Aeroflex Neu Limited — Q2 FY26 earnings call

Call held 18 Nov 2025

Management summary

Sahasra Electronic Solutions reported a satisfactory H1 FY26, with revenue of ₹58.16 crores and a strong PAT margin of 15.49%. The company is pivoting towards the domestic market, expanding SMT capacity, and has secured a key eSIM manufacturing contract. A strategic merger of group entities is underway to consolidate operations and enhance value, despite initial delays in the semiconductor segment.

Highlights

  • H1 FY26 Revenue of ₹58.16 crores, positioning the company well against its FY26 guidance of ₹130 crores.

  • PAT margin saw a substantial increase to 15.49% in H1 FY26, up from 9.13% in the previous full year.

  • EBITDA margin remained healthy at 12.63%, demonstrating cost control and operational efficiency.

  • Secured a final contract for eSIM manufacturing with a European client, with production slated to begin from March next calendar year, projecting ₹20-25 crores in revenue for the first year.

  • Initiated a strategic merger process for three group entities, including an unlisted company with projected FY26 revenue of ₹90-100 crores and a PCB company with projected FY26 revenue of ₹18-20 crores, aiming to enhance value and operational synergies.

Concerns

  • H1 for Sahasra Semiconductors was less exciting due to delays in eSIM approval cycles, pushing production to next calendar year.

  • Memory business experienced a slow first half due to very low prices, though management noted a recent recovery due to AI demand.

  • Acknowledged a 'difficult year' in FY24-25 primarily due to a fall in export business, though efforts to pivot to domestic markets are showing recovery.

Key financials

  1. Revenue ₹58.16 Cr
  2. EBITDA Margin 12.6%
  3. PAT Margin 15.5%
  4. Total Assets (Listed Entity) ₹31 Cr
  5. Total Assets (Consolidated) ₹143 Cr

What they filed

Q4 FY26: revenue up 56.0%, net profit up 250.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue29 46 32 50 30 +2%61 +33%31 −4%78 +56%
EBITDA2 8 1 -1 1 −55%11 +38%2 +43%8 +900%
Net profit0 2 0 -4 1 +170%6 +200%1 6 +250%
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.

Order book

medium confidence

Composition

Mix 2 geographies
  • Export 52.5%
  • Domestic 47.5%

Share of order book by geography

The order book is healthy enough to maintain current momentum, supported by new SMT lines and a pivot towards the domestic market.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹15 Cr For ISM 2.0 capex of INR 200 crores, INR 100 crores will be a government grant, and the remaining INR 100 crores will be investor contribution (INR 50 crores from promoter/internal generation and INR 50 crores from debt financing through banks).
    • Bringing in two other SMT lines, along with other peripheral equipment ₹15 Cr
    • ISM 2.0 Capex (total project cost) ₹200 Cr
    So, this will be to the tune of INR15 crores, whereby we will be bringing in two other SMT lines, along with other peripheral equipment... when we are envisaging INR200 crores, there is a new ISM scheme coming up... whereby for packaging and advanced packaging, they would support by 50%... INR100 crores would be grant... remaining INR100 crores has to be put by the investor... INR50 crores or thereabouts in terms of promoter contribution and INR50 crores will come from debt financing through banks.
  • M&A Sahasra Electronics Private Limited Merger · Announced

    To bring more value to the shareholders of the company and consolidate operations in the same domain.

    Expected to achieve a turnover of INR90-100 crores with a PAT of INR8-10 crores in FY26.

    The companies in question are this unlisted company called Sahasra Electronics Private Limited, which is also in the same domain... we are expecting that in this year, they would also achieve a turnover of about INR90 to INR100 crores with a PAT of about INR8 to INR10 crores.
  • M&A PCB company Merger · Announced

    Strategic merger as PCBs are a critical input to the EMS business.

    Revenue this year is expected to be anywhere in the range of INR18 to INR20 crores.

    Then there is another company where we make PCBs, which is a very important input to our EMS vertical... Their revenue this year is expected to be anywhere in the range of INR18 to INR20 crores.
  • M&A Skilling company Merger · Announced

    To provide skilled manpower for EMS and semiconductor packaging domains.

