AERONEU - Aeroflex Neu

📊 NSE: AERONEU 🏢 Packaging 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations grew 18.36% YoY to INR 129.24 Cr in FY25 from INR 109.19 Cr in FY24. This growth was driven by volumetric increases and improved realizations across the product portfolio, including PP/PE woven bags and FIBCs.

Geographic Revenue Split

The company has a significant international presence, exporting to 30+ countries. While specific regional percentages are not disclosed, the export market is a key driver for the recently launched high-margin products like slit fences and ground covers.

Profitability Margins

Operating margins have seen a downward trend, declining to 3.6-3.7% in FY25 from 7.24% in FY23. Net Profit Margin (PAT Margin) stood at 0.18% in FY25, a decline of 65 bps from 0.83% in FY24, primarily due to raw material price volatility and increased freight costs.

EBITDA Margin

EBITDA margin was 4.73% in FY25, down 154 bps from 6.28% in FY24. Absolute EBITDA fell 11.15% YoY to INR 6.22 Cr from INR 7.00 Cr, reflecting the impact of higher operating expenses which rose to INR 41.28 Cr.

Capital Expenditure

The company ramped up its new manufacturing unit in Udaipur during FY25. Property, Plant & Equipment increased to INR 51.58 Cr from INR 48.01 Cr. Capital work-in-progress was reduced to zero from INR 0.52 Cr as projects were commissioned.

Credit Rating & Borrowing

The company maintains a 'CRISIL BB+/Stable' rating. Total borrowings as of March 31, 2025, stood at INR 28.29 Cr (INR 4.24 Cr non-current and INR 24.05 Cr current). Bank limit utilization is high at 91-92%.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include Polypropylene (PP) and Polyethylene (PE) resins. Cost of materials consumed was INR 75.06 Cr in FY25, representing 58.08% of total revenue.

Import Sources

Not specifically disclosed in the documents, though the company notes sensitivity to global price fluctuations and freight costs associated with procurement.

Capacity Expansion

The company recently ramped up a new unit in Udaipur to support revenue growth. Current fixed assets of INR 51.58 Cr support the production of FIBC bags and new products like slit fences.

Raw Material Costs

Raw material costs increased 18.33% YoY to INR 75.06 Cr in FY25. The company manages costs through judicious inventory liquidation and monitoring price fluctuations to mitigate margin compression.

Manufacturing Efficiency

Efficiency is monitored through working capital management. The company maintains a healthy current ratio of 2.0x despite stretched liquidity.

Logistics & Distribution

Increased freight costs were a primary driver for the decline in operating profitability to 3.6% in FY25.

📈 Strategic Growth

Expected Growth Rate

18%

Growth Strategy

Growth is targeted through the expansion of the customer base in the food and pharmaceutical industries and the aggressive sale of new high-margin products such as slit fences and ground covers. The company is also actively seeking inorganic growth through strategic investments in India and abroad.

Products & Services

Polypropylene (PP) and Polyethylene (PE) woven fabric bags, Flexible Intermediate Bulk Container (FIBC) bags, ground covers, slit fences (fabric rolls), and polytubes.

Brand Portfolio

Aeroflex Neu (formerly Sah Polymers Limited).

New Products/Services

Slit fences and ground covers are the primary new product launches expected to contribute to higher margins and revenue growth toward a target of INR 120 Cr+.

Market Expansion

Expansion into 30+ export countries and targeting new industrial segments like pharmaceuticals to diversify the revenue base.

Strategic Alliances

The company is evaluating strategic/inorganic growth transactions in India and abroad to expand its market reach.

🌍 External Factors

Industry Trends

The packaging industry is shifting toward specialized FIBC and technical textiles like ground covers. Aeroneu is positioning itself by moving from basic woven bags to these higher-value products to improve its 3.6% operating margin.

Competitive Landscape

The company operates in a competitive market for packaging products, facing pressure from both raw material suppliers and end-user pricing demands.

Competitive Moat

The moat is based on the promoters' 30-year experience and established relationships with clients. Sustainability depends on successfully transitioning to high-margin technical products to offset commodity price risks.

Macro Economic Sensitivity

Highly sensitive to global commodity prices (PP/PE) and international shipping/freight rates which impacted FY25 margins by over 150 bps.

Consumer Behavior

Increased demand for specialized industrial packaging in the food and pharma sectors is driving the company's shift in product strategy.

Geopolitical Risks

Export operations are subject to international trade dynamics and freight cost volatility.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with SEBI (LODR) Regulations and Companies Act 2013. The company maintains a Whistle Blower Policy and Vigil Mechanism.

Taxation Policy Impact

Effective tax expense was INR 0.15 Cr in FY25 on a PBT of INR 0.38 Cr, representing an effective rate of approximately 39%.

Legal Contingencies

No instances of non-compliance, penalties, or strictures were imposed by Stock Exchanges or SEBI during the year 2024-25.

⚠️ Risk Analysis

Key Uncertainties

Operating margin sustainability is the key uncertainty; a decline below 3.5% could lead to a credit rating downgrade due to tight cash accruals (INR 3.0-3.5 Cr) vs debt obligations.