Synopsis: EBITDA margins contracted by 140 basis points and pre-exceptional PBT fell 20 percent year-on-year, raising questions about the operating leverage story the company has been building.
Shares of a leading engineering conglomerate came into focus on Tuesday after the company announced its audited financial results for the quarter and full year ended March 31, 2026. The results mark the first complete fiscal year in which the company operates purely as an engineering business, having completed the demerger of its real estate undertaking into Raymond Realty Limited with effect from May 1, 2025.
With a market capitalization of approximately Rs. 3,042.42 crore, the shares of Raymond Limited were trading at Rs. 456.8 per share, up 3.13 percent from its previous closing price of Rs. 442.95 apiece. The stock is trading at a P/E of 51.65.
Consolidated revenue from continuing operations grew 13.6 percent year-on-year to Rs. 2,212 crore in FY26, up from Rs. 1,947 crore in FY25. EBITDA held flat at Rs. 335 crore, but the margin contracted to 14.5 percent from 15.9 percent in the prior year. The compression came primarily from the fall in other income which dropped 37 percent to Rs. 100 crore rather than from cost deterioration within core operations.
Stripping other income out, the underlying business was broadly stable. Pre-exceptional profit before tax fell to Rs. 99 crore from Rs. 123 crore, a 20 percent decline, and exceptional items, principally the stamp duty liability from the engineering restructuring scheme and the impact of new Labour Codes, added a further Rs. 201 crore charge for the year, pushing the company to a consolidated pre-tax loss of Rs. 105 crore from continuing operations.
In Q4 FY26, revenue from continuing operations rose 8 percent year-on-year to Rs. 603 crore. Quarterly EBITDA came in at Rs. 85 crore at a 13.9 percent margin, a notable contraction from 16.4 percent in Q4 FY25. The Precision Technology and Auto Components division generated Rs. 442 crore in revenue for the quarter, up 4.9 percent, with EBITDA margins expanding sharply to 15.2 percent from 12.7 percent, a function of operating leverage as scale improved.
Aerospace and Defence delivered Rs. 119 crore in Q4 revenue, up 11.5 percent, with EBITDA margins steady at 25.5 percent. For the full year, Aerospace and Defence revenue was Rs. 392 crore, up 26 percent from Rs. 311 crore, while EBITDA grew 25.3 percent to Rs. 88 crore. Precision Technology posted FY26 revenue of Rs. 1,667 crore and EBITDA of Rs. 223 crore, a 34 percent increase, though the company disclosed that approximately Rs. 13 crore of this came from a non-recurring land sale in Q2.
Balance Sheet and Restructuring
Raymond ended FY26 net-debt-free, with a net cash surplus of Rs. 68 crore. Total borrowings on the consolidated balance sheet stood at Rs. 99,851 lakhs, against cash and liquid investments providing adequate headroom. The corporate restructuring during the year was substantive: the engineering subsidiaries; JK Files and Engineering, Maini Precision Products, Ring Plus Aqua, JK Maini Precision Technology, and JK Maini Global Aerospace were merged and reorganised under an NCLT-approved scheme effective July 31, 2025, reorganising the segments into Precision Technology and Auto Components and Aerospace and Defence.
Goodwill of Rs. 16,740 lakhs associated with a deferred tax liability on Maini Precision’s acquired intangibles was reversed as an exceptional item once the scheme went through. Stamp duty on property transfers under the scheme added Rs. 2,650 lakhs as an additional exceptional charge in Q4.
Business Overview
Incorporated in 1925, Raymond Limited is listed on both BSE (scrip code 500330) and NSE (symbol: RAYMOND). Having divested its lifestyle and real estate verticals through successive demergers, the company now operates two engineering segments: Precision Technology and Auto Components, and Aerospace and Defence.
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