Raymond Limited: Engineering a Future Beyond Fabrics

Raymond Limited, a name historically synonymous with premium textiles, is increasingly making headlines for its robust performance in the engineering sector. The company's Q2 and H1 FY26 results underscore a strategic pivot, showcasing impressive growth and a clear vision for its diversified businesses. With a consolidated total income of INR 564 crores in Q2 FY26, marking a 10% year-on-year (YoY) increase, and INR 1,119 crores for H1 FY26, an 11% YoY jump, Raymond is demonstrating its prowess beyond its traditional strongholds.

The company's engineering segments, now strategically restructured, are at the forefront of this growth. The Aerospace & Defence business, operating under JK Maini Global Aerospace Limited (JKMGAL), reported a significant 15% YoY revenue growth in Q2 FY26, reaching INR 81 crores. For the half-year, its revenue soared by 26% YoY. This impressive performance is attributed to a ramp-up in production at a leading aerospace OEM and the successful contribution from newly developed and approved parts. Similarly, the Precision Technology & Auto Components business, housed within JK Maini Precision Technology Limited (JKMPTL), delivered a strong INR 409 crores in Q2 FY26, reflecting a 10% YoY growth. This segment benefited from robust domestic demand in its Tools & Hardware business and strong demand for hybrid products in European markets.

Strategic Restructuring and Future Outlook

The recent restructuring of the engineering business into two distinct subsidiaries, JKMPTL and JKMGAL, effective August 1, 2025, is a pivotal move. Management articulated that this separation allows each entity to pursue independent growth trajectories, maximizing value unlock. The aerospace and defense sector, in particular, presents a massive unlocking opportunity for India, and Raymond is positioning itself to be a key player. The company is actively expanding its capacity, including a new facility in Andhra Pradesh, with an annual capital expenditure of INR 100 crores, aiming to double the aerospace business in the next 4-5 years. This expansion is supported by a robust commercial aircraft backlog exceeding 16,000 units, providing 12-15 years of revenue visibility.

Raymond's strategic initiatives extend to new product development and market share expansion. The company is continuously enhancing its capabilities to produce complex, high-precision parts for aerospace engines and systems. With 20 state-of-the-art machines dedicated to New Product Development (NPD) and 57 specialized NPD engineers, Raymond is focused on driving innovation and technical excellence. The strategy involves securing an initial 35% market share for new products, with a goal to achieve 65% once capabilities are proven and customer confidence is established. Furthermore, Raymond is diversifying its product lines within engineering, venturing into Clean Powertrain, EV & Hybrid components, Hydraulics, Industrials, Agriculture, Locomotive, Marine, Automotive, and Power Tools.

Navigating Challenges and Sustaining Momentum

While the growth narrative is compelling, Raymond is also navigating certain challenges. The consolidated EBITDA margin saw some compression, standing at 14.1% in Q2 FY26 compared to 15.1% in Q2 FY25, primarily due to a decline in other income. Operational challenges such as certification delays at global OEMs and tariff-related trade tensions in the U.S. have also impacted the aerospace segment, adding margin pressure and delaying some shipments. The Tools & Hardware business experienced softness in export markets, though this was partially offset by strong domestic demand.

Despite these headwinds, Raymond's management remains optimistic, emphasizing its net debt-free status and strong cash flow generation as key strengths. The company is leveraging its deep expertise, established customer relationships, and 'China + 1' sourcing tailwinds to drive future growth. Management's focus on cost engineering, value-added processes, and continuous operational efficiency improvements is expected to mitigate margin pressures and ensure sustainable profitability. The company's ability to attract new global customers and its strong pipeline of strategic opportunities further reinforce its long-term growth prospects.

In conclusion, Raymond Limited is strategically engineering a future that extends far beyond its textile legacy. Through focused restructuring, significant investments in capacity and new product development, and a keen eye on global market shifts, the company is positioning itself for sustained growth in high-precision engineering sectors. The Q2 and H1 FY26 results reflect a company in transition, demonstrating disciplined execution and strategic clarity, building investor confidence in its evolving business model.