Today, we know Netflix as a streaming giant. But when it was founded in 1997, it was a DVD-by-mail rental company. As consumer preferences shifted, Netflix transformed its business model, pivoting from physical media to streaming. That reinvention not only helped Netflix survive the technological disruption, but it also made the company one of the most valuable entertainment technology companies in the world.
A similar transformation is quietly unfolding in India’s engineering sector. A few listed companies are moving beyond their legacy businesses and betting on one of the world’s most demanding manufacturing industries, one that could redefine their future: Aerospace.
Why These Companies Are Chasing Aerospace
At first glance, the three companies have very little in common. One has built its business around machine tools, another manufactures precision-engineered components, and the third is in textile manufacturing machinery.
Those companies are Jyoti CNC Automation, Azad Engineering, and LMW, each taking a different path into aerospace.
Aerospace is not just another manufacturing industry. It’s one of the few industries where technological capability, rather than production scale, determines long-term success.
Breaking into the aerospace supply chain isn’t easy. Companies often spend years qualifying with global OEMs through rigorous audits, product testing, and process validation before they can supply even a single component or machine. But once they get in, the economics change dramatically.
Aircraft and engine programmes typically run for decades, making suppliers difficult to replace. Long product cycles, high switching costs, and stringent certification requirements create sticky customer relationships, predictable revenues, and better pricing power.
The three companies, however, are taking very different routes to get there.
Three Companies, Three Different Routes Into Aerospace
#1 Jyoti CNC Automation: Selling the Tools That Build Aircraft
Jyoti CNC is India’s largest manufacturer of Computer Numerical Control (CNC) machines. These are computer-driven tools that automate cutting, shaping, and drilling of materials. They convert digital designs into precise physical components. Over the years, Jyoti CNC has steadily moved into a far more specialised market, supplying advanced 5-axis CNC machines used to manufacture complex aerospace and defence components.
The shift is already visible in the company’s business mix. Aerospace and defence now account for the majority of the company’s sales. In FY26, Aerospace and Defence contributed 39% to the total sales, down from 45% in FY25.
Jyoti CNC: Revenue Split
Management attributed the drop in revenue share of the aerospace business to capacity constraints. The facilities were operating at over 100% utilisation, which limited their ability to fully execute the growing order book. At the end of March 2026, the order book stood at ₹4,732 crores, of which 38% was aerospace and defence orders.
Jyoti CNC: Financial Performance
| Metrics | FY25 | FY26 |
| Sales (₹ crores) | 1,818 | 2,093 |
| Gross Margin (%) | 52.2 | 55.1 |
| EBITDA Margin (%) | 27.0 | 25.2 |
| Net Profit (₹ crores) | 316 | 336 |
The transformation is also evident in the numbers. Revenue increased by 15% to ₹2,093 crores and gross profit margin expanded by 290 basis points to 55.1%. Such an improvement suggests the company is moving away from price-led competition towards a business supported by technology, product differentiation and higher-value applications.
Supported by healthy order visibility, management has guided for 25%-30% revenue growth over the next two financial years, with aerospace and defence expected to remain one of its fastest-growing end markets over the next five to ten years.
Beyond aerospace, the company is laying the foundation for another high-precision business. Jyoti CNC plans to commercially launch products for the semiconductor equipment industry within the next two years. While still at an early stage, this move could further strengthen the company’s technological capabilities and widen its competitive moat by expanding into another industry with high entry barriers and stringent precision requirements.
#2 Azad Engineering: Winning the Hardest Qualification
If Jyoti CNC specialises in building machines that manufacture aerospace components, Azad Engineering produces some of the most critical parts that go inside a jet engine.
Azad Engineering is a Hyderabad-based company that manufactures precision-engineered turbine blades, airfoils, and rotating components for global OEMs, including GE Aerospace, Rolls-Royce, Mitsubishi Heavy Industries, and Siemens Energy.
Azad Engineering: Revenue Split
While Azad Engineering is often viewed as an aerospace play, its business today is still anchored by the energy and oil & gas sectors. In FY26, these segments remained the company’s largest revenue contributors, while aerospace and defence accounted for less than 20% of revenue.
That mix, however, is changing. Management expects aerospace and defence to contribute 35%-45% of revenue over the next four to five years. The aerospace & defence portion of the order book is valued at over $200 million (approximately INR 1,700 crores), providing multi-year visibility.
Azad Engineering: Financial Performance
| Metrics | FY25 | FY26 |
| Sales (₹ crores) | 457 | 603 |
| EBITDA Margin (%) | 35.3 | 37.1 |
| Net Profit (₹ crores) | 87 | 134 |
In FY26, sales revenue increased by nearly 32% to ₹603 crores and EBITDA margin expanded by 180 basis points to 37.1%, indicating improving operating efficiency. In addition, 93% of the company’s revenue during the year came from exports, underpinning a business model that is overwhelmingly global.
