Raymond Ltd (NSE: RAYMOND) Q3 2026 Earnings Call dated Jan. 27, 2026
Corporate Participants:
Unidentified Speaker
Gautam Singhania — Chairman and Managing Director
Analysts:
Manish Velacha — Analyst
Bala Subramanian — Analyst
Vishal Prasad — Analyst
Sanjeev Zarbade — Analyst
Rupesh Tatya — Analyst
Kaushal Sharma — Analyst
Khushi — Analyst
Presentation:
operator
Conference. The conference is now being recorded.
operator
Ladies and gentlemen, good day and welcome to the Raymond Limited Q3FY26 earnings conference call hosted by Anandrati Share and Stockbrokers Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Velacha from Anandraathi Share and Stockbrokers Limited.
Thank you. And over to you.
Manish Velacha — Analyst
Thank you. I would like to welcome all the. Participants in Q2, FY26 and nine months FY26 conference call of Raymond Limited. Today we have with us from the senior management of Raymond Limited Mr. S.L. pokarna who is the President Corporate Commercial. He’s a special invitee. Mr. Rakesh Tiwari, Group Chief Financial Officer. Mr. Gautam Mani, M.D. engineering Business. Mr. Naveen Sharma, CFO Engineering Business. And Mr. Sunny Desa, Head Investor Relations. Without taking further time, I would like to hand over the call to Mr. Gautam Meni. Over to you, Gautam.
Gautam Singhania — Chairman and Managing Director
Thank you, Manish. Good evening everyone. Thank you for joining us today for our Q3FY slide 26 results conference call. On behalf of the entire management team I would like to take a moment to wish you all a very happy Republic Day. We hope you had a meaningful and inspiring celebration. May the spirit of unity and patriotism continue to guide us as we work towards a brighter and more prosperous future. I hope everyone can hear us. I can hear a sort of a buzz at the background so I hope I’m audible. Can you just confirm that?
operator
Yes, sir.
Gautam Singhania — Chairman and Managing Director
Yeah, there’s a lot of buzz in the background so I just hope I’m out of the way, that’s all. Wishing you and your families continued peace, progress and pride in our great nation. Chai Hind. I hope everyone has had an opportunity to go through our financial results and investor presentation which have been uploaded on the stock exchanges as well as on the company’s website. Moving ahead, let me start by talking about the broader macroeconomic economic landscape that has influenced our performance and strategic decisions. India’s economy continued to demonstrate resilience in Q3 of FY26 with GDP growth now estimated at 7.3% for the full fiscal year up from earlier projections of 6.8%.
This upward revision reflects a better than expected outturn in the third quarter driven by robust domestic consumption, structural policy reforms and strong industrial activity. The manufacturing PMI remained elevated averaging around 56.9 indicating sustained expansion in factory output and healthy demand conditions. The automotive sector posted a record setting quarter with festive season tailwinds, GST 2.0 benefits and the rural economy refueling, double digit growth in two wheelers, commercial vehicles and a sharp rebound in passenger vehicles. Export momentum remains strong particularly in three wheelers and passenger vehicles. Despite ongoing challenges from US Tariffs, the aerospace sector also maintained its growth trajectory supported by defense led demand localization efforts and increased sourcing from Indian suppliers by global OEMs such as Airbus and Boeing.
These OEMs ramped up aircraft deliveries amid easing of supply chain constraints while inflationary pressures in key materials like inconel persisted. Geopolitical tensions added uncertainty. India’s aerospace and manufacturing base remained stable and increasingly strategic. Overall, Q3FY26 underscored India’s growing role in global supply chains and its emergence as a hub for precision manufacturing and export led growth. We come to the performance Raymond limited continued its growth momentum delivering and delivered a robust quarterly performance reporting a total income of 580 crores reflecting an 18% increase compared to the same quarter of the previous year while EBITDA stood at 83 crores and an EBITDA margin of 14.3% in Q3FY26 versus a total income of 493 crores in Q3FY25 delivering an EBITDA of rupees 65 crores with an EBITDA margin of 13.3 in Q3 of FY25.
Building on previous momentum, our performance this quarter continues to be anchored by aerospace and defense and precision technology and auto components divisions. This reflects the deepening integration of Indian suppliers into the global high tech values supply chain. We are seeing a sustained trend of domestic vendors transitioning into production of sophisticated subsystems and complex decision components which has maintained a robust order pipeline for OEM tier 1 and tier 2 export partners. During the nine month period, total income stood at 1,699 crores in nine months FY26 which is a 13% year on year growth from 1504 crores in the nine months of FY25.
