Raymond Q1 operating margin trails sector median despite aerospace growth
Aerospace revenue rose 40% YoY on capacity expansion, while reported profit included material other income of Rs 22.2 cr.
Filed 07 Aug 2026, 16:42 IST · after market close · Raymond Ltd (RAYMOND)
Key takeaways
- Consolidated Q1FY27 operating margin was 12.76%, 1.44 percentage points below the Industrials median across 75 reporting peers.
- Aerospace revenue grew 40% YoY, which management attributed largely to capacity expansion.
- Other income of Rs 22.2 cr was material against profit before tax of Rs 41.33 cr, making reported profit quality worth watching.
Price around the results
Operating margin remains below the Industrials median
Raymond generated consolidated operating profit of Rs 77.3 cr from revenue of Rs 605.61 cr, resulting in a 12.76% operating margin. That was 1.44 percentage points below the 14.2% median for 75 Industrials peers that had reported the quarter. The earnings bridge was narrow: interest of Rs 20.27 cr and depreciation of Rs 37.9 cr reduced operating profit to profit before tax of Rs 41.33 cr.
Other income was a material part of reported profit
Other income of Rs 22.2 cr was material relative to profit before tax of Rs 41.33 cr, so net profit of Rs 30.85 cr does not reflect operating performance alone. The reported tax rate was 25.36%, providing the relevant context for the conversion of pre-tax profit into net profit.
Aerospace growth was led by capacity expansion
Management said aerospace revenue grew 40% YoY in Q1FY27, largely because of significant capacity expansion. The company also said aerospace EBITDA margins were temporarily compressed by targeted R&D spending for revenue expansion, while margins are expected to stabilize as programmes reach steady state. Management added that supply-chain pressures were easing.
Raymond is moving further into assemblies and design-to-build work
Management said the precision technology business grew through a ramp-up in exports despite geopolitical pressures. The company said it is moving beyond individual precision components into complex assemblies, specialised processes and design-to-build solutions. Management outlined approximately Rs 430 cr of investment in precision technology and auto expansion over five years, and said a training and production facility in Andhra Pradesh was being established in Andhra Pradesh ahead of schedule.
The filing came after market close
Raymond filed the consolidated Q1FY27 results at 16:42 IST on 07 Aug 2026, after market close. This assessment therefore focuses on the reported operating performance and management commentary rather than a same-day stock response.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹606 cr |
| Other income | ₹22 cr |
| Expenses | ₹528 cr |
| Operating profit | ₹77 cr |
| Operating margin (%) | 12.76% |
| Interest | ₹20 cr |
| Depreciation | ₹38 cr |
| Profit before tax | ₹41 cr |
| Tax | ₹10 cr |
| Net profit | ₹31 cr |
| EPS (₹) | ₹3.15 |
Operating margin of 12.76% compares with a Industrials sector median of 14.20% across 75 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Aerospace revenue grew 40% year on year in Q1 FY27, largely driven by significant capacity expansion.
- The precision technology segment's Q1 FY27 growth was primarily driven by a ramp-up in exports.
Guidance & outlook
- Aerospace EBITDA margins are expected to stabilize as programmes reach steady state.
Planned next quarter
- The company scheduled its aftermarket business for rollout in Q2 FY27.
Expansion
- The precision technology and auto expansion involves an investment of approximately ₹430 crore over five years.
New initiatives
- The company is establishing a training and production facility in Andhra Pradesh ahead of the project schedule.
- The company is moving from individual components toward assemblies, specialised processes and design-to-build solutions.
Problems & risks
- Aerospace EBITDA margins experienced temporary compression because of targeted R&D investments for revenue expansion.
- The aerospace business identified supply chain headwinds, although they were easing.
- The precision technology segment maintained growth despite geopolitical headwinds.
What to watch
- Whether consolidated operating margin moves above 12.76% in the next reported quarter.
- Whether aerospace growth remains linked to capacity expansion after the reported 40% YoY increase.
- The company's reported progress on the Q2 FY27 rollout of its aftermarket business.