Raymond Limited lifts Bengaluru aerospace ceiling to Rs 750 crore

Raymond Limited has lifted Bengaluru aerospace revenue capacity to Rs 700 crore to Rs 750 crore from Rs 600 crore to Rs 650 crore after adding machines and equipment. The change follows Q2 FY27 aerospace revenue of Rs 139 crore, up 72% year on year, and is intended to bridge growth until Andhra Pradesh begins output in Q3 FY28.

How much aerospace revenue can Raymond's Bengaluru site support?

Raymond now expects its existing Bengaluru aerospace facility to support annual revenue of Rs 700 crore to Rs 750 crore, compared with the Rs 600 crore to Rs 650 crore range it had previously indicated. Management said it had added several machines and other necessary equipment and was still working to determine whether turnover could reach the upper Rs 750 crore end of the revised range.

The revised range is operating headroom at the existing site, rather than a disclosed contract value or FY27 revenue forecast. Management described Rs 750 crore as its ultimate goal, while saying the eventual level would probably be between Rs 700 crore and Rs 750 crore. It said the extra capacity gives the business more time to continue growing before the Andhra Pradesh greenfield facility starts output in Q3 FY28.

Raymond linked the higher ceiling to additions at its current Bengaluru aerospace facility, whose previous revenue potential was Rs 600 crore to Rs 650 crore. The company did not disclose the number of machines added, the capital expenditure involved or individual commissioning dates. It did disclose that the additions include machinery and other equipment intended to raise turnover from the earlier range toward Rs 700 crore to Rs 750 crore.

What is driving Raymond's aerospace growth in FY27?

Raymond's aerospace and defence vertical reported Q2 FY27 revenue of Rs 139 crore, up 72% year on year, with earnings before interest, tax, depreciation and amortisation, or EBITDA, of Rs 29 crore and an EBITDA margin of 21%. Management attributed the increase to the commercial ramp-up of newly commissioned capacities and higher dispatch volumes across original equipment manufacturer, or OEM, and Tier 1 engine platforms.

For H1 FY27, aerospace revenue was Rs 262 crore, up 56% year on year, and EBITDA margin was 21.1%. The 72% Q2 revenue growth exceeded the 56% H1 growth rate, indicating faster expansion in the second quarter than across the first six months combined. Management also cited active requests for quotation, or RFQs, and expanding programme allocations, but did not disclose a numerical aerospace order book or Q2 order-win value.

Management said Tier 1 integrators had moved from holding buffer inventory to just-in-time dispatches, supporting volumes in aero-engine modules, actuation systems and critical structural components. It also said shipset value per aircraft was increasing as customers awarded larger integrated subassemblies rather than standalone machined parts. Raymond did not quantify revenue by aerospace platform, customer, product line or geography.

Will the Andhra Pradesh brownfield site add aerospace revenue capacity?

No separate aerospace revenue capacity has been disclosed for the Andhra Pradesh brownfield site because Raymond said its initial additions there are mainly for automotive production. Management said machines are being added to serve automotive orders and train personnel for both automotive and aerospace work. The company therefore presented the brownfield site as interim capacity augmentation and preparation, rather than a quantified aerospace revenue contributor.

The brownfield facility is located 2 kilometres to 3 kilometres from Raymond's planned greenfield site in Andhra Pradesh. Management said the proximity should help it understand the region and gain experience before undertaking the larger greenfield expansion. The brownfield operation is also a training ground for aerospace and precision technology personnel, which may support workforce readiness for the next facility.

Raymond said construction and setup milestones at the Andhra Pradesh greenfield facility remained on schedule to achieve output in Q3 FY28. Management described the site as infrastructure intended to scale volume across complex aerospace and precision-engineering programmes. Until that planned Q3 FY28 output, the Rs 700 crore to Rs 750 crore Bengaluru range is the disclosed capacity bridge for aerospace growth.

Can Raymond sustain aerospace growth at the current rate?

Management did not commit to maintaining the 72% Q2 FY27 aerospace growth rate; it said its commitment to the market was growth in the high mid-20s. This followed an analyst question about whether aerospace could grow by about 40% in FY28 and FY29 after Q2 revenue reached Rs 139 crore. Management said FY27 had been a good year so far but declined to commit to 40% growth.

Management cited two demand factors: higher Boeing and Airbus aircraft deliveries in the second half than in the first half, and customers seeking suppliers that have capacity and can execute. It said customers can place larger orders after receiving deliveries, while new products are being introduced at a pace of almost one each day, or about five per week. These are management assessments of operating conditions, not a disclosed backlog or aircraft-production forecast.

Supply-chain planning remains relevant because Raymond exports products and imports raw materials. Management said it uses safety stock to reduce disruption, although this adds pressure to working capital, and seeks to avoid premium airfreight where possible. Raw-material costs are generally passed through under contracts after an implementation lag, while freight and pool-cost recovery depend on individual customer contract terms.

The aerospace expansion sits alongside Q2 FY27 consolidated total income of Rs 683 crore, up 21% year on year, and EBITDA of Rs 103 crore, for a 15.1% margin. In precision technology and auto components, Q2 revenue was Rs 471 crore, up 15%, and EBITDA was Rs 61 crore. Aerospace therefore grew faster than the larger precision technology and auto components segment during the quarter, although the businesses serve different products and customers.

Conclusion

Raymond's revised Rs 700 crore to Rs 750 crore aerospace ceiling gives its Bengaluru site a larger runway than the previous Rs 600 crore to Rs 650 crore range. The increase follows Q2 FY27 aerospace revenue growth of 72% to Rs 139 crore, compared with 15% growth in precision technology and auto components. Added machinery and equipment are intended to support aerospace expansion at the existing facility while the next site is developed.

The next disclosed operating milestone is Andhra Pradesh greenfield output in Q3 FY28. Management's stated growth commitment is in the high mid-20s, rather than the 72% recorded in Q2 FY27, so progress toward the Rs 700 crore to Rs 750 crore Bengaluru range and execution of the Andhra Pradesh ramp-up are the next matters to watch.