Jyoti CNC Automation Limited — Investor Meet, 23-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Jyoti CNC Automation Limited reported a robust Q2 performance, achieving a revenue of ₹430.7 crore, marking a substantial 43% year-over-year increase from ₹302 crore. The EBITDA margin improved significantly to 25%, up from 18% in the previous fiscal year, resulting in an EBITDA of ₹106.6 crore. Operational PAT surged by 352% to ₹75.9 crore, up from ₹16.8 crore in Q2 FY24. Notable contributions to revenue came from aerospace (38%), auto and auto components (29%), and other sectors.

**Future Outlook and Growth Drivers:** Management highlighted that the aerospace and EMS (Electronics Manufacturing Services) sectors are pivotal to growth, with anticipated annual growth rates of 15-20% for auto and general engineering sectors. The shift towards EVs in the auto industry presents additional opportunities. They emphasized strong R&D capabilities, targeting the semiconductor equipment market as a future growth area.

**Order Book and Operational Updates:** The order intake for Q2 FY25 stood at ₹1,283 crore, resulting in a total order book of ₹4,289 crore. The aerospace sector accounted for 43% of the current order book, with significant projects in the EMS space.

**Analyst Q&A Insights:**

- *Revenue and Profitability:* Analysts questioned growth sustainability, particularly in the context of potential slowdowns in auto demand, to which management responded affirmatively, citing strong inquiries and confidence in order inflows.

- *Market Position and Competitive Landscape:* Jyoti holds a 10-12% share in the domestic CNC machine market. The competitive landscape remains stable, with no significant new players.

- *Operational Challenges or Risks:* There are ongoing capacity expansions, and management addressed supply chain concerns, emphasizing readiness to meet future demand.

- *Capex and Capital Allocation:* The company plans a ₹400 crore capital injection to expand capacity by 10,000 machines over two financial years, primarily funded through internal accruals.

- *Strategic Priorities and Long-Term Vision:* Focused on product development and entering new markets, particularly the U.S., to enhance operational efficiencies.

**Market or Regulatory Updates:** There were no significant regulatory changes discussed that would impact operations or strategy.

**Strategic Focus Areas:** Management's emphasis on innovative product development, including entry into the semiconductor sector, reflects a strategic pivot towards high-value segments.

**Investor Insight:** The strong revenue growth, expanding order book, and strategic focus on high-demand sectors present favorable conditions, suggesting a ‘buy’ position, assuming market dynamics remain stable and execution capabilities continue to improve.