Thank you. On behalf of Anand Rathi, I would like to welcome all the participants in the Q4 FY '26 and FY '26 conference call of Raymond Limited.

We have with us from the senior management of Raymond Limited: Mr. Rakesh Tiwari, Group CFO; Mr.

Gautam Maini, MD, Engineering Business; Mr. Sanjeev Sharma, Joint MD and CEO, JKMPT; Mr.

Navin Sharma, CFO, Engineering Business; and Mr. Sunny Desa, Head, Investor Relations.

Without taking further time, I would like to hand over the call to Mr. Gautam Maini.

Over to you, Mr. Maini.

Thank you. Good evening, everyone.

Thank you for joining us today for our Q4 FY '26 and FY— Q4 results as well as the FY '26 results conference call. I hope everyone has had an opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchanges as well as on the company's website.

Moving ahead, let me start by talking about the broader macroeconomic landscape that has influenced our performance and strategic decisions. India concluded FY '26 with a robust real GDP expansion of 7.6%, underpinned by a significant base year revision and resilient industrial activity.

While the manufacturing sector remained in expansionary territory throughout the year, the manufacturing PMI moderated to 53.9 in March, which was a 45-month low, reflecting the impact of energy shocks and the rising input costs from Middle Eastern conflicts. Despite this late-quarter cooling, the fiscal year benefited from structural GST 2 reforms and the RBI's managed policy rate of 5.25%, which helped contain March CPI inflation at 3.4% and supported overall domestic demand.

We look at the automotive industry, it hit a historic milestone in FY '26 with domestic passenger vehicle, which is the PV sales, reaching a record 4.64 million units, a 7.9% year-on-year increase. Q4 momentum was particularly strong with volumes climbing to 13.2% to 1.32 million units, driven by a structural shift towards utility vehicles, which now dominates the market.

Total industry dispatches, including two-wheelers, which was 21.71 million, and commercial vehicles, 1.08 million, reached a combined seven-year peak. Complementing domestic strength, exports touched a record of 0.91 million units, which were 17.5% plus, reinforcing India's role as a critical global manufacturing node.

Looking at the aviation sector, it has maintained significant momentum in FY '26 with global OEMs tripling India sourcing compared to 2019 levels to reach $1.5 billion annually. This expansion is fueled by the deepening of Tier 1 manufacturing roles for Indian firms and a global airline transition towards fuel-efficient, next-generation fleets offering 25% gains in fuel burn efficiency.

Despite a record backlog of 17,000 commercial aircraft representing over a decade of revenue visibility, actual conversion remains hampered by engine shortages and supply chain friction. Q4 was specifically impacted by a contraction in aerospace-grade titanium and aluminum alloys following logistic blockades in the Gulf.

These persistent inflationary pressures have accelerated a strategic pivot towards domestic input localization to insulate margins from geopolitical activity. The aerospace component ecosystem remains highly resilient due to extreme barriers to entry.

Suppliers who have cleared rigorous certification hurdles are protected by a compliance moat that insulates them from low-cost competition. For the component and hardware ecosystem, this record high order book provides unparalleled long-term revenue stability provided that domestic localization can successfully mitigate ongoing material cost premiums.

Raymond Limited, on its consolidated performance, continued its growth momentum, delivered a resilient quarterly performance, reporting a total income of 613 crores, reflecting a 2% increase compared to the same quarter of the previous financial year. EBITDA stood at 85 crores with an EBITDA margin of 13.9% in Q4 FY '26 versus total income of 601 crores in Q4 of FY '25, delivering an EBITDA of 99 crores with an EBITDA margin of 16.4% in Q4 of FY '25.

Q4 FY '26 performance was anchored by the Aerospace, Defence, and Precision Technology divisions, reflecting the structural integration of Indian suppliers into global high-tech value chains. We are observing a significant migration of domestic vendors from basic component manufacturing towards high-complexity subsystems and precision-engineered assemblies.

This transition has secured a robust multi-year order pipeline for Tier 1 and Tier 2 export partners, enhancing both revenue visibility and contract stickiness amid broader global supply chain realignments. During FY '26, total income stood at 2,312 crores, a 10% year-on-year growth from 2,105 crores in FY '25.

EBITDA was flat at 335 crores in FY '26 compared to the same number, 335 crores, in FY '25. The EBITDA margin stood at 14.5% in FY '26 versus 15.9% in FY '25.

While operational performance remains strong, EBITDA margins faced pressure due to a reduction in non-operating income. 600 crores of cash was transferred to Raymond Realty post the demerger, hence the difference.

Going forward, we continue to remain optimistic about the future growth trajectory given our expansion strategy in new product categories and new geographies. I'd like to move on to the segmental performance to give more clarity on the operations, we'd look at the Aerospace business first, which is through the company JK Maini Global Aerospace Limited.