EBITDA stood at 250 crores in nine months of FY26 compared to 237 crores in nine months of FY25. The EBITDA margin stood at 14.7% in the nine months of FY26 versus 15.8% in nine months of FY25. While operational performance remains strong, EBITDA margins faced temporary pressure due to a reduction in non operating income. Going forward, we continue to remain optimistic about the future’s growth trajectory given our expansion strategy in new product categories and new geographies. Let’s come to the segmental performance and we’ll take the aerospace business first which is short formed as jkmgal which is JK Mini Global Aerospace limited At the segment level the aerospace and defense business reported robust performance with a revenue of 105 crores indicating a 48.9% year on year growth and an EBITDA of 19 crores indicating a 39.4% year on year growth and an eBITDA margin of 18.6 in Q3 of FY26 versus revenue of 70 crores and an EBITDA of 14 crores with an EBITDA margin of 19.8% in Q3 FY25 in the nine months of FY26 this segment generated 273 crores in revenue up 33.6% year on year growth from 204 crores in the nine months of FY25.
EBITDA also grew by 34.2% year on year reaching 57 crores compared to 43 crores in nine months of FY25. The EBITDA margin stood at 20.9% in nine months FY26 versus 20.8% in nine months FY25. This performance was anchored by two strategic factors which increased production requirements from a leading OEM and Tier 1 and the product portfolio expansion. The current demand environment remains favorable providing a stable foundation for future expansion. This is evidenced by a steady increase in the request for quotations and active exploration of new collaborative ventures with global partners. While internal growth indicators remain strong, the near term outlook is currently influenced by external macroeconomic factors, specifically global trade pressures steadying from US Tariffs.
These have introduced some logistical complexities and results in some temporary scheduling delays across the industry. Let’s go on to the Precision Technology and Auto Components business which is short form JKMPTLs and stands for JK Mini Precision Technology Limited at the segment level here the Precision Technology and Automotive components reported a revenue of 417 crores which is up 14.9% year on year growth with an EBITDA of 57 crores with a growth of 50.6% year on year growth and an EBITDA margin of 13.7% in Q3FY26 versus revenue of 363 crores with an EBITDA of 38 crores and an EBITDA margin of 10.4% in Q3FY25.
In the nine months FY26 this segment generated 1225 crores in revenue up 12.2% year on year growth from Rupees 1091 crores in nine months of FY25. EBITDA also grew by 37.8% year on year reaching 156 crores compared to 113 crores in nine months of FY 25. The EBITDA margin stood at 12.7% in the nine months of FY26 compared with 10.4% in the nine months of FY25. The EBITDA margin improvement was on account of higher sales volumes, favorable product mix and includes a one time gain of 13 crores from the land sale in Q2 of FY26.
We continue with our strategy to expand into new international geographies and industrial sectors. We are observing business momentum across domestic and international markets supported by China plus one strategy integration synergies and focused operational efficiencies across all segments. Let’s talk about the debt and cash position at Raymond Ltd. We continue to remain a debt free business with a net cash surplus of 214crores in December 2025. Looking ahead, Raymond is well positioned to sustain its growth trajectory in Q4 of FY26. Building on the strong foundation laid in previous quarters, we anticipate continued momentum in global customer onboarding with several strategic programs progressing from RFQ to contract finalization.
Successful audit outcomes consistent FAI R which is the new product development approvals have reinforced Raymond’s reputation as a reliable and quality driven partner in the aerospace and precision engineering sectors. To meet rising international demand, Raymond is actively expanding its manufacturing footprint. The commissioning of advanced machinery including high precision multiaxis machines like the Grob machines is enhancing production capability and enabling the company to take on more complex high value projects. These investments are also supporting faster turnaround times and improved quality assurance critical for aerospace and defense customers. The business is witnessing a surge in RFQ activity particularly in aero engines, landing gears and structural component segments.
This is complemented by growing interest from global OEMs and tier one suppliers who are increasingly looking to India for supply chain diversification. Raymond is capitalizing on this trend by entering multi year strategic supplier agreements that go beyond build to print encompassing co design and value engineering collaborations. With a strong order pipeline, robust operational readiness and a clear focus on innovation and customer engagement, Raymond is Poised for a strong finish to FY26, the company remains committed to scaling exports, deepening global partnerships and reinforcing its position as a trusted position with manufacturing hub. Thank you again for joining our call and we’ll be happy to take your questions.
