💰 Financial Performance

Revenue Growth by Segment

Total Operating Income decreased by 3.94% YoY to INR 927.00 Cr in FY25 (Provisional) from INR 965.02 Cr in FY24. While segment-specific growth percentages are not explicitly broken down, the company operates across Aerospace, Toys, and Consumer Durables, with growth expected to be driven by confirmed order books in these divisions.

Geographic Revenue Split

The company operates manufacturing facilities in India, France, and the United States. Specific percentage splits per region are not disclosed, but the international facilities complement Indian operations to serve global aerospace and consumer markets.

Profitability Margins

The company reported a Net Loss (PAT) of INR 101.70 Cr in FY25 (Provisional), a significant decline from a loss of INR 14.28 Cr in FY24. PAT margin deteriorated from -1.45% to -10.53% YoY. This decline is attributed to high interest costs and operational overheads during the scale-up of new business segments.

EBITDA Margin

EBITDA margin contracted to 8.21% in FY25 (Provisional) from 12.83% in FY24. Absolute EBITDA fell by 38.54% to INR 76.10 Cr from INR 123.82 Cr, reflecting pressure on core operating profitability due to increased costs in the contract manufacturing segments.

Capital Expenditure

Not explicitly disclosed in absolute INR Cr for future periods, but the company has historically invested in the 400-acre Koppal Toy Cluster and vertically integrated aerospace facilities in Belagavi, France, and the US.

Credit Rating & Borrowing

The company's long-term bank facilities were rated IVR BB/Stable (Withdrawn in August 2025). Previous ratings were IVR BB/Negative under the 'Issuer Not Cooperating' category. Interest coverage ratio declined to 1.32x in FY25 from 1.94x in FY24, indicating reduced cushion for debt servicing.

⚙️ Operational Drivers

Raw Materials

Specific raw material names like aluminum alloys or specialized plastics are not listed, but 'imported components' are identified as a major cost driver, particularly for the Toys and Consumer Durables segments.

Import Sources

Raw materials and components are sourced globally to support facilities in India, France, and the USA, with a high dependency on imports for the toy manufacturing ecosystem.

Capacity Expansion

The company operates the Koppal Toy Cluster, a 400-acre campus designed to house an entire toy manufacturing ecosystem. It also maintains specialized aerospace facilities for precision machining, forging, and surface treatment.

Raw Material Costs

Raw material costs are a significant portion of the cost structure, evidenced by high inventory holding requirements. Specific percentage of revenue is not disclosed, but procurement strategies focus on vertical integration to control the value chain.

Manufacturing Efficiency

Capacity utilization percentages are not disclosed, but the company demonstrated a ~90% average utilization of fund-based working capital limits, indicating high operational activity levels.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Growth Strategy

Growth is targeted through a 'cluster-based' manufacturing model, specifically the 400-acre Koppal Toy Cluster, and by leveraging long-term supply agreements with global aerospace and consumer durable OEMs to ensure steady revenue streams.

Products & Services

Precision machined AeroSystems, Aerostructures, landing gear, engine components, sheet metal fabrication, forged parts, toys, and consumer durable goods.

Brand Portfolio

Aequs, Koppal Toy Cluster.

New Products/Services

Contract manufacturing of consumer durable goods (commenced 2020) and the expansion of the toy manufacturing ecosystem are the primary new revenue drivers.

Market Expansion

Expansion is focused on scaling the India-based clusters while utilizing French and US facilities to provide 'near-shore' support to global aerospace clients.

Strategic Alliances

The company has entered into a Shareholders' Agreement with investors including Amicus Capital, Amansa Investments, and Catamaran Ekam (Catamaran Advisors LLP).

🌍 External Factors

Industry Trends

The industry is shifting toward integrated contract manufacturing where OEMs prefer 'end-to-end' partners. Aequs is positioned as a vertically integrated player to capture this shift from component supply to full assembly.

Competitive Landscape

Competes with global aerospace tier-1 and tier-2 suppliers and large-scale contract manufacturers in the toy and consumer durable space.

Competitive Moat

The company's moat is built on its specialized infrastructure (Koppal Toy Cluster) and aerospace certifications. These are sustainable because the capital intensity and regulatory requirements for aerospace manufacturing prevent rapid competitor entry.

Macro Economic Sensitivity

Highly sensitive to global aerospace cycles and consumer spending on toys and durables. A 1% decline in global air travel demand typically correlates with reduced orders for aerostructures and engine components.

Consumer Behavior

Demand for toys and consumer durables is driven by increasing outsourcing by global brands to Indian manufacturing hubs to diversify away from China.

Geopolitical Risks

Operations in the US, France, and India expose the company to trade policy changes and cross-border regulatory shifts in the aerospace and defense sectors.

⚖️ Regulatory & Governance

Industry Regulations

Subject to strict aerospace manufacturing standards, surface treatment environmental norms, and toy safety standards for global exports.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the continued weak financial profile, with a PAT loss of INR 101.70 Cr in FY25. Failure to turn profitable could impact the ability to sustain the high debt of INR 416.87 Cr.

Geographic Concentration Risk

While diversified across India, France, and the US, a significant portion of manufacturing assets is concentrated in the Karnataka region (Belagavi and Koppal).

Third Party Dependencies

High dependency on global OEMs for orders and international suppliers for specialized components.

Technology Obsolescence Risk

Risk is mitigated by constant investment in precision machining and prototyping capabilities for next-generation aircraft components.

Credit & Counterparty Risk

The company faces information availability risk, as noted by its previous 'Issuer Not Cooperating' status, which can affect its ability to secure favorable credit terms.