At the segment level, the Aerospace and Defence business reported robust performance with revenue of 119 crores, which is a 11% year-on-year growth, and an EBITDA of 30 crores, which is again 11% year-on-year growth, and an EBITDA margin of 25.5% in Q4 of FY '26 versus a revenue of 107 crores and an EBITDA margin of 27 crores and an EBITDA percentage of 25.5% in Q4 of FY '25. In FY '26 full year, this segment generated 392 crores in revenue, which is a 26% year-on-year growth from 311 crores in FY '25.

EBITDA also grew by 25% year-on-year, reaching 88 crores compared to 70 crores in FY '25. The EBITDA margin stood at 22.3% in FY '26 versus 22.4% in FY '25.

Q4 FY '26 performance was driven by a dual strategy of portfolio expansion and increased volume allocations from core OEM and Tier 1 partners. Forward-looking indicators remain robust, characterized by a steady rise in the RFQ activity, which is request for quotation, and the pursuit of new global strategic ventures.

This healthy demand supports continued capacity scaling and deeper integration into the high-tech supply chain. While internal growth indicators remain strong, the near-term outlook is currently influenced by external macroeconomic factors.

Precision Technology and Auto Components, which is the JK Maini Precision Technology company, is at this segment level. This Precision Technology and Auto Components company reported a revenue of 442 crores, which is a 5% growth, and an EBITDA of 67 crores, which is a 26% year-on-year growth, and an EBITDA margin of 15.2% in Q4 of FY '26 versus a revenue of 421 crores, an EBITDA of 53 crores, and an EBITDA margin of 12.7% in Q4 of FY '25.

In the full year of FY '26, this segment generated 1,667 crores in revenue, which is a 10% year-on-year growth from 1,513 crores in FY '25. EBITDA also grew by 34% year-on-year, reaching 223 crores compared to 167 crores in FY '25.

The EBITDA margin stood at 13.4% in FY '26 versus 11% in FY '25. The EBITDA margin improvement was also on account of higher sales volumes, favorable product mix, but also included a one-time gain of 13 crores from the sale of land in Q2 of FY '26.

We continue with our strategy to expand into new international geographies and industrial sectors. We are observing business momentum across domestic and international markets, supported by the China+1 strategy, integration synergies, and focused operational efficiencies across all segments.

However, global trade pressures stemming from U.S. tariffs have introduced logistical complexities, resulting in some temporary rescheduling and delays across the industry.

Let us come and look at the debt and cash position at Raymond Limited. We continue to remain a debt-free business with net cash surplus of 68 crores in March 2026.

Raymond is embarking on a transformative 930 crore capital expenditure program over the next five years to meet surging international demand. This includes 500 crores dedicated to aerospace, projected to scale current capacity significantly, and 430 crores for Precision Technology and Auto Components.

The integration of advanced multi-axis machining systems is already enhancing turnaround times and enabling the execution of complex high-value projects in aero engine, landing gear, and structural segments. Our operational reputation is reinforced by consistent FAIR, what is typically called first article inspection report, new product development approvals, and successful audit outcomes accelerating the conversion of RFQs into multi-year contracts.

We are strategically pivoting beyond build-to-print services towards co-design and value engineering collaborations with global OEMs. This shift into sophisticated subsystem manufacturing deepens our integration into the global supply chain and enhances long-term contract stickiness.

As global OEMs increasingly look to India for supply chain diversification, Raymond Engineering's business is uniquely positioned to capitalize on this structural tailwind. With a record RFQ pipeline, robust operational readiness, a clear focus on high-precision innovation, we remain committed to scaling exports and reinforcing our status as a trusted global manufacturing hub.

I'd like to thank you all once again for your continued interest in Raymond. We are now happy to take your questions.

Good evening, sir. Thank you so much for the opportunity.

Sir, in the aerospace segment, we have added 100+ new SKUs in this year. What is the R&D expense in this financial year?

Are these development costs contractually reimbursable by the customers?

Basically, it's a mixed question, but let me try and answer that. Most of the R&D costs are written off as operational costs.

It's between 3% to 5% of your cost, but we write it off in the same year because we're considering it as part of our business model to grow aggressively. In some cases where the projects are very complex, you can get some development costs, but in a lot of cases, it is included in the prices that you quote, and therefore you build them into your price.

The clear answer is that we do not separately record these costs, and we write them off in the same year like operational costs. In a way, the more products you develop, the more you write off that particular year.

Yes, sir. Sir, out of our current order book, we could share the breakup between LEAP programs, GTF, and other platforms?

I don't think we go to the extent of sharing exactly on all platforms, but I just want to tell you that we are basically present on several platforms across all the possible engine OEMs globally, both in Europe and U.S., and we are significantly looking to continuously increase our market share with them. Therefore, our goal is to be de-risked, that whether it's a narrowbody aircraft or a widebody aircraft or whether it's in Europe or whether it's in U.S., we are part of those markets and we have de-risked ourselves to make sure that we are part of most of these programs.