We may now open the line for questions.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press Star and two participants. You are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue sembles. The first question is from the line of Bala Subramanian from Arihan Capital. Please go ahead.
Bala Subramanian — Analyst
Good afternoon sir. Thank you so much for the opportunities. Sir, my first question. Our 60 percentage of Europe Aerospace business comes from Europe and 30 percentage of auto and precision technologies business comes from Europe. I think currently Europe and India. Some of the deals are in advanced stages. They are talking about matter of all trade deals. So like I just want to understand how we are benefiting for upcoming days.
Gautam Singhania — Chairman and Managing Director
Yeah, sure. So we are in strategic. Obviously we can’t take names but we are in strategic discussions with several of our customers in different spheres. You know we are leading on the engine segment area. So we have several customers there. We are discussing with. We’re looking at large strategic play with them. But obviously you know aerospace is a very long term business with agreements ranging from 5 years to 10 year contracts. These also take a long time to rectify. So there’s a lot in the pipeline. But we can see that the pipeline has increased, the number of discussions have increased and therefore we see a good strategy ahead of us to conclude long term deals.
Bala Subramanian — Analyst
Okay sir, so I need to understand about our expansion as well as working capital side. I think we are talking about 100 crore annual capex for aerospace as well as 100 crore annual capex for auto and precision technology. How the funds will be deployed. Like especially it’s especially capacity expansion or replacement or capability enhancements. How do you understand expansion side and if you could elaborate more on working capital side for your space and auto and precision technologies in detail.
Gautam Singhania — Chairman and Managing Director
Yeah, I mean in the end you know you have a lot of opportunity and the investments obviously depend on the opportunities that you see. So it is always going to be a combination of investments. It’s never going to be one. One will be to enhance our future ability to get more complex parts. There are expansion plans for which you need investments. There is maintenance capex because you already have a lot of machines that are there. You have you know to upgrade your IT software etc. We’re also looking for an expansion process where we need to create more facilities.
So I would say it’s a combination of everything. It’s not any one thing. Obviously where we spend and how much we spend will ultimately again depend on which contracts we finally get. But yes we are hopeful that there is a pipeline and therefore we will be able to grow the business with those investments. So we are generating enough cash, you know debt and other options are also there. So therefore we will be, you know we will be able to fund ourselves. Yeah, I’ll ask Naveen to address the working capital as in terms of working capital also.
Well we are making decent amount of free cash flow which shall be able to fund our working capital and then of course you know, because we are export oriented business so there are packaging credit lines which are available which shall be able to help us. And as the operating leverage increases we are also seeing impact of working capital cycle getting reduced.
Bala Subramanian — Analyst
Okay sir, so my last question, I think our space Your share is 21% and the precision technology and auto component side 10% of your share. How this like us part is hurting us in terms of margins and how do you look at the business next over to medium or the medium term time frame. And secondly sir exception light of 14 crore, it’s related to labor code implementations.
Gautam Singhania — Chairman and Managing Director
So let me, let me get you the first thing on margin. So clearly you saw the margins significantly improve on the automotive and precision technology. Clearly we are improving those margins. There’s a lot of activity going on on efficiencies, there’s a lot of activity going on on synergies between the companies which we put together, you know and therefore you will continuously see that trend that you’ve seen. So that is one side of the story which you asked. In terms of aerospace we’re growing at a very fast pace and we’re doing a lot of new product development.
So there’s not a, there’s no percentage margin expansion but increasing significantly simply because we are growing the top line very high and we write off all development work done on these new products. So in terms of efficiency and margin expansion I would say both automotive and aerospace are on a very good track and there is momentum building up after the companies have now come together, the teams have been formed and therefore and we know we’ve adopted like SAP, HANA is coming into play. So all the system and the hard work that we did over the last one month and a half years are slowly playing out and helping us to increase these margins.
On the second aspect, I’ll have Naveen answer that. That 14 crore. Yes. That’s on account of labor related one time impact that we have.
Bala Subramanian — Analyst
Okay sir. Thank you. All the best.
Gautam Singhania — Chairman and Managing Director
Thank you.
operator
Thank you. The next question is from the line of Vishal Prasad from VP Capital. Please go ahead.
Vishal Prasad — Analyst
Hi, good evening Gautam. I have few questions. I still remember when I first saw River. I thought it was a very small car and it may not be comfortable at all. What I didn’t realize was that river also was the head of its time. Now this time around, our aerospace business is at the right place at the right time. What baffles me is that there was a really roaring bull market going on and companies without much capability were listing at exorbitant valuations. If it was the fund you needed for self or business listing, the company would have provided whatever cash was required for you or the company.
