Expect 20-25% Growth In The Aerospace Business By Next Year: Raymond | CNBC TV18

Summary

Raymond Limited's Group CFO, Amit Agarwal, discusses the company's growth across key sectors, including real estate, aerospace, and engineering. The company is focused on expanding its real estate portfolio with several JDAs signed, contributing substantial revenue potential. The aerospace sector is poised for growth, with a target to double revenues in the next three years. Engineering business growth is expected to surpass 20%, despite global market challenges. The company is also in the process of de-merging its real estate business to sharpen its focus. Overall, Raymond is on track for strong future growth and continued market expansion.

Takeaways

• 😀 The company is evaluating 6-7 joint development agreement (JDA) opportunities, with six already signed, translating to over 14,000 crore rupees in potential revenue.
• 😀 The company expects 50% of revenue from its own land (THand parcel) and 50% from JDA projects in the coming years.
• 😀 It takes around 18-22 months to start a project after signing a JDA, with the full revenue potential realized over 6-7 years.
• 😀 The company is aiming for 20-25% revenue growth in the next fiscal year, with margin improvement as well.
• 😀 Raymond is focused on expanding in the aerospace sector, where India currently holds a small share of the $100 billion market.
• 😀 The company is expecting 25-30% growth in the aerospace business in the next year and aims to double aerospace revenues within three years.
• 😀 The aerospace growth is being delayed due to a strike by a major aircraft manufacturer, pushing revenue growth to the following year.
• 😀 Raymond is confident about achieving 20% growth in both real estate and engineering businesses for FY2026 (F526).
• 😀 The demerger of the real estate business is expected to be completed by June-July, allowing Raymond Limited to focus solely on engineering.
• 😀 Global challenges, such as tariffs and the European market slump, pose some uncertainty, particularly in the auto components sector, though growth is still expected.

Q & A

What is the estimated revenue potential from the joint development agreements (JDAs) signed by Raymond?

Raymond has signed more than six joint development agreements (JDAs), which are expected to generate over ₹14,000 crore in revenue.

How many JDAs are currently under evaluation by Raymond, and what is their status?

Raymond is continuously evaluating six to seven potential JDAs at any given time, though only one or two are finalized. These projects are part of their ongoing real estate growth.

What is the expected timeline for realizing revenue from these JDAs?

The revenue realization from these JDAs is expected to occur over a period of 6 to 7 years after the projects are signed.

How is Raymond handling the growth and timelines for its real estate projects?

Raymond aims for 20-22 months of planning and approvals before the actual project work begins. Once underway, they expect these projects to be completed faster than the typical 5-6 years, realizing full potential in 6-7 years.

What growth target has Raymond set for its real estate business in FY26?

Raymond expects to achieve 20% growth in its real estate revenue in FY26.

What is Raymond's stance on the aerospace sector, and how does it see its potential growth?

Raymond is excited about the aerospace sector due to India's growing market share in a $100 billion industry. The company expects 25-30% growth in aerospace revenue in the next year and aims to double its revenue over the next three years with high margins.

How has Raymond been affected by external factors in its aerospace business?

Raymond's aerospace business has been affected by strikes at a large aircraft manufacturer, which has delayed some of the revenue to the next fiscal year. However, they still anticipate strong growth moving forward.

What is the current status of Raymond's demerger process, and how will it affect its businesses?

Raymond is in the process of demerging its real estate business from Raymond Limited, with the demerger expected to be completed by June-July 2025. Post-demerger, Raymond Limited will focus solely on engineering, while Raymond Realty will handle real estate operations.

What is Raymond's expected revenue growth for its engineering business in FY26?

Raymond expects its engineering business, including aerospace and auto components, to grow by 20% in FY26, despite challenges in the European auto market and global tariff issues.

What impact are global market conditions having on Raymond's engineering business?

Raymond's engineering business, particularly the auto components sector, is facing some challenges due to a lull in the European market and the impact of global tariffs, making it difficult to predict exact outcomes. However, the company is still optimistic about achieving growth.