Yes, sir. Sir, on the tariff side, I think it's been reduced from fifth month onwards.

How do you look at from Q1 onwards?

Sorry, can you repeat that question?

Sir, tariff impact has been reduced from fifth month onwards. It's a mid of the quarter.

How do you look at from Q1 onwards?

Are you asking this question for aerospace or automotive? Just to clarify, in aerospace there were no tariffs,

and

in automotive the tariffs are definitely down to 18% now, it's definitely better than what it was. I think slowly customers are getting used to the new normal, and therefore slowly business will start coming back and is coming back.

It's taken some time, but I think it will only get better. However, in the meantime, because of the war, you had disruptions on supply chains, etc.

It will just be a little bit more time, but it will slowly come back.

Yes, sir. Sir, my last question.

I think in the auto side, we majorly doing for IC engines, EV, hybrid. On that EV side, which are the components we are doing right now, and what is the target in the coming years?

We make some complex assemblies as well, completed fully transmission gearboxes as well. We also do some very critical components that fit into the hybrid transmissions globally in Europe, and those also get exported to all over the world.

I would say we are in a good space in terms of both hybrid and EV, and we are trying to horizontally deploy this across our customer base over the next couple of years. We would definitely focus on that.

We did see that the hybrid market grew in the last two years compared to the EV global market, and therefore we focused a lot on the hybrid market and captured a major market share.

Thank you, sir. All the best.

Thank you for the opportunity. You have this order book of 2,350 crores on the aerospace side.

Wanted to know how much can you facilitate from the existing facility, not including the greenfield one that's putting up?

We have planned it in such a way that we will not run out of space till we grow. We will continue to keep our trend of 25% growth till we reach the new greenfield facility.

Nothing will stop us in the meantime to continue to keep the growth that we have. In fact, we will also continue to develop new products here itself, which will then be transferred to the new facility when it gets ready, to shorten the lead time of customer approvals in the new facility.

A detailed, seamless plan is being made to ensure that there is a continuous growth in the new facility when it comes out, without running short of capacity in our current facility.

Okay. Sorry, I'm extending the same question.

Your current yearly revenue for aerospace and defense is almost 400 crores, and you're talking of a 25% CAGR. You are talking of almost additional run rate going to 500, around 800-900 crores run rate in FY '28, and that's when you're expecting the new facility to start.

Is it the right way to look at? We're

starting the new facility by the end of calendar year FY '27, right? We're talking about an 18-month period, first of all, and therefore we would be closer to a number much lower than what you said, and we will definitely have capacity to reach that number before we move to the new facility in Andhra Pradesh.

Right. Sir, the last question, and I'll come back on the queue.

There is a lot of shortage of machinery for machines, like the likes of GROB and other machines in the global market. Are you fully ordered for the machines for your facility and or it's just a step up on a gradual side?

Want to know on that. We don't depend on one manufacturer.

I think we must be having within our group at least 15 different manufacturers. We look at what machines are required for what operations, what complexity, and based on that, we buy our machines.

We plan our machines' lead times well in advance to make sure that we don't lose out on any of our projects, and that will be the trend going forward as well. We also buy from all over the world, it's not restricted at all.

No, Mr. Maini, my question is more specific to you: Have you completely ordered all the machines, or you are yet in the process of doing it?

We continuously have a capacity plan that we order in times of lead time. If our lead time we believe is, let's say, 6 to 8 months, just to give you an example, then we plan 6 to 8 months in advance to make sure.

You have to understand, we'll be growing almost on a weekly, monthly basis. It's not like a project, like a cement plant or some other plant where you put a big project and then you expect it to grow.

Ours is a modular growth which happens every month. Let's say you develop 15 new components this month, 6 to 8 months from now you have a ramp-up plan for them.

You already plan those machines, and based on the lead times you have committed to the customer, you then plan to buy those machines. You'll practically have machines coming in every quarter for continuous expansion on growth.

Right now also, we have several machines that are on order which we will receive over the next 3 to 6 months, and then we will keep ordering based on what new products are being developed and the ramp-up plan of those products. Continuous process.

Sure.

Got it. I'll come back to the queue.

Thank you.

Sure. Thank you.

Sir. My question is regarding the commissioning.

In the presentation, we are saying that the commercial production will start by late of 2027.

Probably towards the end of FY '28. I can't hear you very clearly.

Can you just either come closer to the mic or just speak a little louder, please?

Yeah. Sir, audible now?

Yes. Yes.

Yeah. Sir, regarding the commercial start of the new units in Andhra Pradesh, the presentation is mentioning late of 2027.

It means that probably it was the end of FY '28, the commercial production will start. Correct?

Is that reading right?

Or because I think in your initial remarks you were saying towards the It'll be on the second half. It'll be second half or towards the last quarter of FY '28, you're right.

Which

is calendar year 2027. Yes.

Yeah. How would be the capex plan for '27 and '28 towards these units as well as for the existing units?

