Raymond Ltd Q1 FY27 Earnings Analysis

- Targeting consistent growth with approximately 25% year-on-year increase in Aerospace & Defense segment. - Existing facilities planned to support 25% growth for next year; new Andhra Pradesh plant to contribute growth beyond FY28. - Andhra plant commercial production expected in late 2027 (calendar year FY27), with revenue contributions starting gradually. - Capex of about INR100 crores per business per year planned for FY27 and FY28 to expand capacity. - Continuous new product development with around 250-350 new components added annually, supporting volume ramp-up. - Hybrid vehicle component demand growing strongly; EV market growing but gradually. - Long-term order book and strategic partnerships expected to sustain multi-year revenue visibility. - Overall company targets steady growth trajectory aligned with expanded product categories and geographic reach.

- Raymond Limited aims for consistent growth, maintaining historical growth rates in revenues and margins (Page 13). - Aerospace & Defense segment targeting ~25% year-on-year revenue growth, supported by capacity expansions and new Andhra facility (Pages 7, 12). - Precision Technology & Auto Components segment shows 10%+ growth with margin improvements due to operational efficiencies (Page 5). - Margin expansion driven by cost synergies, SAP implementation, and scale economies expected to sustain (Page 9). - The company plans a INR930 crore capex over 5 years focused on aerospace and precision technology to support growth (Page 5). - Strong order book and pipeline of products under development underpin near to medium-term earnings visibility (Pages 5, 13). - Parent company liquidity and internal accruals sufficient to fund capex without diluting equity; organic growth supported by strong cash flows (Page 15). - Continuous ramp-up of new products (approx. 250 annually) expected to enhance future revenue and profits (Page 11).

- Raymond Limited plans to spend approximately INR 200 crores per year on capex for FY27 and FY28, split equally (~INR100 crores each) to build capacities in Aerospace and Automotive segments. - Over 5 years, the company anticipates spending around INR 1,000 crores across its businesses. - Capex funding will come from internal accruals and debt; no immediate need to raise capital from the parent company for organic growth. - The new greenfield facility in Andhra Pradesh is expected to begin commercial production in late 2027 (second half of FY28), with significant emphasis on it as a “clean slate” for strategic growth. - Continuous modular growth model leads to ongoing machine orders aligned with product ramp-up plans, with several machines on order for delivery in the next 3-6 months. - Strategic discussions are ongoing to make the Andhra plant a one-stop shop and move up the value chain in aerospace parts and assemblies.

- The company plans to fund its capex primarily through internal accruals and debt; no immediate equity fundraising is planned. - Management stated that the engineering business has strong earnings growth and sufficient cash flow to fund organic growth without needing capital from the parent company. - Parent company has liquidity as a safety net but will not increase stake or inject capital unless there is an inorganic opportunity (e.g., large acquisitions). - Capex of around INR 200 crores per year is expected, funded through a mix of internal accruals and debt. - No plans to raise equity currently; growth and capex are planned to be self-funded or supplemented by debt as needed.

- Current aerospace order book is approximately INR 2,350 crores over 5 years, translating to around INR 460 crores per year. - The order book is dynamic, increasing monthly or quarterly as new products get added; orders correspond to products already made, not upcoming ones. - Growth is planned at about 25% year-on-year, accommodated by existing capacity till the new greenfield plant in Andhra Pradesh is operational (end of FY27 calendar year). - The company has capacity to sustain 25% growth in the current facility before Andhra plant contribution starts. - Continuous addition of around 200-250 new components yearly helps grow the order book further. - The order pipeline is diversified across 25+ customers and multiple OEMs, reducing customer concentration risk. - Pending validations and complexities cause timelines between RFQ and firm order to range from immediate self-approvals up to 12+ months for complex parts.