Raymond Q2 FY27 Earnings Call — Analysis (NSE: RAYMOND)

Raymond delivered 21% YoY revenue growth in Q2FY27 driven by a 72% surge in aerospace, while raising Bangalore aero revenue ceiling to ₹700–750 Cr ahead of its Q3FY28 Andhra greenfield commissioning.

4 Nov 2026 · Analysis by Alpha Inflection

Result quality: stable — Steady quarter. Management sentiment: optimistic.

The take

Q2FY27 Total Income ₹683 Cr ( +21% YoY ) . Guidance raised — ongoing r&d expense as percentage of re… ~4% . New story: Aerospace multi-year demand visibility .

Results

Revenue reached ₹683 Cr (+21% YoY) with consolidated EBITDA of ₹103 Cr at 15.1% margin, led by 72% growth in aerospace.

Financial highlights

Guidance

Management committed to high mid-20s growth in aerospace, targeting ₹700–750 Cr revenue from the Bangalore facility and ₹400 Cr capex spend on the Andhra plant by Q3FY28 commissioning.

What management committed to

• Raymond's aerospace business will achieve revenue growth in the high mid-20s percentage range over the near term. — high mid-20s, ongoing from FY27
• The existing Bangalore aerospace facility will achieve a revenue capacity of INR700 to INR750 crores before the Andhra greenfield facility ramps up. — INR700-750 crores, mid-FY28
• The Andhra greenfield facility will achieve commercial output by the third quarter of fiscal year 2028. — Q3 FY28
• Raymond will continue to expense research and development costs at approximately 4% of revenue in the P&L. — ~4%, ongoing
• Raymond will target long-term ROCEs between 20% and 25%. — 20-25%, long-term

Key themes

Aerospace ramp-up and precision capacity expansion

How the narrative shifted

• Aerospace multi-year demand visibility: Previously framed around the 10-year order book; now additionally emphasizes daily RFQ wins, rapidly growing backlog, and delivery reliability driving further order allocation.
• Operating leverage and margin expansion: Margin expansion is explicitly quantified (110 bps YoY in H1 FY27), with a nuanced narrative that upfront R&D expensing temporarily suppresses margins but is structurally positive for long-term value creation.
• Aftermarket and brand-led diversification: Moved from a stated intention to an operational reality with a specific launch date and product breadth; revenue quantification is deferred to future calls.
• Greenfield capex timed for next growth wave: A new brownfield bridging facility was introduced as a tactical de-risking and capacity acceleration measure, showing responsiveness to demand without overcommitting strategic capital.
• Defence and medical adjacencies emerging: Adjacencies are now backed by a specific defence order win, transitioning the narrative from purely exploratory to early execution.
• Favourable trade and macro tailwinds: The narrative now explicitly connects trade tailwinds to concrete operational outcomes like increased RFQs and order book expansion.
• Input cost headwinds managed: Shifted from a cautious 'trying to mitigate' posture to a constructive 'actively offsetting through pass-through and leverage' posture, providing specific mechanisms for cost management.
• M&A and inorganic growth war chest: Share warrants were raised specifically to serve as a war chest for inorganic growth; management confirmed ongoing evaluation of targets while maintaining discipline on finding the right fit.
• Indian raw material ecosystem maturation: Management highlighted an accelerating trend of Indian specialty alloy suppliers achieving aerospace qualifications, which is expected to improve working capital dynamics and cost competitiveness over a 2-3 year horizon.

Operational commentary

• Debottlenecked and expanded Bangalore aerospace facility through layout optimization and new machines, lifting revenue capacity from ₹600–650 Cr to ₹700–750 Cr.
• Commenced operations of brownfield facility in Andhra Pradesh as an interim capacity hub for precision auto and training center for aerospace.
• Greenfield mega facility in Andhra Pradesh tracking on schedule for commissioning by Q3FY28 (December 2027) with an initial ₹400 Cr capex commitment out of a total ₹1,000 Cr 5-year capex plan.
• Doubling nozzle guide vane (NGV) manufacturing capacity from 8,000 to 16,000 units per year for CFM LEAP-1A and 1B engine platforms, with revenue contribution starting in Q4FY27.
• Officially launched automotive aftermarket business in August with ~800 part numbers across own-manufacturing and white-label sourcing.
• Maintaining active product development cadence of ~1 new aerospace part per day (~5 per week), expensing ~4% of revenue in P&L development costs.

Analyst Q&A

• Q. Can you provide the current order book position and order inflow quantification for the aerospace business?

  Management explained that aerospace orders are linked to multi-year OEM platform lifecycles (12+ year backlogs) and fluctuating schedules, so headline order book numbers change daily and are not tracked as static totals, though pipeline and order positions are growing.

• Q. What is the status of inorganic acquisition plans funded by the recent war chest / share warrant capital raise?

  Management confirmed they are actively in the process of evaluating opportunities and will announce once the right target is finalized.

• Q. Has the Andhra Pradesh greenfield commissioning timeline been deferred by one quarter?

  Management clarified there is no delay and the plant commissioning target was always Q3FY28 (December 2027), attributing the misunderstanding to financial year versus calendar year confusion.

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