Yeah. Basically, in each of the businesses, we will approximately be spending about 100 crores each to build capacities, which will be consistent.

Yes.

So 200 crore per year for both the units for FY '27 and '28?

Yeah.

Okay. Sir, in the aerospace side, what further industry developments you are seeing which could be kind of tailwinds for our growth?

We have quite a few strategic plans which I can't disclose fully at this stage till they're concluded, but I can tell you that we are involved at a strategic level with both OEMs and Tier 1s with some long-term large businesses, which only once they conclude, I can bring to the notice. There's a lot in the pipeline.

There's a lot of effort being put to move up the value chain, which we've been talking about, and also add more value-added work also in terms of subassemblies and then final assemblies. We've also, like I mentioned before, we're doing some design-to-build work.

On all the fronts, we're trying to expand the value creation.

Okay. Great, sir.

Just one last question on the other income side. On the consolidated basis, other income has fallen sharply.

Is that probably some dividend that you would have received in the fourth quarter of last fiscal which was not there in this quarter or

There are two parts to the other income. There is other income which we get because there's a surplus fund or surplus corpus available in, let's say, Raymond Limited, which is the parent company.

Then there's also other operating income, which is essentially generated from, let's say, sale of scrap and all, because more particularly in the aerospace business, there's a lot of scrap which gets generated because when you machine. It has both elements.

Okay. Right, sir.

I think I'll stop here, and if further questions are there, I'll come back in the queue. Thank you.

Hi, sir. Thank you for the opportunity.

I hope I'm audible. My first question was in the line of our precision auto business.

The EBITDA margins expanded around 250-260 basis points, but the top-line growth was only 10% on a yearly level. What really drove the EBITDA margin expansion, and is it fair to assume that these kind of margins are sustainable?

There was an exception of 13 crores, which I hope you're aware of, which you have to take out from the equation, which was a one-time cost from the land sale that we had. Once you remove that, basically, we implemented SAP in August.

We did a lot of work on integrating all of the companies. We've ended a lot of synergies across the companies.

All of this, I would say, came together before the start of the last quarter. Therefore, synergies from the companies, cost reduction activities, improvement in efficiencies, consolidated buying, all of those had a role to play in margin expansion.

The margin will continue going forward as well because these are permanent synergies and cost reduction programs that we've put in place. Yes, this year there's going to be some amount of pressure because certain raw materials have gone up, but normally these are pass-throughs, there will be a lag.

In effect, the margin should remain where they are.

See, there is a big, strong cost consciousness mindset, and which is why we are running a formal cost reduction program this year. Clearly, the focus on improving margins not just from the growth, but also from cost efficiencies, remains a priority.

All right, sir. In our segmental performance also, we have some other operating income or losses there.

We incurred around 13 crore of loss in the other segment. Could you give a breakup of that?

See, the Raymond Corporate essentially, which is the holding company, has other income which comes in in the form of interest income that it generates on the corpus it has. Obviously it has some expenses as well.

More or less, of course, you can't measure that on a quarterly basis, but I guess the best thing is to look at it on a full-year basis. On a full-year basis, the income more than offsets the expenses, and therefore, to that extent, it could be one quarter here, there, but broadly, the way you have to look at this business is that Raymond Corporate will be more or less even-steven.

There could be some marginal loss on some quarter or some year, and there could be positive some year, some etc. Broadly neutral.

The way you can look at this business is you have to look at the Aerospace and the Auto segment, and then really focus on those two segments, and not on the corporate. That you can assume will be always even-steven, with some marginal loss or profit.

All right, sir. Got it.

Lastly, on our aerospace business, we have highlighted our order book. This order book is largely from Safran, or are we taking in any other customers?

What is the concentration?

You have to appreciate that we have over 25 customers, and one of our strategies has been to de-risk our customers. Even when you talk about the OEM you mentioned, they have more than seven different legal entities, we're working with many of them.

The point is to de-risk our business across several customers with whom we already have approvals, and that puts us in a very good position to scale business.

All right, sir. My direct question was can you give a breakup of how much would be LEAP engines from the total order book, only LEAP engines?

I don't think it's okay for me to give you a direct breakup, but let me tell you that over 75% of the products that we make are for the engine segment across the OEMs globally, which should be a good direction for you to know.

All right, sir. Lastly, I'll join back the queue after this.

We have guided that we'll be adding around 300 to 350 new components every year. How has that been playing out till now?

Are we in line to ramping up those things?

Yeah. I talked about one component a day that we will start to do, and this year we should manage that, but I don't count your all the days in the year.

I would say 250 is possible to be made this year, and we should be on track for it.

All right, sir. All right.

Thank you so much. I'll join back.

Hello. Sir, firstly, congratulations on a good set of numbers.

I have a couple of questions. First, on the net cash number that you have presented, which is 68 crores, if I look at the balance sheet, right, I see borrowings of around 1,000 crores and some cash of 200 crores.

