Target: ₹1,090
CMP: ₹921.30
We initiate coverage on Jyoti CNC Automation with a “Buy” rating and a target price of ₹1,090. Jyoti CNC specializes in the production of high-precision CNC lathes, vertical machining centers, horizontal machining centers, and custom automation solutions.
India’s machine tools production is projected to grow at a low-double-digit (LDD) rate between FY23 and FY27, with CNC machining centers expected to expand at a low-mid-double-digit (L-MDD) rate. Currently, over 50% of consumption relies on imports due to a shortage of mid-high-end indigenous CNC machines. However, companies like Jyoti CNC are addressing this by focusing on the production of mid-high-end machinery, effectively bridging the demand-supply gap. This strategy is anticipated to increase the share of domestic CNC machines from 54% in 2023 to 60% by 2027.
In response to the rising demand in the Electronics Manufacturing Services (EMS) and Aerospace and Defence sectors, Jyoti CNC plans to expand its capacity from 6,000 units to 16,000 units with a capital expenditure of ₹450 crore, financed through debt and internal accruals. This expansion follows an increase of 1,600 units completed in September 2024.
The company currently has an order backlog of ₹4,410 crore, ensuring revenue visibility for the next 18 to 24 months. Financial performance has significantly improved over the past two years, with EBITDA margins rising to 27% in FY25, up from 8.3% in FY23. It is expected that margins will remain in the 25-26% range from FY26 to FY28, as any decline in gross margins is likely to be counterbalanced by operational leverage.
Published on October 3, 2025.