Yet you decided to sell it majority staked at 10 times valuation. So could you share your thought process behind not going the IPO way and rather choosing the. Rather choosing to sell your crown jewel to another company?
Gautam Singhania — Chairman and Managing Director
Yeah. Okay. So yes, you’re right. We’ve always been ahead of time. Whether it was Reva or Aerospace. We have been first movers. Maybe Reva, we are too early in Aerospace also is working to our advantage now. We were very early. We’re 22 years in the business now. Of course we built it step by step. Coming to the question you had is that we had a timeline to exit some of our existing shareholders. And at that time the market wasn’t really at the perfect time. And I felt that now a partnership with a larger company could give us that same growth before we find the right time to list.
So you know, as far as I’m concerned, the goal is to build a very strong company with very strong credentials and growth and a strong partnership which we can take it to the next level. And then, you know, whenever the time is right, you know, we would, we would, you know, come to the market. So I don’t see an issue with that. And I think that we’ll probably come up even stronger because of our. The way we are growing and the way the markets are, I’m hoping that will come out even stronger. Right.
Vishal Prasad — Analyst
So I’m sure many would have come forward to partner with you. But still you choose Raymond to partner with. So what was the thought behind partnering with Raymond?
Gautam Singhania — Chairman and Managing Director
Well, you know, I mean there was A lot of options on the table. And we felt that there was a complementing partnership with Raymond. And in any partnership, the two partners should complement each other. At Maine, I brought the complete frugal approach of how to build businesses from scratch. We built aerospace from zero. So we have that experience of frugal engineering, how to build the companies, how to go in the global scale. We had relationships with 25 different OEMs all across the world. So we built a very strong base, which we are very good at doing.
Raymond brought us the bandwidth that we didn’t have of understanding listed markets, understanding mergers and acquisitions, and seeing how we can actually scale the business. So in that sense, it was a good partnership approach where I continue to be the managing director to run the business with all the strengths of a smaller company, but with a vision of a large company. So I’m sure something big can come out of that. Right.
Gautam Singhania — Chairman and Managing Director
See, there are lots of. Can you hear me? Yeah, from Raymond. So there are lots of considerations which go behind the transaction. I don’t think so this is the right forum to get into why we did what we did. There are lots, lots of reasons why what Gautam did, lots of reasons why what Raymond did. You know, obviously what we bring to the table clearly is a much larger scale possible for this business. And those are the kind of conversations we are having at this stage. There are lots of doors that have opened for the aerospace business ever since Raymond stepped into it.
You will see the fruits of those doors that have been opened over a period of time. Because fortunately or unfortunately in engineering business, nothing happens from today to tomorrow as we see three to five year journey, we feel very confident about this business prospects, you know, so I think at this stage we should leave it at that. If you have any specific questions, you can do it separately.
Vishal Prasad — Analyst
Sure. So one final question. So I went through all the process that we have of the calls as well as invested that date that we have done. And there were different figures about how much is the kit value that goes into each of the aircrafts. And it ranges between $20,000 to $35,000. So on an average, if I have to look at the cat value. Could you please help me with that? It is 35. It is 20 or something else.
Gautam Singhania — Chairman and Managing Director
Well, you know, it changes every day. We are developing more than one new part every day. Right. So if you have to have a static information, you know it’s going to be a moving target. Right. Because every quarter we would add several products to that game. So at the moment, you know, you can say that on an estimate it’s about 0.2 to 0.3%. Right. But closer to maybe 35,000 as we look at. But that’s in one case, right? We have so many customers and so many faces and so many part numbers. You know, aerospace business is not in, is a low volume, high mix business.
So the ability to transform that business is how many new parts you can make, how you can scale that business. And that’s what we’re trying to do is to be the market leaders in the number of parts we make and how to transit that and get more business opportunities for ourselves. I hope that I could have answered your question.
Vishal Prasad — Analyst
Yeah, sure. Thank you. Thank you.
Gautam Singhania — Chairman and Managing Director
So since the share is extremely low, the opportunity is obviously large. Just to conclude, right, so this is.
Vishal Prasad — Analyst
Going to increase the time in five years, can we double the size of whatever we are supplying to? I mean, in each aircraft? Is that the way to look at can be anything?
