Executive Summary:
Jyoti CNC Automation Ltd. stands as a pivotal player in India’s high-precision CNC machine industry, poised for exponential growth owing to robust tailwinds in domestic manufacturing, defense indigenization, the electronics sector, and international aerospace markets. As the third-largest CNC machine manufacturer in India with a market share of approximately 10%, Jyoti CNC has strategically positioned itself to benefit from the country’s thrust towards self-reliance, import substitution, and technological advancement.
The company commands a substantial order backlog of Rs. 44.1 billion, over 2.5x its trailing 12-month revenues, offering strong revenue visibility for at least 18-24 months. Its capacity expansion plans, coupled with investments of Rs. 4.5 billion, aim to more than double production capacity to 16,000 units by June 2026, primarily targeting high-growth segments such as EMS (Electronics Manufacturing Services) and Aerospace & Defense (AD). The company’s technological innovations, including AI-driven collision detection systems and Industry 4.0 integrations, further differentiate its product portfolio.
Financially, Jyoti CNC’s revenue is projected to grow at a CAGR of approximately 30% over FY25-28, with EBITDA margins stabilizing around 25-26%. The company is expected to generate positive free cash flows from FY27 after completing capacity expansion.
Company Overview:
Jyoti CNC was incorporated in 1989 and today stands as one of India’s most reputed CNC machine manufacturers. Its product range encompasses high-precision CNC lathes, vertical and horizontal machining centers, and automated systems tailored for industries such as aerospace, defense, auto, and electronics. The company boasts over 200 product variants and an installed base exceeding 130,000 machines worldwide.
The manufacturing facilities in Rajkot and Huron are vertically integrated, with capabilities spanning foundry, machining, assembly, and R&D. The company operates nine sales and service centers domestically, supported by an extensive dealer network, along with 11 international dealers/distributors.
Management, led by CMD Parakramsinh Jadeja and an experienced leadership team, has consistently driven technological innovation, capacity expansion, and market penetration, positioning Jyoti CNC as a key beneficiary of India’s manufacturing reforms.
Industry and Market Dynamics:
Global CNC Industry Outlook
The global CNC machine market is projected to grow at a CAGR of around 10% from USD 31.6 billion in 2022 to USD 51.5 billion by 2027, driven by automotive, aerospace, medical, and industrial manufacturing sectors. High-end multi-axis machines (4-6 and above axes) are gaining preference for their precision and productivity, with growth rates exceeding 12-19% over the forecast period.
Indian CNC & Machine Tool Sector
India’s machine tools industry is the 10th largest globally, with production reaching Rs. 1.77 trillion (USD 21 billion) in FY23, growing at a CAGR of 11.5%. The industry is witnessing a shift from traditional to CNC machines, primarily driven by the need for increased productivity, accuracy, and automation. Imports, primarily from China and Japan, have declined significantly over the past decade, with domestic production increasing.
Key End Markets & Growth Drivers
- Aerospace & Defense: India’s defense equipment procurement is projected to double by 2029, with domestic manufacturing accounting for 65–70% of requirements, supported by import embargoes and indigenous manufacturing incentives.
- Electronics & Semiconductors: The government’s SEMICON India program, with a Rs. 76,000 crore budget, aims to create a USD 100-110 billion semiconductor ecosystem by 2030, fueling demand for high-precision CNC equipment.
- Automotive & Electric Vehicles (EVs): India’s EV market is expected to grow at a CAGR of 67% over FY22-29, requiring advanced CNC machinery for component manufacturing, especially with autonomous and mass mobility projects.
- EMS (Electronics Manufacturing Services): This segment requires over 1 lakh CNC machines in India over the next five years, presenting a Rs. 300-350 billion market opportunity.
Demand Drivers and Growth Outlook:
Aerospace & Defense
India’s aerospace industry is expected to grow at a CAGR of around 7% from USD 13.6 billion (2023) to USD 21.5 billion by FY30. The domestic defense manufacturing sector, which currently accounts for around 65% of procurement, is expected to double its output by 2029, with annual defense production targeted at Rs. 3 lakh crore (USD 37.5 billion). This expansion will substantially increase demand for high-precision CNC machining, especially for specialized aerospace parts.
Electronics and Semiconductors
The Indian electronics manufacturing sector is projected to grow from Rs. 1,011 billion (USD 13 billion) in FY23 to Rs. 3,50,000 crore (USD 47 billion) by FY30, with CAGR of approximately 25%. The semiconductors segment, with a current market size of USD 45-50 billion, is set to reach over USD 100 billion by 2030, driven by the government’s strategic initiatives like the SEMICON India program and private investments by Micron, Tata, HCL, and others.
Automotive and EV Ecosystem
India’s EV market, estimated at USD 3-4 billion in FY22, is poised for a CAGR of 67% over FY22-29, culminating in a market size exceeding USD 50 billion by 2030. This growth is underpinned by policies like the PLI scheme, faster adoption of EVs, and massive investments into EV manufacturing and component supply chains, all demanding high-precision CNC machines.