The management has guided multi-year revenue growth in the range of 25 to 30%, supported by a massive order book of approximately ₹6,500 crores, which provides roughly 11x to 12x revenue visibility.
#3 LMW: Looking Beyond its Textile Legacy
Unlike Jyoti CNC and Azad Engineering, LMW’s aerospace business is still in its early stages. For more than six decades, LMW has been primarily a textile machine manufacturing business, which makes its earnings inherently cyclical.
The company’s aerospace ambitions are housed under its Advanced Technology Center (ATC), which manufactures technically complex engine parts, structural assemblies, sheet metal components, and composite parts. LMW has positioned the business at the high end of the value chain, focusing on precision-engineered components that demand specialised manufacturing capabilities and command superior margins.
LMW: Financial Performance
| Metrics | FY23 | FY24 | FY25 | FY26 |
| Sales (₹ crores) | 4,719 | 4,696 | 3,012 | 3,207 |
| Operating Margin (%) | 9.5% | 9.3% | 4.7% | 5.3% |
| Net Profit (₹ crores) | 384 | 374 | 103 | 131 |
LMW’s revenue profile showcases the cyclical nature of the business. The growth has been very uneven. With respect to the company’s aerospace business, it currently contributes less than 10% to the total revenue, but is growing significantly faster than the legacy business.
In FY26, ATC revenue grew 22% to ₹207 crore, accounting for around 6% of LMW’s consolidated turnover. More importantly, nearly 90% of the division’s revenue came from exports, supplying global aerospace programmes as a Tier-2 supplier. It is also executing projects for ISRO, HAL and India’s defence sector. As of May 2026, the division had an order book of around ₹360 crore to be executed over the next 18 months.
To unlock the next phase of growth, LMW will invest around ₹150 crore over the next five years to build a significantly larger ATC campus, while maintaining EBITDA margins of around 20%.
Three Companies, Three Aerospace Strategies
| Company | Legacy Business | Aerospace Strategy | Current Stage |
| Jyoti CNC | Machine tools | Precision machine tools | Aerospace already driving order book |
| Azad Engineering | Energy & precision engineering | Engine components | Scaling global aerospace business |
| LMW | Textile machinery | Complex metallic & composite parts | Early-stage diversification |
Institutions Are Buying Into the Transformation
Investors are beginning to recognise this transformation as well. Institutional ownership in Jyoti CNC and Azad Engineering has increased over the last two years as foreign and domestic investors have steadily increased their holdings.
Institutional Shareholding (in %)
| March 2024 | March 2026 | |||
| Company | FII | DII | FII | DII |
| Jyoti CNC | 5.75 | 5.89 | 8.95 | 13.68 |
| Azad Engineering | 6.98 | 5.00 | 14.75 | 11.71 |
| LMW | 5.24 | 11.15 | 5.54 | 9.55 |
Often an increase in institutional accumulation is a sign of rising confidence in a company’s long-term growth prospects. However, it should not be viewed as a promise of future returns. Investment results ultimately depend on the company’s ability to execute its strategy and provide sustained earnings growth.
Has the Market Already Priced in the Opportunity?
The aerospace story is already priced into valuations, with all three companies trading at a premium to the broader engineering sector.
P/E Multiple Trend
| Company | P/E | 5-yr Median PE | Industry PE |
| Jyoti CNC | 51.0 | 74.3 | 32.0 |
| Azad Engineering | 108.0 | 99.3 | 35.6 |
| LMW | 148.0 | 67.7 | 32.0 |
Among the three companies, LMW trades at the richest multiple, despite aerospace contributing less than 6% of consolidated revenue. The valuation reflects not only expectations from the Advanced Technology Centre but also optimism surrounding the recovery in its core textile machinery business.
But a premium valuation also leaves little room for execution missteps. Instead of just focusing on revenue and profit growth, consider whether these companies can consistently grow their aerospace business, expand margins, and deliver the earnings growth implied by today’s valuations.
The Bigger Picture and Challenges
The real story isn’t that a few Indian engineering companies are entering aerospace. It is that they are attempting to redefine what they are.
For decades, businesses like textile machinery, conventional machine tools and industrial engineering generated steady growth yet remained vulnerable to economic cycles. Aerospace offers an opportunity to build businesses with deeper technological capabilities, stronger customer stickiness and longer growth runways.
Whether these companies ultimately succeed will depend less on winning a few large contracts and more on their ability to consistently execute over the next decade. If they do, India’s aerospace opportunity may not just create new winners; it could reshape the country’s engineering landscape and produce the next generation of globally competitive precision manufacturers. As the aerospace component manufacturing ecosystem expands, add these stocks to your watchlist and monitor how they execute on their long-term growth plans.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Deepan Datta has spent over a decade studying stocks and mutual funds. His passion is to uncover interesting stories in the financial markets and share them through his writings with investors at large. He is focused on delivering clear, easy to understand and research-backed insights. Deepan began his career as a Research Associate at S&P Global, where he developed a strong foundation in financial research and data analysis.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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