Gautam Singhania — Chairman and Managing Director
Because it depends, you know, in the end, you know, it depends on how you can make parts and how you can develop. But yes, there’s a huge opportunity, a huge potential and it’s up to us to make full use of that potential. Sure.
Vishal Prasad — Analyst
Thanks, Manish.
operator
Thank you. We have the next question from the line of Sanjeev Zarbade from Antique Stockbroking. Please go ahead.
Sanjeev Zarbade — Analyst
Yeah, Am I audible? Yes, thank you, sir. And much improved operating performance this time. Congratulations to the team. Sir, if you could elaborate on the production ramp ups at the OEMs, Aerospace OEMs and Tier 1 customers that we are actually witnessing and what could be the potential from here? How should we read that?
Gautam Singhania — Chairman and Managing Director
Yes, I mean things have been improving globally. Boeing is back and they are producing at very high levels. So I think the trend is very good. Although we’ve still not reached pre Covid levels. So which means the potential is even higher. Clearly the supply chains are getting better and therefore the opportunities are improving because as the inventory is being eaten up, the opportunities are opening up. We are seeing also the same effect of schedule changes where we suddenly get increased schedules because the inventories are starting to get depleted. So I would generally say that inventories are much lower, production is much higher, OEMs and this gives us huge opportunities to get more market share and to be able to deliver if we are ready.
And therefore, if you have all the raw material and you can turn around the production, which is what we are trying to invest for, then you can take advantage of the current situation and grow faster.
Sanjeev Zarbade — Analyst
Right, sir. And I believe we have taken Some additional expenditure this time to ramp up production in the aerospace division. And would we need to take further expenditure in the coming quarters as the demand ramps up?
Gautam Singhania — Chairman and Managing Director
Yes, I mean we will continue to invest as the demand increases. We have a very good visibility because we have a very strong pipeline and we have a lot of FAIs, which is the new product development in our pipeline. So depending on the speed at which we are developing these new products, we almost on a monthly basis see what kind of capacities we need and we plan for those capacities. So this is an ever changing game and one has to be dynamic about it and make sure that you’re continuously ready to invest in the right equipment and machines and people in a very frugal and quick manner to take advantage of the changing situation.
Because in the end, you know, if there is an engine to be made, there are thousands of parts that go into the engine. Even if one part doesn’t reach the customer can’t assemble the engine. So there’s always an opportunity that in an emergency the customer could come to you saying that the other supplier hasn’t supplied. Can you supply? So if you are ever ready, your chance of gaining market share temporarily and permanently growing, the business is much higher. And that’s the position we want to be in.
Sanjeev Zarbade — Analyst
Right sir. And just one or two more questions. Are we seeing any increase in prices of materials like Inconel and aluminum because of the rising demand from the aerospace sector? And how do we plan to manage that?
Gautam Singhania — Chairman and Managing Director
Well, there is a. First of all, you know, in all of our contracts the materials are written by the customer contract. So which means if Inconel goes up, the prices go up. If Inconel goes down, the prices go down. Having said that, there is a pressure to localize materials which will then ultimately come to a lower level in the long run that will put India on a more competitive edge. It may be a two year landscape, but which means that the competitive landscape will only get better for India as a country. Until then, as a customer, we really don’t see any issue on the material because it is either paid and if it goes down we have to pass it back.
So it’s a complete pass through both ways.
Sanjeev Zarbade — Analyst
Yes sir. Just last one question from my side. Where do you see the potential EBITDA margins in these 2 divisions, auto and aerospace? We’ve done around 14% EBITDA margin, auto now, now and around 18 to 20% in aerospace. Where do you see the 2, the margins of these 2 divisions in the next 2 to 3 years potentially?
Gautam Singhania — Chairman and Managing Director
Well, I think you know, there is definitely a margin expansion happening due to efficiencies which will show up. So I think in the arrow, you know, we could look at 23 to 25% in the long run and in auto we could definitely break the 15% barrier and aim towards a higher rate on a, on a yearly basis. So I think in both areas we will see margin expansion due to all the activities that we have done in the last year and a half, taking advantage of all the synergies, taking advantage of scale, taking advantage of operating benefits and improving efficiency and improving cost.
Sanjeev Zarbade — Analyst
Thank you very much and all the best.
operator
Thank you. We have the next question from the line of Rupesh Tatya from Long Equity Partners. Please go ahead.
