Rajoo Engineers LtdQ2 FY22

Rajoo Engineers Ltd Q2 FY22 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹52.02P/E: 19.2Market Cap: ₹930 CrSector: Industrial Manufacturing

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3
  • Rajoo Engineers expects growth of 12% to 15% in the next one year considering current uncertainties.
  • After one year, with potential joint ventures or mergers, growth could accelerate to around 20%.
  • Growth pertains to both top line and improvement in EBITDA and PAT margins.
  • The demand for packaging machinery is expected to continue growing at current rates till the end of next calendar year, then stabilize.
  • Export markets remain significant (41% of H1 FY22 revenue), with ongoing penetration in existing countries rather than geographic expansion.
  • Capacity utilization is currently around 70%, with potential to optimize an additional 10%-12% in the next 3-6 months, which would support volume growth and improved margins.
  • New product lines and technological upgrades in plastic extrusion are expected to contribute to growth and margin improvement beyond a year.

See what Rajoo Engineers Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

  • There is no explicit mention of any current or planned fundraising through debt or equity in the provided transcript.
  • The company has reduced its debt entirely through internal accruals, indicating a focus on using operational cash flow rather than external borrowing.
  • The management highlights a CAPEX plan of Rs. 100+ crores for organic expansion on newly acquired land, but no mention of funding sources such as debt or equity raising.
  • No statements or indications about any imminent equity fundraising or new debt issuance were made during the call.
  • The company seems to be managing its growth and expansion plans through internal resources and existing cash flows without external fundraising at this stage.

See what Rajoo Engineers Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes
  • Rajoo Engineers Limited has recently acquired land that has been converted to non-agriculture status and is ready for construction.
  • The company plans to undertake organic expansion on this land, targeting to start capacity enhancement by next year.
  • The estimated CAPEX for this expansion is around Rs. 100+ crores.
  • No specific inorganic expansion details are shared yet; however, technical collaborations and joint ventures are in early discussion stages but not finalized.
  • Management expects growth of 12-15% for the next one year, potentially increasing to 20% after 2-3 years with new product lines and collaborations.
  • No mention of any cap on the quantum of CAPEX was provided.

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How does Rajoo Engineers Ltd rank vs peers in Industrial Manufacturing?

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