1.At a Glance
If Elon Musk had been born in Rajkot instead of Pretoria, he’d probably be building CNC machines instead of rockets — becausethisis where metal dreams become mechanical masterpieces. Jyoti CNC Automation Ltd, with its ₹20,573 crore market cap and an ego almost as big as its Rajkot factory, just posted another solid quarter. At ₹906 per share (down from its ₹1,504 high), the company’s stock is like that overachieving cousin who topped the exam but still got a lecture from his dad.
Q2FY26 revenue jumped 17.9% year-on-year to ₹508 crore, while PAT rose 12.7% to ₹85.5 crore. The operating profit margin (OPM) held a muscular 25%. The P/E ratio? A chunky 59.4x — proving that investors will pay luxury-watch valuations for a machine-tool manufacturer if it justlookslike AI-driven manufacturing. ROE sits at a solid 21.2%, ROCE at 24.4%, but debt of ₹724 crore keeps the CFO awake at night.
Still, it’s hard to ignore a company that’s managed to scale from ₹929 crore in FY23 sales to ₹1,943 crore in FY25 while maintaining a 26% profit margin. If your Excel sheet isn’t smiling at that, it’s time to check your formulas.
2.Introduction
Let’s set the scene: Rajkot, the land of masala khichdi and machine tools, has quietly built one of India’s most advanced industrial exports — CNC machinery. Jyoti CNC Automation is the desi poster child for metal-cutting precision, 5-axis bragging rights, and the occasional TDS compounding penalty (₹9.07 crore, thank you, BRSR disclosure).
The company began as a small workshop that made lathes but now supplies sophisticated CNC equipment toHAL, TATA, Airbus, Bosch, and Volvo. That’s right — Rajkot machines are quietly cutting parts for airplanes in France. Somewhere, a French engineer is whispering, “Mon dieu, c’est made in Gujarat?”
The last few years have been wild. From a pandemic slowdown to an IPO that made analysts foam at the mouth, Jyoti CNC rode the manufacturing megatrend straight into investor FOMO territory. But after the IPO euphoria, the stock corrected nearly 40%, reminding everyone that “Make in India” dreams still need operational discipline and timely receivables.
Still, the story here isn’t about hype — it’s aboutexecution. When you scale production from 2,460 units in FY22 to 3,063 units in FY24, while expanding into aerospace and exporting 45% of your output, you’ve earned your CNC stripes.
3.Business Model – WTF Do They Even Do?
If you’re the kind who thinks CNC stands for “Chai-Nashta Company,” buckle up. Jyoti CNC designs and manufacturesmetal-cutting computer numerical control machines— the mechanical gods behind your aircraft components, auto parts, defense precision gear, and even that Audi engine casing.
The business is divided into two verticals:
- Machinery (93%)– This is the heart of the beast. They produce over 200 variants across 44 product lines — think CNC Turning Centers, Turn Mill Centers, Vertical and Horizontal Machining Centers, and their prized 5-axis machines. Essentially, they sell the tools that build the tools that build everything else.
- Spare Parts & Services (7%)– Once your ₹1 crore CNC baby breaks down, Jyoti steps in with spares and after-sales service. Think of it as AMC money for the machine elite.
Industries served? Aerospace, Auto, Defense, General Engineering, and EMS — basically, if it spins, cuts, or flies, they’re involved.
The
big story: Aerospace now forms 43% of sales (up from just 8% in FY22). So while car parts were once Jyoti’s bread and butter, now it’s cutting metal for flying objects.
4.Financials Overview
| Metric | Latest Qtr (Sep 2025) | Same Qtr Last Year (Sep 2024) | Prev Qtr (Jun 2025) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 508 | 431 | 410 | 17.9% | 23.9% |
| EBITDA (₹ Cr) | 125 | 107 | 100 | 16.8% | 25.0% |
| PAT (₹ Cr) | 85.5 | 76 | 71 | 12.7% | 20.4% |
| EPS (₹) | 3.76 | 3.34 | 3.14 | 12.6% | 19.7% |
Annualised EPS = 3.76 × 4 =₹15.0At CMP ₹906, that’s aP/E of ~60.4x. Expensive? Yes. But in manufacturing, investors pay for precision — and hope for scale.
Commentary:Jyoti’s quarterly numbers look like a nicely oiled lathe — steady, efficient, and slightly overpriced. Margins are stable, growth is strong, and even the bottom line is spinning smoothly. The only thing sharper than their cutting tools right now is the stock’s valuation multiple.
5.Valuation Discussion – Fair Value Range (Educational)
Let’s play valuation Sudoku:
a) P/E MethodEPS (annualised): ₹15.2Industry average P/E: 35.2
- Conservative case (35x): 15.2 × 35 = ₹532
- Optimistic case (60x): 15.2 × 60 = ₹912
Fair Value (P/E method): ₹530–₹910
b) EV/EBITDA MethodEV/EBITDA (current): 38.8xLet’s assume fair range 25–35xEBITDA FY25: ₹491 CrFair EV range: ₹12,275–₹17,185 CrSubtract debt (₹724 Cr), add cash (let’s assume ₹200 Cr):Fair Market Cap range: ₹11,751–₹16,661 CrPer-share range (22.7 Cr shares): ₹517–₹734
c) Simplified DCF (educational guess):Assume FCF turns positive FY27 (after capacity expansion), growth slows to 15%, discount 12%.Fair value: ₹700–₹950
📘Educational Fair Value Range: ₹530 – ₹950 per share(This range is for educational discussion only and not investment advice.)
6.What’s Cooking – News, Triggers, Drama
Where do we even start?
- Expansion Capex:₹400 crore expansion at Rajkot to add10,000 machines per year. Completion expected by Q3 FY26. That’s like doubling your dosa griddle capacity before breakfast rush hour.
- French Affair:The Strasbourg unit in France is undergoing bottleneck removal, expected to hit peak revenue potential of€80 million