Can you please provide the reconciliation for the same?

Sorry, which page are you referring to? The numbers that you are correct, around 1,000 crores.

If I look at the consol balance sheet, borrowings comes to about 1,000 crores, and if I look at the cash and bank balance, it's around 200 crores. Just trying to understand what else is included in the cash line item.

There are investment in other marketable securities, right? You have lots of let's say instruments in which you invest to optimize or yield when you're sitting on a large corpus.

There's be a variety of instruments here.

Okay. These would be liquid instruments, right?

That's correct. They are largely liquid.

Some may have two, three years kind of timeframe, but largely liquid.

That helps. Sir, second question is more along the lines of on the aerospace business.

Right now we are primarily into engines. As we scale, right, is there any plans to get into, let's say, aerostructures or landing gear?

If you can help me understand with the business strategy around it.

Like I said before, it's 75% in engines. Obviously, the other 25%, we are in landing gears, we are in hydraulics, we are in fuel, we are in other accumulators, we're in auxiliary engines.

We are not restricted ourselves to any. The idea was to create enough relationship with the aerospace industry as a whole, and then depending on where the opportunities were, we would take them.

We will definitely be taking opportunities in all areas, obviously keeping in mind our growth rates, our ROCEs, our returns, and wherever we find them to be the best, we will pursue those on priority. Because like we said, the market is so large that it's more limited by what you can execute rather than market.

It's very important to execute right, and that is the focus of the company now is to make sure that we can grow our execution base.

See, the critical thing is that the biggest opportunity for us is when we start setting up Andhra, it's a clean slate for us. On a clean slate, and Gautam alluded to it, but maybe I'll make it more specific, that the kind of conversation we are doing with most of our partners are basically to say, "Boss, you tell us what you want us to put," kind of story.

That we can become more strategic with them. Obviously we want to, A, make it kind of one-stop shop for the customer.

That will help the business trajectory. As well as, I think, one of the other participants had asked a point on 250 parts and those kind of things, but I think it's not the 250 which is more important, what is important is that how do you go up the value chain on those 250 parts.

That's also part of that Andhra strategy because, A, there's no baggage. It's a total new parcel of land.

We have got 45 acres for aerospace. We can do what we like to do there.

Therefore, we would rather try to reshape the trajectory of the business versus doing more of the same. Those are the kind of things we're trying to work on.

Now, of course, they'll happen when they happen, but that's the thought process.

Understood. Thank you so much, and all the best for FY '27.

Thank you.

Thank you.

Hi, sir. My first question regarding, sir, your aerospace business.

As you mentioned, this will be grow 25% year-on-year. Isme sir, for FY '29, how much revenue we expect from your Andhra plant for aerospace?

Yeah. Obviously, the Andhra plant, in the first few months, you can't expect any revenue because you'll have customer approvals and stuff like that.

We will grow in a very small way in FY '28, which is your calendar year ending FY '27 and last quarter of FY '28. In FY '29, you will see the real growth.

And

Let me try and address this question separately without getting into specific numbers. See, we have the capacity to grow this business by 25% for next year within our existing system.

To that extent, whatever growth will happen will happen in the existing unit to a large extent. Then Andhra really starts kicking in towards the end of FY '28.

Now, FY '29, the next 25% has to come from Andhra.

Okay.

Yeah.

The next 25% has to come from Andhra. It can't come from anywhere else,

yes. Right.

Okay. The assumption for existing business,

aerospace business,

your business for FY '28 nearby 650 Cr from this one. For FY '29, again we take 25% growth from existing plant, and for Andhra, is the 25% of 800, or just again you have to add 200 of

I think it's mathematics, yaar. You can do your math as much as we can do, na?

All we can say at this stage is that we are targeting a 25% growth year-on-year, and the first year's growth can be taken care by the existing plant. The second year will have to be taken care by Andhra.

Abhi wo maths mein, it will be some number between 150 to 200 crores, but whatever that number is.

Right, sir. Okay.

Sir, my next question regarding your auto business, especially EV side. Sir, demand for EV is increasing in Europe.

Any outlook from your side? How is the demand or how is your product for Europe?

Any export to Europe also?

I would say that the demand for hybrids has been much higher than just the demand for EVs, where we have been spending a lot of time as well. That demand looks very strong for us.

In fact, the volumes are increasing, and it's helping offset some of the other issues that are there with markets. I would say the hybrid market will continue to be very strong.

The EV market, we have to still watch because the governments in Europe have moved the dates out by 4-5 years. To that extent, the EV market is not as strong as the hybrid market, but as a percentage, they continue to grow.

Hi, sir. Thank you for taking my question.

For FY '27, what kind of growth do we expect with, and what kind of EBITDA margins are we expecting?

You've seen us historically grow at a certain pace, and we're going to keep that growth rate constant, I feel that there's a positive signals, and we will move on that basis.

Also with the margins?