Electronics Manufacturing & EMS
The EMS sector is driven by growth in mobile phones, consumer electronics, and related industries, with annual demand for over 20,000-30,000 CNC machines, translating into a market potential of Rs. 60-70 billion annually.
Financial Analysis & Projections:
Historical Performance (FY22-25)
Revenue has increased from Rs. 7,465 million in FY22 to Rs. 18,177 million in FY25, recording a CAGR of 29%. EBITDA figures have surged from Rs. 727 million to Rs. 4,909 million over this period, with margins expanding markedly from less than 10% to over 27% by FY25. The net profit swung from a loss of Rs. 483 million in FY22 to Rs. 3,160 million in FY25, reflecting improved operational leverage, reduced interest costs, and stronger cash flow.
Future Outlook (FY26-28)
It is projected that revenue to reach Rs. 39.2 billion by FY28, growing at a CAGR of approximately 30%. EBITDA margins are expected to stabilize around 25-26% due to capacity utilization efficiencies and scale benefits. Free cash flows are forecasted to turn positive from FY27, supported by operational improvements and the completion of capacity expansion. ROCE is expected to improve to approximately 25% by FY28 from less than 5% in FY22/23.
| Rs. in Mn | FY25A | FY26E | FY27E | FY28E |
| Revenue | 18,177 | 24,697 | 31,227 | 39,240 |
| EBITDA | 4,909 | 6,298 | 8,119 | 10,202 |
| EBITDA Margin | 27% | 25.5% | 26% | 26% |
| Net Profit | Rs. 3,160 | Rs. 4,168 | Rs. 5,420 | Rs. 7,094 |
| EPS (Rs.) | 13.90 | 18.33 | 23.83 | 31.19 |
Valuation
Given negligible direct public comparables, we assign a forward PE multiple of 35x FY28 EPS, considering sector growth, technological leadership, and sustained margins. The current trading multiple of approximately 36x FY27 EPS suggests room for appreciation driven by capacity expansion, industry tailwinds, and technological differentiation.
Risks to the Investment Thesis:
The primary risks include a slowdown in industrial growth or delay in capacity ramp-up, which could impact revenue and margins. Increased imports from China or Japan could erode market share if local competitors fail to upgrade technology or scale operations. External factors like raw material inflation (steel, aluminum), currency volatility, and global geopolitical tensions could impair profitability. Additionally, technological obsolescence and delays in customer acceptance, particularly in high-end aerospace or semiconductor markets, pose risks.
Sector and Industry Outlook:
Global CNC Industry
The worldwide CNC market is expected to grow at a CAGR of roughly 10% from USD 31.6 billion in 2022 to USD 51.5 billion by 2027, driven primarily by automotive, aerospace, and precision manufacturing. The rising adoption of multi-axis (4-6 and above) machines will fuel demand, with such machines expected to grow at a CAGR of over 12-19%, capturing an increasing market share over the forecast period.
Indian Machine Tool & CNC Production
India’s machine tools industry ranks 10th globally, with production of approximately Rs. 1.77 trillion (USD 21 billion) in FY23. The industry is witnessing a structural shift from traditional to CNC technology, with domestic production growing at a CAGR of 11.5%. Imports, mainly from China and Japan, declined from 66% in 2010 to around 46% in 2023, with the share expected to decline further to 41% by FY27, making domestic producers like Jyoti CNC key beneficiaries.
Industry-Specific Demand Drivers:
Aerospace & Defense: India’s aerospace parts manufacturing market is projected to grow at a 7% CAGR, reaching USD 21.5 billion by FY30, fueled by new aircraft programs and government procurement policies. The defense sector aims to triple manufacturing output to Rs. 3 lakh crore (~USD 37.5 billion) by 2029, significantly boosting demand for specialized CNC equipment.
Electronics & Semiconductors: The Indian electronics industry is growing at approximately 25% CAGR, with the government’s Rs. 76,000 crore SEMICON India program catalyzing semiconductor fabrication, assembly, and testing. The domestic semiconductor market is projected to increase to over USD 100 billion by 2030.
Automotive and EV Ecosystem: India is expected to become the largest EV market globally by 2030, with investments exceeding Rs. 200 billion. The PLI scheme and E-mobility initiatives will significantly increase the manufacturing footprint, requiring advanced CNC machining solutions for batteries, motors, and vehicle structural components.
EMS & Consumer Electronics: The EMS market is expected to grow at a CAGR of around 30%, with demand for mobile phones, consumer electronics, and automotive electronics driving renewed machine orders. The requirement for highly complex, miniaturized parts favors high-precision CNC solutions.
Strategic Outlook & Conclusion:
Jyoti CNC‘s strategic focus on high-end, high-margin segments like aerospace, defense, semiconductor fabrication, and EMS positions it for sustained growth amid India’s industrial renaissance. Its capacity expansion, technological innovation, and expanding product portfolio, combined with favorable industry tailwinds, create a compelling case for investor confidence. The company’s expanding order book, technological edge, and favorable macro policies mitigate risks and set a robust growth trajectory.