * **Surge in Quotation Demand:** RFQ activity accelerating across aero engines, landing gears, and structural components, driven by global OEMs and Tier 1s seeking India-based precision manufacturing partners. * **Export-Led Manufacturing Momentum:** India emerging as a high-tech export hub, with strong demand from OEMs and Tier 1/2 partners fueled by portfolio expansion and rising production requirements. * **Pipeline Conversion Underway:** Multiple strategic programs progressing from RFQ to contract finalization, supported by strong FAIR approvals and audit outcomes, reinforcing Raymond’s quality and reliability credentials. ## D. Production Ramp-Ups * **OEM Production Recovery:** Boeing has resumed high-rate production—though below pre-COVID levels—indicating meaningful upside potential as global aerospace output normalizes. * **Favorable Supply-Demand Dynamics:** Depleting inventories and sudden schedule increases signal tightening supply chains, creating near-term volume opportunities for responsive suppliers. --- # 3. Product & Segment Performance ## A. Key Figures * **JKMGAL Revenue:** ₹105 Cr Q3 FY'26 (+49%) · ₹273 Cr 9M FY'26 (+34%) * **JKMGAL EBITDA:** ₹19 Cr Q3 FY'26 (+39%) · ₹57 Cr 9M FY'26 (+34%) * JKMGAL EBITDA Margin: 18.6% Q3 · 20.9% 9M (vs. 20.8% prior year) * **JKMPTL Revenue:** ₹417 Cr Q3 FY'26 (+15%) · ₹1,225 Cr 9M FY'26 (+12%) * **JKMPTL EBITDA:** ₹57 Cr Q3 FY'26 (+51%) · ₹156 Cr 9M FY'26 (+38%) * JKMPTL EBITDA Margin: 13.7% Q3 · 12.7% 9M (vs. 10.4% prior year) ## B. LEAP Engine Share * **Proven Platform Leadership:** Over half of LEAP engine parts have achieved **65% market share**, reflecting strong quality execution and customer trust. * **Scalable Growth Model:** Company typically enters programs at 35% share with a clear path to majority share; strategy focused on increasing parts per platform and platform diversification. * **Robust Development Pipeline:** Ongoing investments support rising demand, evidenced by frequent FAIs and a new part developed daily, underpinning long-term share gains. * **Expanding Program Footprint:** Active in **15+ engine programs** including LEAP-1A (A320neo), LEAP-1B (737 MAX), and LEAP-1C, with **300–350 part numbers** supplied across variants. * **Next-Wave Opportunities:** Engaged in discussions for non-LEAP aerospace programs with potential for **INR 100 Cr+ revenue**, backed by 5–6 strategic partners and existing approvals. ## C. Kit Value per Aircraft * **Dynamic Value Accretion:** Kit value estimated at **$35,000 per aircraft** (~2–3% of total), but treated as a moving target due to continuous innovation and new part integration. * **Growth Through Breadth:** Aiming to become market leader in **number of parts produced**, leveraging frugal engineering and OEM relationships with **25 global partners** to expand scope and value capture. ## D. Segment Revenue Mix * **Dual-Engine Growth:** Aerospace & Defense and Precision Technology segments drove performance, with Indian operations increasingly embedded in global high-tech supply chains. * **Margin Expansion Underway:** Automotive and Precision Technology margins improved significantly on volume growth, favorable mix, and integration synergies—trend expected to persist. * **Geographic & Sector Diversification:** Business momentum supported by **China Plus One** shift and cross-segment operational efficiencies, enabling expansion into new international markets. --- # 4. Capacity & Manufacturing ## A. Plant Expansion * **Strategic Capacity Buildout:** Raymond is scaling manufacturing capabilities to meet rising international demand, commissioning advanced **GROB multi-access machines** to enable complex, high-value projects with improved quality and faster turnaround in Aerospace & Defense. * **Dynamic Investment Approach:** Capacity planning is conducted monthly, with frugal, responsive investments in equipment, machinery, and personnel to maintain operational readiness. * **Phased Geographic Expansion:** Andhra Pradesh facility development is timed to preempt capacity