Rupesh Tatya — Analyst
Hello sir. Thank you. Thank you for the opportunity and congratulations on fantastic set of numbers. My first question sir on aerospace is, I mean there was a fantastic growth in this quarter. So what led to this growth and is it sustainable? Can we assume this is now the run rate going forward? Because aerospace business generally doesn’t fluctuate much.
Gautam Singhania — Chairman and Managing Director
No, you’re absolutely right. These are all 5 year contracts, 10 year contracts, long term businesses and the fact that you develop new products on a daily basis, the fact that you increase your market share from 35 to 65 when you do a good job. So all of these are working in our favor. And the overall market is also growing as well as there are issues with the supply chains in Europe and in the US the China plus one is playing out. So I would say overall the environment is very good for the growth of aerospace business and it’s up to us to make sure that we take full advantage of it.
So we will definitely have to keep a robust trend. The opportunity is there and we believe we will deliver the results that are being shown will continue to be in a positive direction.
Rupesh Tatya — Analyst
Okay, and second question sir, is this leap engine, whatever parts you supply for the leap engines, what kind of market share do we have in the parts that we supply?
Gautam Singhania — Chairman and Managing Director
So just to give you an example, you know when we start off, you start off with normally a 35% market share because the customer wants to test you. They want to see if your quality is good. They want to see if you’re reliable. You have a hundred percent delivery on time status and then they generally move you to a 65% market share. So over a period of time, more than 50% of our parts have already moved to a 65% market share which shows that the customer is happy with us, they’ve increased market share, et cetera and that comes over a period of time.
And I think the expertise over the last many years shows us that if you do a good job, you simply get higher market shares, you get more business, you get more RFQ pipeline. So this is a business where you have to show performance and that’s what we need to keep doing month after month.
Rupesh Tatya — Analyst
Okay, and at what rate leap engine production is growing? I read some media articles, number vary between 15 to 20%. But that is a fair. Inference that leap engine production 1A, 1B, 1C is growing at 15 20%.
Gautam Singhania — Chairman and Managing Director
Yeah, I think they’re growing at 15, 20%. What is important is that you see the LEAP engine. Let’s talk about 1A. The Leap 1A is, is directly linked to the Airbus programs. That’s why it’s called 1A. Right. So Airbus 320neo and certain other programs are now introducing that. So you can directly link it with the number of those aircraft that’s going up, which you can see with Airbus, the Boeing 737 Max uses 100% of Leap One Leap. So every plane that going 737 Max cells, you have two engines of Leap on it. So there’s a direct correlation to the growth in the number of engines.
So I would say while Leap 1A is growing between 10 to 15%, Leap 1B is growing between 15 to 20%. Because Boeing has recovered now to almost a run rate of 42 right now. So that is helping the Leap 1B.
Rupesh Tatya — Analyst
Okay.
Gautam Singhania — Chairman and Managing Director
While there are many common parts on Leap 1A and 1B, there are also certain specific parts. So we get the benefit of being on both those engines. Okay.
Rupesh Tatya — Analyst
And can you talk about some opportunities outside of leap engine program? Anything that can, you know, become like 100, 200 crore kind of revenue source for us in medium term?
Gautam Singhania — Chairman and Managing Director
Well, you know, I can’t name them, but clearly we are discussing those opportunities. Like I said, we have five to six strategic partners on the engine side and we have approvals from them. So therefore those discussions will carry on. Like I said, aerospace takes time. A lot of things we did two years ago are bearing results now. So therefore a lot of things we did one year ago still needs to bear results. So it’s a continuous process and one must be invested in the process in the long term and in those relationships. And I’m sure you will see that those will pan out over a period of time.
So all I can say is that we are very much invested in those relationships. We are invested in those steadily discussions and things are really going in the right Direction for us.
Rupesh Tatya — Analyst
Okay. Okay. And then my final question is, I mean Raymond Group has done a great job in value unlocking. I think Jatin also is on the call and you also welcome. So any timelines that we can pencil in for value unlocking in the current Raymond Ltd. When can we see the aerospace business listed certainty. When can we see the auto automotive parts business listed separately? Any timelines you have in mind?
Gautam Singhania — Chairman and Managing Director
Jatin, do you want to take this question? Jatin, are you there?
Unidentified Speaker
Yeah, I’m there. Can I be heard?
operator
Yes, you can be heard.
Unidentified Speaker
Okay. Okay. Yeah, I’m saying that so it’s a bit premature at this stage to talk about unlocking these two businesses because both of them have to get to the right scale before we think of unlocking. But clearly it’s something which is very much we’ve demonstrated and delivered in the past. So to that extent you should be rest assured that at the right time this will get done. We are currently in the build out phase so have some more patience is all I can say at this stage.