Yes, also with the margins.

Sir, can you also provide a breakup of the capex that you're planning to do over the next 5 years?

Each year almost you can take approximately 100 crores from each company. Over 5 years, you'll probably spend 1,000 crores.

Sir. Got it.

Thank you so much.

Thank you.

Hi, team. I hope I am audible.

Yes, you are.

Great. Congratulations on a very strong set actually.

It's getting disguised because of the other income bit of it. There are a couple of questions.

First is we've said that we have a very interesting pipeline of product development and products that are under development. Could you tell me or would it be possible for you to share status on, say, total number of products developed and total number of products commercialized?

What would be the proportion of it, and how do you see that ramping up? Could you throw some light on that?

That's the first question.

Yeah.

Okay.

Answer the first, and then maybe it'll be easier. Basically, see, whatever you develop, depending on the timeline that you have from the customer, certain products can ramp up within 3 months, some will take 6 months, some will take 9 months, depending on the complexity, depending on the customer's order, depending on the contract the customer wants with you.

You have to work everything backwards from what the customer wants as a portion of ramp-up. Basically, you have to appreciate if you take an average period of about 6 months, right, you will maybe have 100, 125 parts that are not yet in ramp-up, but are in a process where you've developed the samples.

That's a cycle, because those parts will then come into your ramp-up, they will then go into production, and then you'll have new parts that come into your new product development. It's a continuous cycle that runs, and that could be the gap.

As you increase your new product development, you'll have more and more parts in the pipeline before they ramp up. That's what the number looks like today.

Am I audible?

Sir, you mentioned about the capex plan you have for the company for both the company. Just wanted to understand what are the plans for funding the same?

Secondly, the growth rate of the auto component segment which is part of our company. I just wanted to understand what is the growth rate for the next few years.

Basically, at the Raymond Limited, we're sitting with 1,000 crores of cash, right? There's enough sitting there, plus the internal generations.

Based on that, we don't see any problem in funding the capex.

Due to that, will the parent company increase the stake

Due to that

Let me respond to this. I guess I think the critical thing is that the balance sheet of the engineering business itself, with the kind of earning growth trajectory that we are estimating, itself has strength to take care of the growth plans.

It doesn't need to actually draw upon the parent company for any capital for its organic needs. To that extent, we can continue to grow the business whilst strengthening our balance sheet also.

Now, on top of it, the safety net is that the parent company has liquidity. Therefore, which is why if you see on an overall basis, we have a pretty much almost zero net debt.

That's something which will continue.

Due to that, will the parent company increase the stake in the Raymond Limited? No,

no, because if the businesses can self-fund itself from its cash flows and the cash flow generation and the earning growth trajectory, then you don't have to really draw on capital from parent company for the organic needs. Of course, if something inorganic happens, depending on the size, scale, etc., then at that stage, maybe parent company will have to chip in.

That is how we anticipate at this point in time, having done the long-term projections. See,

for doing 200 crore of capex, I really don't need 200 crore rupees, right? It's always a mix of accrual and debt.

Our cash flows are supporting us well.

Hi. My question is regarding the recent order win in the built-to-spec domain.

Could you throw some more light on this, please?

Actually, we're not able to disclose that right now due to confidentiality, but this is a product that we've developed for a customer which is also designed completely by us, and it's the first time we did a build-to-spec. Our goal is to look at how we can take it.

It's a slower process. It's not immediate results.

I'm glad that we've got our first order, and therefore we will be spending more time on this as the years go by.

No, congratulations on that. Could you throw light on how this would position us to move up the value chain?

Obviously, today we make components and assemblies and subassemblies based on customer drawings. This would be our own product, obviously it makes a big difference.

You have to start small, it takes time. The aerospace industry is not an industry where you can just get in and do something.

You'll take a few years to establish yourself into the build-to-spec area, and we've just made a beginning there as one part of our value addition that we intend to bring in different parts of our business in aerospace.

Got it. Thank you, and all the best for the new effort.

Thank you.

Hi. Am I audible?

Yeah. Sorry.

I'm particularly new to this company. I had a doubt on the shareholding pattern.

When, as an investor, I am invested in Raymond Limited, what do I get? As in I actually get a share of the parent company, right, the Raymond Limited company, which has got two subsidiaries.

The parent company has got about 66% shareholding in the two subsidiaries, if I'm not wrong. Can somebody please clarify as in how does it work out?

See, I think the very simple way to look at it is that it's a 300 crore broadly EBITDA company, and you own, as a shareholder, 2/3 of that EBITDA. It's a 200 crore EBITDA that you own.

Then there is a debt at the businesses, but there's more than sufficient liquidity at the parent company which offsets that debt. To that extent, if you have to just simply look at the companies, then you have to say it's a 200 crore EBITDA that you own, in a very, very simple manner.

It's

about 65% of whatever EBITDA that the company generates, right, at the annual level?

66.3%, na? 66.3 is 2/3.

