Aequs Limited — Q3 FY26 earnings call

Call held 29 Jan 2026

Management summary

Aequs Limited reported strong top-line growth in Q3 and nine months FY26, driven by both aerospace and consumer segments, with significant EBITDA expansion. The aerospace segment remains highly profitable, anchoring the company's performance. However, the consumer segment, while growing rapidly, is currently loss-making due to its ramp-up phase and front-ended investments, impacting overall PAT. The company's balance sheet has strengthened post-IPO, with reduced net debt to equity.

Highlights

  • Strong revenue growth in Q3 FY26 (51% YoY) and nine months FY26 (28% YoY) driven by aerospace and consumer segments.

  • Significant EBITDA growth in Q3 FY26 (353% YoY) and nine months FY26 (85% YoY), with margin improvement from 10% to 14% for nine months.

  • Aerospace segment continues to be profitable with a healthy 24% EBITDA margin for nine months FY26.

  • Net debt to equity reduced sharply to 0.1X following the IPO and improved capital structure.

  • Received approval from Meity for PLI incentives under the electronic component manufacturing scheme.

Concerns

  • Q3 FY26 PAT was negative INR 42.6 crores, including one-time labor code and IPO expenses of INR 16.7 crores.

  • Consumer segment EBITDA loss widened in Q3 FY26 from INR 9.5 crores to INR 15.9 crores, and showed a 9% fall YoY for nine months FY26.

  • Consumer segment currently has negative ROCE due to being in a ramp-up phase with front-ended investments.

  • Overall PAT positive guidance for FY27 is being re-evaluated due to increased customer demand and associated CapEx/depreciation in the consumer segment.

Key financials

3 periods

Headline

  • Total Assets (Dec 2025)
    ₹3,050 Cr

Q3 FY26

  • Revenue
    ₹326.2 Cr
    YoY +51%
  • EBITDA
    ₹38.1 Cr
    YoY +353%
  • EBITDA Margin
    12%
  • PAT
    ₹-42.6 Cr
  • Adjusted PAT
    ₹-25.9 Cr
  • Total Adjusted Revenue incl. JVs
    ₹355.4 Cr
    YoY +49%
  • EBITDA incl. JVs
    ₹44.9 Cr
    YoY +228%
  • EBITDA Margin incl. JVs
    13%

9M FY26

  • Revenue
    ₹863.3 Cr
    YoY +28%
  • EBITDA
    ₹122.2 Cr
    YoY +85%
  • EBITDA Margin
    14%
    YoY +40%
  • PAT Loss
    ₹59.3 Cr
    YoY -47%
  • Adjusted PAT Loss
    ₹42.6 Cr
  • Total Adjusted Revenue incl. JVs
    ₹948.2 Cr
    YoY +29%
  • EBITDA incl. JVs
    ₹141 Cr
    YoY +75%
  • EBITDA Margin incl. JVs
    15%
  • Net Working Capital Days
    120 days

What they filed

Q1 FY27: revenue up 54.7%, net profit down 1425.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue216 249 256 282 326 +51%367 +47%396 +55%
EBITDA7 25 27 29 29 +314%4 −84%15 −44%
Net profit-40 9 4 -21 -43 −7%-54 −700%-53 −1425%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue (9M FY26)
₹863.3 Cr Total
  • Aerospace ₹742.4 Cr 86.0%
  • Consumer ₹120.9 Cr 14.0%

Order book

high confidence

Total value

$814 Mn

as of 2025-12-31 quantified

Execution

delivered over the next five years, up to 2031

The order book is a total contract value (TCV) and is continuously updated with new orders and execution.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investment in CapEx for consumer segment
    Total assets stood at around INR 30.5 billion in December 2025 versus INR 18.6 billion in March 2025, reflecting IPO proceeds, investment in CapEx for consumer segment and increase in working capital in line with business growth.
  • Debt 0.1× EBITDA
    Net debt to equity reduced sharply to 0.1X as of nine months FY26, reflecting deleveraging following the IPO and improved capital structure.
  • M&A Accel India and Vagus Defense Joint venture · Announced

    To enter the design and manufacturing of unmanned aerial vehicles, primarily for India defense requirements.

    More recently, we have partnered with Accel India and Vagus Defense to enter the design and manufacturing of unmanned aerial vehicles, primarily for India defense requirements.
  • M&A Tramontina Joint venture · Announced

    To tap the global cookware market.

    In consumer segment, we partnered with Brazilian multinational Tramontina to tap the global cookware market.

