/** blogpostTitle: "Raymond Limited FY26: Engineering-led growth, flat EBITDA, and a big capex runway" blogpostSlug: "raymond-fy26" blogpostShortTitle: "Raymond Engineering FY26: Growth and Capex Plan" blogpostCoverImageDescription: "Ultra-realistic corporate finance visual: a clean desk scene with a laptop displaying two side-by-side line charts and bar charts showing revenue rising from FY25 to FY26 and EBITDA flat, plus two segment bars for Aerospace and Defence and Precision Technology and Auto Components. Include a small inset gauge showing net cash surplus. No logos or text labels, neutral corporate colors, sharp lighting." */

Raymond Limited FY26: Engineering-led growth, flat EBITDA, and a big capex runway

Raymond Limited’s FY26 results are best read through the lens of its post-demerger identity. The company is now largely an engineering business with two operating pillars: Aerospace and Defence, and Precision Technology and Auto Components.

On the consolidated P&L for continuing operations, FY26 total income rose to INR 2,312 crore from INR 2,105 crore, a 10% year-on-year increase. EBITDA remained flat at INR 335 crore, and the EBITDA margin moved down to 14.5% from 15.9% in FY25. Profit before tax (before exceptional items) stood at INR 99 crore, down 20% year-on-year.

Management attributed the margin pressure largely to lower non-operating income, while emphasizing that the core operating businesses continued to perform well. The company also stated it ended March 2026 with a net cash surplus of INR 68 crore.

The two-engine model: Precision and Aerospace

The segment mix shows where Raymond Limited’s earnings power is now concentrated.

Precision Technology and Auto Components remains the larger revenue contributor. In FY26, segment revenue grew 10% to INR 1,667 crore, while EBITDA grew 34% to INR 223 crore. EBITDA margin expanded to 13.4% from 11.0%.

Management credited the profitability expansion to volume growth, improved product mix, and operating leverage. The call also highlighted integration synergies and cost programs following SAP implementation and consolidation of buying and efficiencies. The company also noted FY26 includes a non-recurring gain of about INR 13 crore from a land sale in Q2.

Aerospace and Defence is smaller in revenue but meaningfully higher in profitability. FY26 revenue rose 26% to INR 392 crore, and EBITDA increased 25% to INR 88 crore. FY26 EBITDA margin was 22.3% (broadly stable versus FY25), while Q4 FY26 margin stood at 25.5%.

Management stated the growth was driven by new SKUs and production stabilisation at a key aerospace OEM. The investor presentation positions the business as a precision exporter of highly critical aero engine components, and notes that more than three-fourths of segment revenue is from the aero engine category.

Financial summary (continuing operations)

Aerospace: order book visibility and a move up the value chain

One of the most important data points in the presentation is the aerospace order book. The company disclosed a current order book of INR 2,350+ crore over the next five years, alongside a high-conversion pipeline.

Management repeatedly framed aerospace growth as an execution-led journey rather than a pure demand constraint. They explained that scaling depends on engineering readiness, processes, fixtures, systems, and audit outcomes, not just capacity.

A key strategic theme was moving beyond build-to-print. On the call, management described a pivot towards co-design and value engineering. It also disclosed a foray into build-to-spec in Q4, with a maiden order from a defence aerospace OEM for specialised onboard storage systems. While the company did not disclose customer or product details due to confidentiality, the strategic significance is clear: a build-to-spec capability can improve stickiness and potentially lift value capture over time.

The company also stated that aerospace R&D is largely expensed through the P&L, and is typically 3% to 5% of costs. In selective complex programs, some development costs may be recoverable.

Precision and auto: margin expansion with integration and mix

The precision and auto components segment delivered the sharpest margin expansion across the group. In Q4 FY26, segment revenue grew 5% to INR 442 crore, while EBITDA grew 26% to INR 67 crore. Q4 margin rose to 15.2% from 12.7%.

Management cited three drivers: volume growth, improved product mix, and operating leverage. It also pointed to integration actions such as SAP implementation and group-wide synergies across procurement and efficiencies.

While the company acknowledged geopolitical headwinds and a challenging US export market in FY26, it said it maintained growth through “strategic resilience”. It also noted that US trade pressures and tariffs caused logistical complexities and rescheduling across the industry.

Capex and expansion: Andhra as the next platform

The clearest forward-looking commitment in the call was the scale-up plan.

Management stated Raymond Limited is embarking on an INR 930 crore capex program over the next five years: INR 500 crore for Aerospace and INR 430 crore for Precision Technology and Auto Components.

The Andhra Pradesh greenfield expansion is central to that plan. The investor presentation refers to a new facility in Gudipalli, Andhra Pradesh for both businesses. Management said the expansion is progressing and commercial production is expected in late calendar 2027, which it clarified as the last quarter of FY28.

Management also indicated annual capex of around INR 100 crore per business (about INR 200 crore per year across both).

On funding, management stated the parent has significant liquidity and referenced about INR 1,000 crore of cash, along with internal cash generation, suggesting no near-term funding constraint for planned organic capex.

Risks highlighted by management: inputs, geopolitics, and execution

The call also contained specific risk commentary, especially for aerospace. Management cited a contraction in aerospace-grade titanium and aluminium alloys during Q4 due to logistics blockades in the Gulf, and said inflationary pressures have accelerated a strategic pivot toward domestic input localization.

However, it also stated that aerospace raw materials are currently 100% imported due to approval requirements. The company said it has started development of a few materials and expects progress over the next 6 to 8 months.

These disclosures matter because they connect directly to two investor concerns: cost volatility and supply continuity.

What to track from here

Raymond Limited’s FY26 performance shows clear operating momentum in both segments, but also a gap between revenue growth and consolidated margin trajectory due to lower other income and exceptional items.

The next phase of the story is execution-led. The company has laid out a multi-year capex runway, a disclosed aerospace order book, and a stated intent to move up the value chain through co-design and build-to-spec work.

For investors tracking the engineering-only Raymond, the key monitorables are straightforward: delivery on the Andhra timeline, conversion of the aerospace pipeline into contracted revenue, stability of segment margins as scale ramps, and progress on reducing reliance on imported aerospace materials.