Indian aerospace and auto components supplier Raymond reported a 20% fall in quarterly profit on Monday, as rising expenses outpaced revenue growth in its second earnings report since spinning off its realty and apparel businesses.
The firm said its profit from continuing operations before exceptional items and taxes fell to 1.93 billion rupees ($21.96 million) in the quarter ended September 30 from 2.41 billion rupees a year ago.
Raymond’s overall expenses rose 11.6%, driven by increases in employee benefits and finance costs, despite a marginal decline in raw material costs.
The company’s revenue from operations rose 11.4% to 5.28 billion rupees for the quarter, led by growth in its aerospace and defence business and auto components segment.
Analysts expect the aerospace business to benefit from global supply chain shifts and the company’s strong ties with original equipment manufacturers. Global aerospace suppliers are enjoying robust demand for parts, benefiting from planemakers ramping up production to meet booming demand for new jets.
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However, the company said it was cautious in its outlook for the aerospace and defence business outlook due to pressures such as U.S. tariffs that have caused scheduling delays.
Raymond approved the demerger of its realty business, Raymond Realty in May, its second spinoff since the listing of its apparel business, Raymond Lifestyle, last September. The group has split its business to attract more investors and help the carved-out entities access more capital.
Shares of Raymond have risen around 7.1% since the demerger announcement on May 14. They closed 2.5% higher on Monday.
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