AEROFLEX - Aeroflex

📊 NSE: AEROFLEX 🏢 Steel - Medium / Small 📅 Last Updated: 12/13/2025 17:56

💰 Financial Performance

Revenue Growth by Segment

Hyd-Air subsidiary sales grew 500% from INR 1.5 Cr to INR 9 Cr in Q2 FY26. The value-added assembly segment contributed 53% of total sales, aligning with high-margin targets.

Geographic Revenue Split

Exports contributed 75% of total revenue in FY25. Domestic sales contribution improved from 19% to 27% in H1 FY26, driven by standalone growth and Hyd-Air integration.

Profitability Margins

Gross margins improved in Q2 FY26. Net Profit margin for H1 FY26 was 10.93% (INR 21.4 Cr), while Cash PAT margin stood at 17.08% (INR 33.43 Cr).

EBITDA Margin

EBITDA margin reached a record 23.47% in Q2 FY26, up 136 bps YoY from 22.10%. H1 FY26 EBITDA margin was 21.39% (INR 41.87 Cr).

Capital Expenditure

Production capacity was expanded by 22.22% to 16.5 Mn mtrs in FY25. IPO proceeds of INR 351 Cr were utilized for debt prepayment and working capital.

Credit Rating & Borrowing

IVR BBB- (Under watch with positive implications) was withdrawn in Oct 2023 after the company prepaid all outstanding debt using IPO proceeds.

⚙️ Operational Drivers

Raw Materials

Stainless Steel (SS), Bronze, Inconel, Monel, and PTFE represent the primary raw materials, with material costs totaling INR 65.68 Cr in Q2 FY26 (59.2% of revenue).

Import Sources

Sourced from global markets with a strategic focus on supporting growth in the Americas and Europe.

Capacity Expansion

Current installed capacity is 16.5 Mn mtrs (FY25), up from 13.5 Mn mtrs. Capacity utilization stands at 75.14%.

Raw Material Costs

Cost of materials consumed was INR 65.68 Cr in Q2 FY26, up 7.7% YoY, while revenue grew 16.7%, indicating improved procurement efficiency.

Manufacturing Efficiency

Capacity utilization is 75.14%. Automation and process optimization are being implemented to improve productivity and sustain 23%+ margins.

📈 Strategic Growth

Expected Growth Rate

16-18%

Growth Strategy

Growth will be achieved through the launch of the Liquid Cooling segment (INR 16 Cr orders secured), increasing the share of 53% value-added assemblies, and inorganic expansion in Americas/Europe.

Products & Services

Stainless steel corrugated flexible hoses, braided/non-braided hoses, assemblies, fluid control solutions, and liquid cooling systems.

Brand Portfolio

Aeroflex, Hyd-Air Engineering.

New Products/Services

Liquid cooling systems for data centers/high-performance computing launch in Q3 FY26 with an initial order book of INR 16 Cr.

Market Expansion

Focussed thrust on the Americas and Europe for FY 2024-25, alongside domestic expansion in Railways and Shipbuilding via Hyd-Air.

Market Share & Ranking

Metal bellows market projected to reach USD 5,607.7 Mn by 2035 (6.4% CAGR); Aeroflex is positioning for global leadership in metallic flexible hoses.

Strategic Alliances

Sole supplier for a major liquid cooling project in India, with potential for international customer delivery.

🌍 External Factors

Industry Trends

The metal bellows market is growing at a 6.4% CAGR, evolving toward specialized applications in Aerospace, Semiconductors, and Green Energy.

Competitive Landscape

Intense competition in standard hose segments is mitigated by moving into the 53% value-added assembly segment.

Competitive Moat

Moat is sustained by sole-supplier status for critical cooling projects, NABL-accredited R&D, and high switching costs for specialized metallic assemblies.