Guidance & targets

Margin

  • Aerospace Segment EBITDA Margin Margin · Long term · High confidence 20% plus
    For the nine months, our margins have been 24% and we continue to see the margin range in 20% plus range.

    — Dinesh Iyer

  • Consumer Segment EBITDA Margin Margin · Steady state with ideal utilization · Medium confidence 18-20%
    The first question, again, like we said, as a consumer overall on a segment basis, you should see at a steady state with ideal capacity margins similar to aerospace, which is about 18-20% EBITDA margin.

    — Dinesh Iyer

Utilization

  • Aerospace Utilization in India Utilization · Ongoing · High confidence 75%
    So in regards to the aerospace, currently, our utilization in India is around 71%. Overall, typically, we see utilization of around 75%. That's where we guide our utilization to be reaching.

    — Rajeev Kaul

Revenue

  • Aerospace Business Growth Revenue · Ongoing · Medium confidence North of 20%
    You know, at this stage we see that we have opportunity to grow north of 20% in our aerospace business, and what we are seeing is what we are guiding.

    — Aravind Melligeri

  • Consumer Business Growth Revenue · Ongoing · Medium confidence Much faster than aerospace
    And obviously, consumer can be much faster than that, you know.

    — Aravind Melligeri

Market context

  • Overall PAT positive Profitability · FY27 · Low confidence Positive

    Previously FY27 → Positive

    I mean, look, our overall PAT being positive will be driven by the maturity of the consumer electronics business. And there are some dynamics which are coming in, especially with the customer being happy and asking us to increase the capacity, we need to make that call and evaluate how does that play out into our profitability timeline? That's the reason we earlier said, we need some more time to make that call on the timeline of consumer electronics profitability.

    — Aravind Melligeri

What to watch in Q4 FY26

Consumer Segment Profitability

Next few quarters
Current Loss-making, negative ROCE
Target Turn positive with increased utilization

Why it matters

Profitability of the consumer segment is key to overall company PAT and margin improvement.

Consumer segment being in a ramp up phase with investments front ended shows negative ROCE, which is expected to turn positive as utilization increases.

Risks & concerns

  • Consumer Segment Profitability

    medium

    Consumer segment is currently loss-making and has negative ROCE due to being in a ramp-up phase with front-ended investments.

    Management acknowledged

  • Timeline for Overall PAT Positive

    medium

    The previously guided FY27 target for overall PAT positive is being re-evaluated due to increased customer demand and associated CapEx/depreciation in the consumer electronics segment.

    Management re-evaluating

Q&A highlights

6 direct
Consumer Segment Strategy and Q3 Margin Impact Direct
Back in 2016-2017 is when we expanded into consumer from aerospace. The thesis at that time was our capability -- if you really look at precision manufacturing and also the requirement on what is needed for the toys industry was pretty similar with respect to compliance and regulations.

Clarifies the strategic rationale for entering the consumer segment and explains the current margin pressure as an early investment phase.

Asked by Bhavika Singhvi

Impact of Consumer Segment Losses on Overall Margins Direct
Maybe I'll just take that question and I'll just take the last part of that question. Again, if you see our segment results, if you see aerospace for the nine months reported, it's at 24% margins. So, the margins are healthy there. So that's the margin that you should reflect.

Management clarifies that aerospace margins are healthy (24% for 9M FY26) and not being 'wiped off', attributing overall margin impact to the consumer segment's ramp-up.

Asked by Bhavika Singhvi

Aerospace Order Book Execution and Future Guidance Direct
Thank you. For the first question in terms of order book, again, as mentioned, the order book is USD $814 million. We expect this to get delivered over the next five years. So, this order book is there upto about 2031.

Provides a clear timeline for the execution of the aerospace order book, indicating long-term revenue visibility.

Asked by Renuka Baid

Consumer Electronics Order Book, Scale-up, and Profitability Partial
See, timelines, I think, I mean, we'll, we'll have to see as it goes. I think today we are seeing a growth in the quarter. What I can say is the capacity that we have built is already fully committed by the customer. Now it's the question of how our ramp meets that requirement.

Highlights that consumer electronics demand is strong and capacity is committed, but specific timelines for profitability are still uncertain due to ramp-up pace.

Asked by Renuka Baid

Overall PAT Positive Timeline Re-evaluation Partial
I mean, look, our overall PAT being positive will be driven by the maturity of the consumer electronics business. And there are some dynamics which are coming in, especially with the customer being happy and asking us to increase the capacity, we need to make that call and evaluate how does that play out into our profitability timeline?