bottlenecks, ensuring seamless ramp-up as current plants near full utilization. ## B. Capacity Utilization * **Low-Volume, High-Mix Model:** Aerospace growth is driven by expanding part portfolio and manufacturing flexibility rather than volume throughput. * **Optimizing Across Network:** The company is actively balancing load across sites while bringing new facilities—such as the **Sinnar plant inaugurated in January**—online to sustain uninterrupted growth. --- # 5. Supply Chain & Inventory ## A. Raw Material Strategy * **Full Pass-Through Mechanism:** Material cost fluctuations (e.g., Inconel, aluminum) are contractually passed through to customers, insulating margins from input price volatility. * **Cost Optimization Focus:** Localization of materials is a strategic priority to reduce long-term costs amid rising aerospace demand and inflationary pressures. * **Proactive Inventory Build:** Significant raw material inventory is maintained in Aerospace due to long mill lead times and the need to capture sudden demand opportunities. ## B. Finished Goods & Logistics Model * **Low SOC, Fast Turn:** Aerospace finished goods inventory is lean, but **30-day safety stock** is mandated; deliveries ship from stock on hand within **7–10 days via air freight**. * **Extended Auto Logistics:** Auto Components rely on third-party warehouses, with **65–90 days** to reach destination plus **30-day safety stock**, driving high finished goods inventory. * **Export-Driven Inventory Profile:** **60% of automotive business is export-oriented**, contributing to elevated finished goods levels despite low raw material and WIP inventory. ## C. Delivery Criticality * **Zero Tolerance for Delays:** Timely delivery of every component is essential—**one missing part can halt engine assembly**, highlighting supply chain reliability as a key operational imperative. --- # 6. Risks & Trade Exposure ## A. Key Figures * **Europe Revenue Exposure:** **60%** Aerospace · **30%** Auto & Precision Technologies * **U.S. Revenue Exposure:** **21%** Aerospace · **10%** Precision Technology & Auto Components ## B. U.S. Tariff Impact * **External Headwinds:** Near-term challenges from U.S. tariffs driving logistical complexities and temporary scheduling delays, despite strong internal execution. ## C. Geopolitical Pressures * **Supply Chain Resilience:** Inflation in key materials and geopolitical tensions create uncertainty, yet India’s aerospace and manufacturing sector remains stable and strategically vital. ## D. Europe Revenue Dependence * **High Regional Concentration:** Significant revenue reliance on Europe underscores strategic importance of potential Europe-India trade agreements. * **U.S. Exposure Scrutinized:** Revenue share from U.S. markets under review for margin sensitivity and medium-term trajectory. --- # 7. Guidance & Outlook ## A. Key Figures * **EBITDA Margin Outlook:** **23–25%** long-term target in Aerospace (current: 18–20%) · **>15%** targeted in Automotive (current: 14%) ## B. Capex Plans * **Strategic Expansion:** Multi-year capex program focused on Andhra Pradesh to scale capabilities and secure **more complex parts** in aerospace and auto. * **Opportunistic Investment Approach:** Capital allocation will be guided by strategic opportunities, with emphasis on capability enhancement over rigid timelines. ## C. Margin Projections * **Margin Expansion Pathway:** Aerospace targeted for **+500 bps** improvement on efficiency gains; auto to exceed current margins through incremental optimization. ## D. Growth Run Rate * **Sustainable Aerospace Run Rate:** Favorable industry dynamics (e.g., **China Plus One**) and long-term contracts support durable growth momentum. * **Value Unlocking on Hold:** Strategic partnership preferred over near-term listing; value realization awaits scale, stability, and **cost advantages from new facilities**. * **Long-Term Part Value Upside:** Potential to increase value per aircraft over time as technical capabilities mature, though engineering cycle delays imply multi-year horizon.