28-Oct-2026 21:35:42
RAYMOND LTD Q2 CONCALL: AEROSPACE GROWTH GUIDANCE AT MID-TO-HIGH 20%, ₹1,000 CR ANDHRA EXPANSION, ₹700–750 CR BENGALURU REVENUE POTENTIAL & 20–25% LONG-TERM ROCE TARGET
• MANAGEMENT EXPECTS SUSTAINABLE AEROSPACE REVENUE GROWTH IN THE MID-TO-HIGH 20% RANGE, SUPPORTED BY STRONG COMMERCIAL AIRCRAFT DEMAND, HIGHER CUSTOMER ALLOCATIONS & NEW COMPONENT ORDERS • MANAGEMENT CLARIFIED THAT THE CURRENT EXCEPTIONALLY HIGH AEROSPACE GROWTH RATE OF 72% YOY SHOULD NOT BE EXTRAPOLATED AS A SUSTAINABLE LONG-TERM GROWTH RATE • MANAGEMENT TARGETS APPROXIMATELY ₹700–750 CR ANNUAL REVENUE POTENTIAL FROM THE EXISTING BENGALURU AEROSPACE FACILITY THROUGH DEBOTTLENECKING, ADDITIONAL MACHINERY & PRODUCTIVITY IMPROVEMENTS • MANAGEMENT EXPECTS THE ANDHRA PRADESH GREENFIELD MANUFACTURING FACILITY TO COMMENCE OPERATIONS IN Q3 FY28, AROUND DECEMBER 2027 • MANAGEMENT PLANS APPROXIMATELY ₹400 CR INVESTMENT BEFORE COMMISSIONING THE ANDHRA PRADESH GREENFIELD FACILITY, AS PART OF ITS BROADER EXPANSION STRATEGY • MANAGEMENT REAFFIRMS APPROXIMATELY ₹1,000 CR INVESTMENT COMMITMENT OVER FIVE YEARS ACROSS AEROSPACE & AUTOMOTIVE MANUFACTURING CAPACITY IN ANDHRA PRADESH • MANAGEMENT TARGETS LONG-TERM RETURN ON CAPITAL OF APPROXIMATELY 20–25%, SUPPORTED BY HIGHER CAPACITY UTILISATION, OPERATING LEVERAGE & VALUE-ADDED ENGINEERING PRODUCTS • MANAGEMENT EXPECTS ADDITIONAL NOZZLE GUIDE VANE CAPACITY TO BEGIN CONTRIBUTING TO REVENUE FROM Q4 FY27, FOLLOWING INSTALLATION & OPERATIONAL RAMP-UP • NOZZLE GUIDE VANE ANNUAL CAPACITY IS BEING DOUBLED FROM APPROXIMATELY 8,000 UNITS TO 16,000 UNITS, SUPPORTING HIGHER AEROSPACE COMPONENT PRODUCTION • MANAGEMENT EXPECTS AEROSPACE CUSTOMER APPROVALS TO GENERALLY REQUIRE 3–6 MONTHS, WHILE AUTOMOTIVE CUSTOMER QUALIFICATIONS MAY TAKE APPROXIMATELY 3–9 MONTHS • MANAGEMENT PLANS TO INITIALLY TRANSFER ALREADY-QUALIFIED COMPONENTS TO THE NEW ANDHRA FACILITY TO REDUCE APPROVAL DELAYS & ACCELERATE COMMERCIAL PRODUCTION • MANAGEMENT EXPECTS DOUBLE-DIGIT GROWTH IN THE TOOLS & HARDWARE BUSINESS, SUPPORTED BY MARKET EXPANSION, DISTRIBUTION & PRODUCT DEVELOPMENT • MANAGEMENT SEES SIGNIFICANT HIGHER-MARGIN GROWTH OPPORTUNITIES IN THE AUTOMOTIVE AFTERMARKET BUSINESS, BUT HAS NOT PROVIDED SPECIFIC FY27 OR FY28 REVENUE GUIDANCE • MANAGEMENT EXPECTS THE AUTOMOTIVE AFTERMARKET BUSINESS, LAUNCHED IN AUGUST 2026 WITH APPROXIMATELY 800 PART NUMBERS, TO EXPAND ITS B2C REVENUE OPPORTUNITY • MANAGEMENT EXPECTS INCREASING AEROSPACE ORDERS FROM COMMERCIAL AVIATION, DEFENSE COMPONENTS & INTEGRATED SUBASSEMBLIES, ALTHOUGH NO QUANTIFIED ORDER BOOK WAS DISCLOSED • MANAGEMENT EXPECTS HIGHER VERTICAL INTEGRATION AT THE ANDHRA FACILITY TO SUPPORT LARGER AEROSPACE CONTRACT PACKAGES & MORE COMPLEX COMPONENT