If company does 300 crore EBITDA, then you own 200 crore of that EBITDA, because 66.3% is roughly 2/3. I'm just making it simple for you.

Of course, you have to multiply by 66.3% if you want to be precise.

Got it. My another question would be since we are in our aerospace business, since we are into turbine vanes and all that, do we have a play in the gas turbine segment as well, other than the aerospace business?

Are we looking at that as a possible segment?

We have looked at it, and we don't rule it out in the future because there are similarities, and we have some RFQs in that direction. We are definitely looking at it, and it will be very natural for our own production as well.

Hi, sir. Across our raw material mix, across Inconel, across stainless steel, titanium, aluminum, how much do we import and what do we import?

How much is sourced from India?

Typically, as of today, you import 100%, right? We have just started development of few of the materials, which are hopefully over the next 6 to 8 months we'll see some progress.

In auto, we don't, but I'm talking specifically on aero, right? On aero, we import 100% today because you need approvals, etc.

Slowly, over the years, as we localize these materials and as the OEMs give approvals, this will actually be in the favor of not only us, but all Indian companies to get more competitive in the future as these raw materials get localized in India.

Okay. In terms of your SKUs and components, you said that you'd add about 200 to 250 components this year.

Now what is the mix between assembly and components? Is there a mix that can definitely define on that side?

Yeah. I would say probably 20%, 25% of them would be subassemblies.

Some would be main assemblies, and the rest would be components that you would use for those subassemblies, or some components you would use which are complex components you would use on your own. Typically, in the engine side, you will have a lot of subassemblies or on their own, unlike structures and systems where you could have more number of assemblies.

Yeah. Hi, sir.

I just wanted to know, in aerospace, what is your current utilization, and is the growth more constrained because of the capacity, or is it because of the orders?

I don't think it is either. It is a question of execution.

When you say execution, you've got to have the right engineering, you've got to have the right process, you've got to have the right tools, you've got to have the right fixtures, you've got to have the right systems. It's the entire supply chain process, end to end, that you deliver a product, and the pace at which you can do it, and the speed and accuracy with which you can do it.

It's a question about having the entire delivery process smoothed out rather than just saying is it capacity or is it orders. It's definitely not orders.

It's the ability to execute, and capacity is only one issue of the entire supply chain. You need to get the whole story right, and then it works.

Okay. Because see, we've been hearing about this huge order backlog by the bigger OEMs and all.

Right now when we're looking at this order book of 2,300 over 5 years, it's just 460 a year. Help me understand what is holding back this revenue expansion.

Why isn't growth going as much as the order backlog conversion? I'm just trying to understand that.

Yeah. You need to understand that these orders are for products that you've already made, not for products that you're making, because they are not in the contract yet.

When you make, let's say, the 200 products we would make this year, those are not in the contract. Almost on a monthly basis or a quarterly basis, your order position keeps increasing based on all the new products you keep adding.

It's not like a fixed this is the current situation, but situation is changing every day, every week, every month. These are just orders that you've had in the past.

See,

this is if we stop taking new orders, then how big the order book is. We'll not stop taking orders, right?

Hi. Thank you for the opportunity.

I just wanted to ask what would be the capacity utilization of the current 8,000 units and what would be the incremental capacity in the Andhra plant?

The vanes, we have enough capacity in the current plant, and we've just doubled our orders, we will be adding it in this plant itself before we go to the Andhra plant. What was the second question?

The incremental capacity in the Andhra plant for these vanes. Yeah.

There are different kinds of vanes. The ones we do today are cast iron, they're out of titanium, they're out of steel, some of them are machined, some of them are you can't even machine because they're made out of harder metals.

There are many varieties of vanes, and depending on which variety we will get how much order, then we will, based on that, we will do our Andhra plant. We will also fill up first our current capacities here, and then based on whatever new orders come, we will move them to Andhra.

Congrats for the good set of numbers. I have one question that one of our peer group has recently won order from Rolls-Royce.

Were we participating in the similar program? Hello?

What was the last part of your question?

One of our peer group of company has recently won order from Rolls-Royce, were we participating in that program also?

See, it's not an order win per se. There was an acquisition opportunity of an asset which came with a lot of its own set of complexities, which is what they have acquired.

What they acquired had a contractual term as part of the acquisition. They have just aggregated the entire contractual term of the current size of the business.

It's not a new win that they have. Having said that, there are lots of RFQs that we are participating with, not just Rolls, but many other customers.

As we keep winning them, we will keep reporting them.

Okay. Just an extension of that question.

What is that timeline and gap between the RFQ and the real order placements from the OEMs?

Again, it depends, like I said, if you take the OEMs, they have different complexities. If the parts are very simple, then the turnaround time is very quick.

In some cases, we have self-approval process, they don't even check our parts. They trust us to do the right job.

In some cases, the medium complexity, it could take 3 to 6 months. In very complex, it could go 12 months.