Rupesh Tatya — Analyst
But what are the milestones? Can you give me like top two milestones in both the businesses that you are looking to achieve before you unlocking?
Gautam Singhania — Chairman and Managing Director
No, I’ll tell you there are a bunch of things you have to be very clear on. I mean I think the first thing to my mind is that this whole tariff thing, uncertainty, etc. Which all of this has to settle down, businesses have to stabilize because at this stage business performance tends to be volatile in this ever changing environment. I guess that’s sort of one to my mind which is very critical. The second milestone to my mind which is, you know, critical is that you know, we have to realize the benefits from Andhra because you know that investment that we are making that has significant cost advantage that brings to us now whether we pocket that cost advantage into a margin expansion or we use that to build more business.
So that’s another big lever of growth that is available for the business for the future. I guess some of that. So that’s there then obviously there has to be a critical scale of EBITDA and some of those things. So I mean it will be too premature at this stage if I get into specifics. So bear with us for a while. I mean we know that this is something which we’ve done it before. So needless to say it will happen at the right time again.
Rupesh Tatya — Analyst
Okay. Okay. Thank you. Thank you for answering my questions.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management will be able to address all the questions from the participants in the conference call. We request you to kindly limit your questions to two per participant. If you have a follow up question, please rejoin the queue. Again we have the next question from the line of Kaushal Sharma from Equinox Capital Venture Private limited. Please go ahead.
Kaushal Sharma — Analyst
Hello.
Gautam Singhania — Chairman and Managing Director
Hi sir.
Kaushal Sharma — Analyst
Very good evening. Am I audible?
operator
Yes you are.
Kaushal Sharma — Analyst
Yeah. So my question is on your capex. Like we are making a huge investment in Andhra, around 1000 crores. So what is the split of this capex across our key segments and our asset and our revenue potential out of it and how long will it take to operationalize going ahead?
Gautam Singhania — Chairman and Managing Director
Yes. So basically obviously we’re trying to grow. Like Jatin mentioned the Andhra Pradesh story over the next five years. Basically we are looking at about 500 crores in aero and about 430 crores in auto. So that’s over a five year period. Clearly like Jatin said, we’re going to expand, you know, we’re going to grow in these areas. It’s a good cost base for us. So we will. We are looking at more positive business coming into these areas and much more strategic levels of both size and type. So therefore we are engaged in many conversations and we hope that we’ll be able to make a successful business there.
Kaushal Sharma — Analyst
And so what is current existing revenue potential from our existing capacity in both the key segments and what is capacity utilization in both the segments?
Gautam Singhania — Chairman and Managing Director
So basically capacity utilization varies from plant to plant. You know we built a new plant in Sinhar in January. We have space there so that will be filled up. We have some capacity available in different plants. So we are optimizing capacity and building capacity as we speak. The goal is that by the time we use up our capacity we are able to have Andhra ready. So we work backwards from there to make sure that our growth doesn’t slow down nor does it stop. But in fact so to that.
operator
Sorry to interrupt in between. Your voice is breaking.
Gautam Singhania — Chairman and Managing Director
Okay, so can you hear us now?
operator
Yes sir.
Gautam Singhania — Chairman and Managing Director
Okay, so so basically you know, I guess I would have answered your question.
Kaushal Sharma — Analyst
Yes sir. And my last question is on your aerospace site. Like how much? Like we are making a very complex engine part. So how much does it contribute in overall engine cost and are we planning to launch further products which contribute higher cost in this area and what is overall time?
Gautam Singhania — Chairman and Managing Director
So you have to understand, you know we make parts for. Although we make a lot of parts for the leap engine but we are probably on at least 15 different engine programs. So the sizes vary, the types vary. They are from large engines to small Engines, we are on several platforms. We want to make sure that we are on most platforms. So whichever aircraft sells and their engine sells, we need to be on that platform. So we have two, three attempts. One is continuously increase the number of parts that we have super platform. And secondly increase the percentage of market share from our side.
So these are the two things that we will aim to do. And while we have a very diversified portfolio, it helps us to neutralize the market in many ways. Because if certain large engines suddenly have a boom or a large order, we are part of that. And as long as every part of the aircraft engines is growing, we go with them. So goal is to be on several different engines, but focus also on the high volume engines like the LEAP program and the GTS.