MANUFACTURING • MANAGEMENT CONTINUES TO EVALUATE DEFENSE SUBASSEMBLIES, MEDICAL COMPONENTS & GAS TURBINE OPPORTUNITIES AS POTENTIAL LONG-TERM GROWTH VERTICALS • MANAGEMENT INDICATED MEDICAL COMPONENTS REMAIN AT THE SAMPLE-DEVELOPMENT STAGE, WITH COMMERCIAL REVENUE VISIBILITY EXPECTED TO IMPROVE AS CUSTOMER APPROVALS PROGRESS • MANAGEMENT EXPECTS RAW-MATERIAL INFLATION TO BE LARGELY RECOVERABLE THROUGH CONTRACTUAL PASS-THROUGH MECHANISMS, SUBJECT TO IMPLEMENTATION TIMING • MANAGEMENT CAUTIONED THAT FREIGHT COST INCREASES REQUIRE CUSTOMER-SPECIFIC NEGOTIATIONS & MAY NOT BE FULLY RECOVERABLE IN EVERY CONTRACT • MANAGEMENT EXPECTS OPERATING LEVERAGE, PROCESS EFFICIENCIES & HIGHER CAPACITY UTILISATION TO SUPPORT LONG-TERM PROFITABILITY, BUT DID NOT PROVIDE SPECIFIC FY27 CONSOLIDATED EBITDA MARGIN GUIDANCE • Q2 TOTAL INCOME INCREASED 21% YOY TO ₹683 CR, SUPPORTED BY STRONG AEROSPACE DEMAND & STEADY PRECISION ENGINEERING PERFORMANCE • Q2 EBITDA STOOD AT ₹103 CR, WITH CONSOLIDATED EBITDA MARGIN OF APPROXIMATELY 15.1% • H1 FY27 TOTAL INCOME GREW 17% YOY TO ₹1,311 CR, WHILE EBITDA REACHED ₹203 CR AT A 15.5% MARGIN • AEROSPACE REVENUE SURGED 72% YOY TO ₹193 CR IN Q2 FY27, REFLECTING STRONG CUSTOMER DEMAND & HIGHER PRODUCTION ALLOCATIONS • MANAGEMENT CITED APPROXIMATELY 21% AEROSPACE EBITDA MARGIN, ALTHOUGH THE TRANSCRIPT'S ₹29 CR EBITDA FIGURE DOES NOT RECONCILE WITH ₹193 CR REVENUE & REQUIRES VERIFICATION • PRECISION TECHNOLOGY & AUTOMOTIVE COMPONENTS REVENUE GREW 15% YOY TO ₹471 CR, WITH EBITDA OF ₹61 CR & APPROXIMATELY 13% MARGIN • H1 PRECISION TECHNOLOGY REVENUE INCREASED 13% YOY TO ₹915 CR, WHILE EBITDA GREW 24% TO ₹122 CR & MARGIN EXPANDED 110 BPS TO 13.4% • PRECISION TECHNOLOGY B2B REVENUE STOOD AT APPROXIMATELY ₹350 CR, WHILE B2C REVENUE CONTRIBUTED AROUND ₹120 CR DURING Q2 FY27 • MANAGEMENT INDICATED B2B GROWTH OF APPROXIMATELY 17–18%, WHILE B2C BUSINESS GREW AT AN EARLY DOUBLE-DIGIT RATE • MANAGEMENT CONTINUES TO DEVELOP APPROXIMATELY ONE NEW AEROSPACE COMPONENT PER WORKING DAY, SUPPORTING PRODUCT PIPELINE EXPANSION & HIGHER CUSTOMER CONTENT • RESEARCH & DEVELOPMENT EXPENDITURE IS ESTIMATED AT APPROXIMATELY 4% OF REVENUE & IS EXPENSED THROUGH THE PROFIT AND LOSS ACCOUNT, CREATING POTENTIAL QUARTERLY MARGIN VARIABILITY • MANAGEMENT EXPECTS THE INTERIM ANDHRA BROWNFIELD FACILITY TO SUPPORT PRECISION ENGINEERING, AUTOMOTIVE COMPONENT PRODUCTION & WORKFORCE TRAINING AHEAD OF GREENFIELD COMMISSIONING • MANAGEMENT REMAINS POSITIVE ON AEROSPACE DEMAND, CAPACITY EXPANSION, NEW CUSTOMER ORDERS & LONG-TERM OPERATING LEVERAGE, WHILE CUSTOMER APPROVAL DELAYS, FREIGHT INFLATION, WORKING CAPITAL REQUIREMENTS, OEM PRODUCTION SCHEDULES & ₹1,000 CR CAPEX EXECUTION REMAIN KEY RISKS
MID INDIA INDUSTRIES LTD.