Aequs Ltd
Stock Snapshot
Price Performance
Vista Outlook
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Aequs Ltd is positioned for significant growth, driven by a robust aerospace order book and strategic investments in both aerospace and consumer segments. Management's confidence in achieving 20%+ revenue growth and 20% EBITDA margins in the aerospace sector, supported by substantial MoUs for new facilities, underscores the company's long-term potential. However, near-term challenges, including a CFO transition and supply chain disruptions, may pressure margins and profitability. Vista's forecast reflects a cautious outlook, anticipating a 45-50% revenue growth in FY27, but acknowledges the potential for operational EBITDA to double. The current valuation suggests expectations of sustained long-term growth, despite the absence of earnings visibility. Industry dynamics, particularly the expanding defense sector and improving pricing power, provide a favorable backdrop, although Aequs must navigate its internal challenges effectively. Over the next 12-24 months, key opportunities include ramping up production capabilities and enhancing asset utilization, while watchpoints include the impact of ongoing supply chain issues and the transition in leadership
Why We Like This Stock
- Robust aerospace order book of USD 889 million supports long-term revenue growth
- Strategic investments exceeding ₹4,700 Cr in new manufacturing facilities enhance competitive positioning
- Management projects significant operational EBITDA growth, indicating strong leverage potential
Things To Watch Out For
- CFO transition and supply chain disruptions may hinder near-term profitability
- Heavy depreciation from consumer capex is expected to keep consolidated PAT negative until H1 FY28
- Low capacity utilization in the consumer segment poses challenges to achieving targeted EBITDA margins
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 965 | 925 | 1,230 | 1,575 | 1,934 |
| Profit Before Tax (Cr.) | -21 | -48 | -63 | -115 | -130 |
| PBT Margin | -2.2% | -5.2% | -512.2% | -7.3% | -6.7% |
| Net Profit (Cr.) | -22 | -70 | -118 | -86 | -98 |
| Earnings Per Share | -0.3 | -1.0 | -1.8 | -1.3 | -1.5 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
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Aequs Limited operates as a diversified contract manufacturer providing vertically integrated product solutions across the aerospace, toys, and consumer durable goods industries. The company offers contract manufacturing services that include design, development, and production of engineered parts and products. It provides vertically and horizontally integrated manufacturing ecosystems, built-to-suit facilities, turnkey office spaces, and infrastructure for manufacturing, engineering, and IT/BT companies. The company operates industrial clusters for aerospace, plastics, toys, and consumer goods. It manufactures cookware, home appliances, and children's products for various brands, as well as delivers ODM and OEM solutions. In addition, it offers integrated warehousing, logistics, supply chain management, skill development and training, and support for social infrastructure and residential accommodation. The company was founded in 1997 and is based in Belgaum, India.