Raymond Q4 Explained: Why Profits Fell But Growth Looks Strong

Added: 2026-05-06

[00:00:00]Let's get in Gautam Manny CEO at Raymond to talk to us about the quarter.

[00:00:04]Gautam welcome to the show always a pleasure to speak to you.

[00:00:07]Yes, you know the profits have dwindled this time around.

[00:00:11]Would you say this could be a one-off and how were you looking at an entry in terms of FY27 with how Q4 has panned out and with what's happening globally?

[00:00:22]So just to tell you you know it's the consolidated performance doesn't actually give you a true and holistic representation. So what I'd like to do is to focus a little bit on the two segments which are actually contributing to a more significant growth. So if you look at these segments it's basically aerospace and the automotive. Aerospace has grown you know 26% year-on-year on the revenue side and and 25% on the EBITDA side and the precision technology and auto has grown you know low double digits on the revenue and over 34% in the EBITDA side with a one-time you know profit of 13 crores. So both have actually done in spite of tariffs in spite of the wars and everything else. I would say both the segments operationally have performed very well and as per what we are expectations have been.

[00:01:10]So in that sense I would say that it's turned out to be a good year and we expect the same momentum to carry on in the next year. If you look at the aerospace story a little bit in particular you know that there's a global black backlog of 17,000 commercial aircraft which represents over a decade of revenue visibility. So honestly it's not anymore a position of your market position or market order it's more about execution. It's about how you can do this in a high mix low volume segment how you can make use of scalability and experience to take the business to another level and I think that is the critical thing because many of these businesses have huge walls and you need two years three years sometimes to get approval from these OEMs and we have over 25 global customers now and that helps us to scale the business.

[00:02:00]You know that's an interesting point that you make Gautam. So my question then is I mean the focus categorically is the engineering business now right?

[00:02:10]And you're looking at sunrise sectors like aerospace and EV components that will drive growth. So what is the estimation that you have in terms of the engineering revenues over the next two to three years? In addition to that where do you see margins and operational performance settle in or normalize from here?

[00:02:29]So basically if you have a if you if you look at the if you look at the details the the growth will continue to be in a similar fashion. We will continue to grow both the precision and automotive sector as well as the aerospace sector. In the precision and automotive sector particularly we we did a lot of work on the hybrid sector in the in the global market and we made some very good inroads there and that market has been growing. So we we we played on the right spaces in the right markets. Both revenue and EBITDA you know revenue in the automotive and precision will be in the lower teens in the aerospace will be around the 25% mark in terms of growth. EBITDA's because of operational performances getting better favorable product mixes that have happened last year and that will continue this year will also help us to keep our EBITDA margins pretty much like how they have been last year without the exceptions. So all looks good to keep the same momentum.

[00:03:30]Well Mr. Manny good afternoon thanks so much for joining in it's Puneet this side. Just a just a what you mentioned on commercial airlines and how big of aerospace could be a division. We are also seeing multiple larger players also enter within India.

[00:03:44]What's your you know right to win strategy in that sense? Is it largely just the the the execution that will drive the gains in terms of order book wins also? Is it that because the opportunity is so big that the early movers get the advantage?

[00:03:59]So the opportunity is very big. We've been in this business for 22 years.

[00:04:03]We've had the early advantage. We also started if you remember with the engine segment which is now a lot of people are paying attention to which is the more difficult segment because in the engine segment you have more complexity. You have very difficult materials like Inconel and titanium which are not easy to machine. So we took the difficult path and that's paying off now because we've been able to then get on the best global OEMs from both Europe and US as part of our customer list and that's helping us to go up the value chain quicker. It takes a long time and hence you have to be patient to grow but we've now reached a stage where you may have heard of our Andhra story where we're going to do the next phase of growth. So all of that is planned on the basis of the last 22 years of experience and now we will unleash the the future based on that relationships that we've built and the strategies that we have to go up the value chain.

[00:04:53]So just a perspective on your order book because 2,350 crores while quite strong what is the execution timeline for the same? Is it that it can go down or these orders will be executed in the next three to four years and what's the order book number that you are targeting? Is that is it essentially doubling in the next five years? Is that something that could be on the cards?

[00:05:13]So the order book will keep increasing.

[00:05:15]What happens is you typically have five year or 10 year contracts you know? So depending on when the contracts are expiring you will renewing them. But I think what is more important is the growth in those order books and those that growth happens on literally a monthly quarterly basis. This is only the current situation. With the growth that we are targeting this is expected to continuously increase at at a at a at a larger pace. As we get more complex products and longer term agreements the the order book will then see significant rise as well depending on whether it's a five year seven year or a 10 year order that you particularly do in a certain contract. So I would say this will only grow. The pace will be determined by the combination of products that you will get over engines structures systems landing gears hydraulics fuel where in all of these different areas because we are basically high precision machining.

[00:06:04]So we go across the entire platform of the aircraft.

[00:06:08]Gautam you know you know we were having this interesting conversation with regards to what's happening with EV and what's happening with hybrid in the newsroom a couple of days ago and I do remember you mentioning that hybrid market is stronger right now versus the pure EV market. If you have to look at that aspect how is FY27 actually shaping up in terms of an order book balance between the two and what's that trend that you are seeing between hybrid as well as EV?

[00:06:39]So I'll separate the marketplaces what I referred to last time was the export market purely and not the Indian market because the Indian would have a different story. The export market especially in Europe is pretty much hybrid driven now and the EVs have taken a hit relatively. They're not gone they've taken a hit. So our bet on the hybrid market has been very good. We look at the hybrid market itself growing between 10 and 15% this year for us which is quite a significant growth in that particular segment. So we are pretty bullish about the hybrid market and we are also looking now to take this to other customers that we have. So hopefully that will continue to see growth not only in Europe but also in the US.

[00:07:21]Follow up. Are you seeing a similar trend develop in India as well?

[00:07:25]I would say in India the pure EV market is pretty strong. You know India is a very price conscious market and and you know hybrid hybrid gives you a great solution for longer distances. You know in Europe and the US you need to travel much more whereas you know in the Indian cities your EV has enough battery capacity to get you through. So I would say the trend is not the same in India. I would see that see that the EVs would be more popular than pure hybrids in India but it's the other way around in the European and the US markets as per me.

[00:07:56]All right Gautam thank you so much for speaking to us at NDTV Profit always a pleasure to get insights. So that's the management of Raymond Limited citing what's in store in terms of FY27 and the trends that he's picking up so far.