Kaushal Sharma — Analyst
You said is it 15% of overall engine cost that it contributes?
Gautam Singhania — Chairman and Managing Director
No, no, we are hardly point one to 0.3%. So that gives us massive potential. We are very small part of that engine.
Kaushal Sharma — Analyst
And sir, could you please explain the receiver and inventory cycle in both these segments? What is the sustainable levels like receivable days and inventory days in both the auto and our aerospace segment?
Gautam Singhania — Chairman and Managing Director
I’ll give you the concept and maybe Naveen can give you some exact information, whatever is possible. But at a conceptual level, you have to understand in the aerospace business, the raw material is the biggest concern because you do not get raw material at short notice. And all the mills have very long lead times. So if you don’t have a very good planning cycle, if you don’t have raw material inventory, then it becomes difficult to grow the aerospace business when an opportunity comes by. And we’ve seen many of those come by. So the first thing is the raw material in aerospace has to be heavy, whereas the finished goods doesn’t have to be a lot.
Although customers mandate that we must have a safety stock of at least 30 days with us and we must ship from stock. But the actual delivery time to the customer is only 7 to 10 days because all of aerospace is sent by air. On the flip side, if you look at the auto component business, we do a lot of business to third party warehouses. So it takes between 65 and 90 days to reach the warehouses. Then you need to keep a safety stop of maybe 30 days, then you send it to your customers. So in automotive it’s the opposite way, where your raw material would be less and work in progress, but your FG would be very high simply because of the model and the time it takes to reach your customers.
Since 60% of our business is in the export segment, so that’s the nature of the beast. And that’s why we have low cost pre shipment and post shipment credit to finance that in terms of working capital.
Kaushal Sharma — Analyst
And what about receivable days?
Gautam Singhania — Chairman and Managing Director
Sir? Receivable days are also not very different than the average industry receivable days that you see. And there is nothing which is actually crossing 100 days or so. In fact, you know, our revenue and profitability growth is expected to outpace any increase in the working capital. That’s how we see it.
Kaushal Sharma — Analyst
Thank you very much for answering my question.
operator
Thank you. We will take the last question from the line of Khushi from Negan Capital. Please go ahead. What is the forecast regarding the order book for the aerospace?
Khushi — Analyst
Sorry, I’m not able to hear you. Can you speak a little louder? You’re not audible.
Khushi — Analyst
Can I. Can you hear me now?
Gautam Singhania — Chairman and Managing Director
Yes, I can.
Khushi — Analyst
I wanted to know that the order book for the arrow space. So earlier you have mentioned the error sales order book is around 2.5 to 3x of the revenue. Is it the same right now or.
Gautam Singhania — Chairman and Managing Director
Yeah, typically like I explained last time, you know you have five year contracts and 10 year contracts and it depends on which portion of the contract you are. Normally the contracts are just renewed on expiry because or it grows in market share. But in general you’re averaging a two and a half year window in most cases and you can round it off to three sometimes depending on your tenure contract slide because those come up every 10 years. So I would still say a safe way to look at it is very much a two and a half year future period in which of our of our current sales where we have the order book and the order book continuously is growing based on our growth.
Like I said, because our pipeline of FAI which is new products is continuously increasing and we are still averaging more than one new part every day. So that will keep growing as well. So yes, the order book keeps improving and keeps increasing as we increase our sales.
Khushi — Analyst
I missed the part of Leap engine thing. How many leap like yearly, how many products do we supply for the leap engine?
Gautam Singhania — Chairman and Managing Director
So tradition basically we supply around between 300 and 350 part numbers depending on which model of 1a, 1b and even 1c is being introduced now. So roughly that is the mix. There are many common products that go to 1A and 1B but some products are also specific. So depending on that it slightly varies but that’s the number that we have in terms of what goes on to a leap. Different types of parts. Obviously the quantity is depending on the number of engines we supply. There are different types of parts that go on to the engine.
Khushi — Analyst
Thank you very much.
Gautam Singhania — Chairman and Managing Director
You’re welcome.
operator
Ladies and gentlemen, we will take that as a last question. And that concludes the question and answer session. I now hand the conference over to Mr. Gautam Menes for the closing comments. Now. Thank you. And over to you, sir.
Gautam Singhania — Chairman and Managing Director
So thank you everybody for coming on this call. And look forward to better times together. Thank you so much.
operator
Thank you. On behalf of Anandrati share and Stockbrokers Ltd. That concludes this conference. Thank you for joining with us today. And you may now disconnect your lines.