Management indicates that the previously guided FY27 target for overall PAT positive is under review due to new opportunities and associated CapEx in the consumer segment.

Asked by Ashok Kumar

Aerospace EBITDA Margin Profile Direct
For the nine months, our margins have been 24% and we continue to see the margin range in 20% plus range. I think important thing while we will not comment on other companies, I think important thing to see is the scale at which we are operating, which is significantly larger as compared to the competitors you're referring to.

Confirms the expected long-term EBITDA margin for the aerospace segment and emphasizes the company's scale as a differentiator.

Asked by Rachna P

Aerospace Utilization and CapEx Direct
So in regards to the aerospace, currently, our utilization in India is around 71%. Overall, typically, we see utilization of around 75%. That's where we guide our utilization to be reaching.

Provides current and target utilization levels for the aerospace segment, indicating headroom for growth without immediate large-scale CapEx.

Asked by Rachna P

Continuous CapEx in Aerospace Direct
There's CapEx which continues to happen in the aerospace. We had CapEx last quarter, in Q3 as well, and you will see some in Q4 also. It is continuous CapEx. It's not lumpy CapEx in aerospace, because we win orders and look at the capacity over 18 months, but it's required because the lead times to get machines in aerospace is long.

Clarifies that aerospace CapEx is ongoing and strategic, driven by order wins and long lead times for machinery, rather than large, infrequent investments.

Asked by Dev Thacker

2 min read 5 chapters

Detailed narrative

Strong Financial Performance in Q3 and Nine Months FY26

Aequs Limited reported robust financial results for Q3 FY26, with revenue from operations growing 51% YoY to INR 326.2 crores. EBITDA saw an impressive 353% YoY increase to INR 38.1 crores, achieving a 12% margin. For the nine months ended December 31, 2025, revenue stood at INR 863.3 crores, up 28% YoY, and EBITDA grew 85% to INR 122.2 crores, improving the EBITDA margin from 10% to 14% YoY. Despite a negative PAT of INR 42.6 crores in Q3, adjusted PAT (excluding one-time expenses) was negative INR 25.9 crores, reflecting the investment phase in the consumer segment.

Aerospace Segment: Anchor of Profitability and Growth

The aerospace segment continues to be the primary revenue driver, contributing 86% of the nine-month FY26 revenues. Segment revenue for nine months was INR 742.4 crores, growing 26% YoY, with a strong EBITDA of INR 180.3 crores, up 62% YoY. The segment maintained a healthy EBITDA margin of 24% and an ROCE of 18.5% for the nine-month period. The order book for aerospace stands at USD 814 million, providing revenue visibility for the next five years until 2031. Current utilization in India for aerospace is 71%, with a target to reach 75%.

Consumer Segment: Rapid Growth with Initial Losses

The consumer segment demonstrated significant growth, with Q3 FY26 revenue increasing 157% YoY to INR 57.7 crores, and nine-month revenue up 39% to INR 120.9 crores. This segment contributed 14% to the nine-month revenues. However, it is currently in a scale-up phase, leading to a widened EBITDA loss of INR 15.9 crores in Q3 and a 9% YoY fall in nine-month EBITDA to INR 31.0 crores. Management expects profitability to improve as utilization increases, with a target EBITDA margin of 18-20% at ideal utilization, similar to aerospace.

Strategic Partnerships and Ecosystem Development

Aequs emphasizes its integrated manufacturing ecosystem and strategic partnerships. The company has partnered with Magellan Aerospace for surface treatment and Aubert & Duval for forging. Recently, it formed joint ventures with Accel India and Vagus Defense to enter the design and manufacturing of unmanned aerial vehicles for India's defense sector. In the consumer segment, a partnership with Brazilian multinational Tramontina aims to tap the global cookware market. The company also received PLI incentives approval for electronic component manufacturing, specifically for mechanical enclosures in the consumer electronics segment.

Capital Structure Improvement and Continuous CapEx

Following its IPO, Aequs has significantly improved its capital structure, with net debt to equity sharply reduced to 0.1X as of nine months FY26. Total assets increased from INR 1860 crores in March 2025 to INR 3050 crores in December 2025, reflecting IPO proceeds and investments in the consumer segment. CapEx in aerospace is continuous and planned 18-24 months out based on order book, rather than lumpy, due to long lead times for machinery. Most of the planned CapEx for the current fiscal year is already completed, with some capitalization expected in Q4.

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