If it needs validation, it can go even further. I think each part is on its own, and that's the reason why you have to make a lot of parts, because each one will follow its own path, which will have its own ramp-up plan, will have its own growth strategy.

The ability of a company to continuously make new product, continuously scale up and ramp up, that's what we are looking at.

Hello.

Yes. My question is for Mr.

Gautam Maini. I read call you had, I think, last year, where you mentioned that there are four levels of critical components: N1 to N4, and we work at N2.

I think that tech was at least partially transferred to us by Safran. Are we planning to get into N1 level of components, the rotating components?

Do we have the capability? If we are not planning to do so, why is that?

Definitely, I think the wish list is definitely N1. It takes time.

It took us 5 years to go from N4 to N3. It took us another 5 to go from N3 to N2.

These are long-term programs where the customers really test you out and make sure that you are really reliable supplier. You have to carry heavy insurances.

You have to do a lot of things, and which we've done right. Therefore, there's no reason why we would not want to do an N1.

We definitely are pitching, and we hope that the customers one day will buy our pitch and we can do N1 parts. That's definitely part of our wish list.

That's great to hear. Can I squeeze in one more question, please?

Go ahead.

This might be for the CFO. The depreciation is very high for our EBITDA, right?

How does the company generate cash flow? The capex, I think you mentioned in the past that the capex will come from internal accruals and debt.

If the depreciation is so high, how do we generate internal accruals? Maybe I'm not very bright here, maybe please enlighten me.

See,

we also have significant intangibles in our books to the tune of around 800 Cr. On that, we have a significant part of depreciation coming, which, though in terms of calculation appearing into depreciation, but that's more of, it's not really, really impacting our cash basically.

It's rather helping us in a way. The depreciation number which seems very high is that's largely coming because of the intangibles that we have in our books.

Our actual gross block is not that big, and I'll again stick to the same statement that we have enough cash flow which is getting generated into our business for funding our further expansion. See,

you have to understand this: Depreciation is a non-cash charge. To that extent, because there are intangibles which got created out of the merger, those intangibles and depreciation on that in some sense is actually helping the cash flow because of the tax advantage that you get on that depreciation.

It's actually helping rather than hurting.

Hi. Hello, am I audible?

Yeah. Thank you.

I just want to know as of today we are not interested in moving towards surface treatment, right? Scaling up vertically, rather we are more interested in scaling up horizontally, right?

To maintain a trade-off between ROCE or margins which you explained in previous calls. It's still that stand, or we are looking for getting into surface treatment or the margin-accretive processes?

Obviously, we were constrained also with a lot of other things where we wanted to grow top line, we wanted to grow with customers, and we had limited space in our current location. Now that we have Andhra, definitely our plans have changed.

We are discussing with all of our customers in a strategic manner to understand what will be their surface requirements over the next 5 years, heat treatment requirements, we're willing to be vertically integrated where it's needed. We're moving to a much more strategic level with the customers where they can depend fully on us as a one-stop shop and we don't have to depend for all cases outside.

Obviously, this will be done with a lot of prudence not to carry on with surface treatments where there's a lot of capacity in the country, but rather to go after those surface treatments that would build a business case for us in the next 3 to 5 years. This is definitely on the cards, and we are aggressively pursuing information from all our customers as to where we should look to invest.

Perfect. The last one, a short one, is can you please let me know what all steps we are taking to reduce the audit or clearances process for the new greenfield?

Because I think when I was reading it, it takes 2 to 3 years to get it approved from the various kind of certifications, right? If we are targeting by end of FY '27 calendar year or Q1 FY '28 kind of, we can kick off the production.

Is it feasible considering the audit and clearances will be done, or it's more on the line that we will produce the self-certified things which doesn't need external approval as such?

No, it will be a combination of things, but mostly, since this is a new plant and our customers would want us to make at the new plant because it'll have a lot of things that they will like, including sustainability, mechanization, automation. There'll be a lot of stuff that they would love in that new factory.

In fact, they will actually push for us to move our products there, it would not be something painful because the company is already approved. It's only a question of second location.

That is not a very difficult thing. If you're not approved by a company and you want to go and get approval for the first time, then it takes 2 years.

In our kind of situation, that will not be the case, so that will be managed very well and very much in advance. In fact, all of our customers already know about our plan 16 months in advance.

We're going to plan

with every customer how to do that, yeah.

Okay. Thank you, sir.

Sir, any plans to get into single crystal materials as of now?

Right now, no plans because that's not our core business. That would become a supplier for us when we need to get in there.

We'd like to start with the heat treatment, surface treatment, finishing, assembly, etc., and give a complete sort of a value-added product to our customers at this point in time.

Okay. Thank you very much, sir.

Good luck.

Thank you.

Thank you very much for the many interesting questions, and thank you for all your support for recognizing that the sectoral performance has been great. We look forward to seeing you all in the next quarter.

Thank you once again.