Raymond shares may rally up to 30%, Antique Stock Broking says as aerospace thrust fuels growth story

Economic Times

5 days ago

Antique Stock Broking has initiated coverage on Raymond Ltd with a "buy" rating and a target price of Rs 903, implying a potential upside of 30% from the last closing price. The brokerage said Raymond's transformation into a precision manufacturing-focused company, especially its aerospace and auto components verticals—positions it for 'a multi-year period of strong growth.'
ADVERTISEMENT 'We expect Raymond to report a consolidated revenue/ EBITDA/ PAT CAGR of 16%/38%/55% with OPM of 12.2%/14.9%/15.3% in FY26E/27E/28E, respectively,' analysts Sanjeev Zarbade and Amit Shah said. The stock was trading at Rs 700.60 on Friday morning, up 0.6% on the BSE.
Raymond, once best known for its textiles business, has shed its legacy structure through a string of demergers and realignments. Following the listing of Raymond Lifestyle in September 2024 and Raymond Realty in July 2025, the company now houses its industrial businesses, engineering tools, auto components, and aerospace, under Raymond Ltd.
Antique believes this new structure unlocks significant value and operational focus. 'The aerospace vertical will be the main growth driver,' the brokerage said, with meaningful contributions also expected from the auto components and engineering tools businesses.Two specialized subsidiaries, JK Maini Global Aerospace Ltd (JKMGAL) and JK Maini Precision Technologies Ltd (JKMPTL), are being carved out to drive growth in their respective domains.
ADVERTISEMENT Raymond's aerospace strategy is built around its 2023 acquisition of Maini Precision Products Ltd (MPPL), a precision engineering firm with a client roster that includes Safran, GE, and Bosch. MPPL manufactures more than 350 components for LEAP engines, which power aircraft models such as the Airbus A320neo and Boeing 737 MAX.These LEAP engines, a joint venture product of GE and Safran, account for 55% of JKMGAL's aerospace revenue. 'India is CFM's third-largest market and LEAP engines drive 75% of India's commercial airline fleet,' Antique said. With over 2,000 LEAP engines on order and Safran opening its sixth facility in India, Raymond's aerospace unit stands to benefit from deepening supplier relationships.
ADVERTISEMENT The brokerage sees India's current 1% share in the global aerospace supply chain as a structural opportunity. Rising global outsourcing, domestic capability improvements, and the China+1 trend could significantly lift Raymond's growth trajectory.Antique's Rs 903 target price is based on a sum-of-the-parts (SOTP) valuation, factoring in a 25x multiple for the aerospace business and 15x for the auto components vertical, adjusted for 66% holding. The brokerage said it expects Raymond's net profit to rise from Rs 520 million in FY25 to Rs 1.92 billion in FY28.
ADVERTISEMENT While return ratios are currently modest due to Rs 8.8 billion in goodwill and intangibles, the brokerage said these 'should not concern investors unduly,' citing strong cash flows and a net cash position of Rs 2.2 billion.The aerospace division's EBIT margins are expected to remain at 20% by FY28, while the company's consolidated EBITDA margin is forecast to improve from 12.2% in FY26 to 15.3% in FY28.
ADVERTISEMENT Raymond shares have rallied 16.6% year-to-date in 2025 and 29% over the past three months, buoyed by investor optimism around its post-restructuring focus. The stock has climbed 16.8% in just the last month.
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