    Focus is on experience in skilling and providing skilled manpower rather than revenue.

    the third company, which is really a skilling company, which we would be merging so that more importantly, rather than the revenue there, we are looking at their experience in skilling, providing skilled manpower, both to our EMS business or the SMT business as some people call it, as well as to our semiconductor business.
  • Liquidity Liquidity disclosed INR 46 crores from IPO proceeds are currently available for procurement of other assets. A subsidy of INR 20-22 crores is expected from the government, which will help operations and reduce interest burden.
    only we have some INR46 crores right now, which will be used for the procurement of other assets... The amount of subsidy that we are looking at from receiving from the government is anywhere between INR20 crores to INR22 crores.

Guidance & targets

Revenue

  • Projected Revenue Revenue · FY26 · Medium confidence ₹130 crores
    our last guidance, we have given the projected revenue of INR130 crores.

    — Maneesh Tiwari

  • Semiconductor Revenue Revenue · FY26 · Medium confidence ₹10 crores
    for this financial year, we have projected about INR50-odd crores and I guess we'll be able to reach INR10 crores odd.

    — Paras Chheda (confirmed by Amrit Manwani)

  • Semiconductor Revenue Revenue · FY27 · Medium confidence ₹50 crores
    But for next year, we are again projecting INR50 crores.

    — Paras Chheda (confirmed by Amrit Manwani)

  • eSIM Revenue Potential Revenue · first year of production · Medium confidence ₹20-25 crores
    the revenue could depending upon the wafer value, could be around INR20 crores, INR25 crores.

    — Varun Manwani

  • Sahasra Electronics Pvt Ltd (merged) Revenue Revenue · FY26 · High confidence ₹90-100 crores
    they would also achieve a turnover of about INR90 to INR100 crores

    — Amrit Manwani

  • PCB company (merged) Revenue Revenue · FY26 · High confidence ₹18-20 crores
    Their revenue this year is expected to be anywhere in the range of INR18 to INR20 crores

    — Amrit Manwani

Profitability

  • EBITDA Margin Profitability · coming quarters · Medium confidence 12.63%
    management is trusting and they are hoping that we would be able to sustain this EBITDA in the coming quarters also.

    — Maneesh Tiwari

  • PAT Margin Profitability · coming quarters · Medium confidence 15.49%
    we are hoping that we will be able to maintain this profit in the coming quarters also.

    — Maneesh Tiwari

  • Sahasra Electronics Pvt Ltd (merged) PAT Profitability · FY26 · High confidence ₹8-10 crores
    with a PAT of about INR8 to INR10 crores.

    — Amrit Manwani

Volume

  • eSIM Units Volume · first year of production · High confidence 5-10 million units
    for the very first year, they are looking at anywhere between 5 to 10 million units, depending upon market conditions.

    — Varun Manwani

Margin

  • eSIM EBITDA Margin Margin · initial years, with volume ramp-up · Medium confidence 16-18% initially, 20%+ with volume
    our EBITDA margin in this would be about 18% to 20%... But initially, I would say 16% to 18% is what we can forecast or 16% to 20% as EBITDA margin.

    — Amrit Manwani

  • EMS/SMT PAT Margin Margin · sustainable · High confidence 15-16%
    PAT margin on the EMS business or the SMT business as you called it, I don't think it's 20%. It's more like 15% to 16%.

    — Management

  • Semiconductor EBITDA Margin Margin · initial years, with volume ramp-up · Medium confidence 16-18% initially, 20%+ with volume
    We are looking at EBITDA of 16% to 18% and as the volume increases, it may go up to 20 or more.

    — Management

  • Semiconductor PAT Margin Margin · initial years · Medium confidence 8-10%
    But the PAT margin would be, I think, somewhere hovering around 8% to 10% at least in the initial years.

    — Management

Subsidy

  • SPECS Subsidy Amount Subsidy · FY26 · High confidence ₹20-22 crores
    The amount of subsidy that we are looking at from receiving from the government is anywhere between INR20 crores to INR22 crores.

    — Amrit Manwani

Business Mix

  • Export Share Business Mix · ongoing · High confidence 50% and above
    We'll always be targeting 50% and above.

    — Varun Manwani

What to watch in Q3 FY26

eSIM Production Scale-up

next fiscal year (from March onwards)
Current Contract signed, assessment audit passed, production expected from March next calendar year.
Target Start of production and initial revenue realization.

Why it matters

This is a new, high-potential business segment expected to contribute significantly to future revenue and margins.

from the next financial, sorry, from the next calendar year, let's say from March onwards, we will start to look at making eSIMs on a production scale.

Risks & concerns

  • Delays in eSIM approval and production

    medium

    H1 for Sahasra Semiconductors was less exciting due to delays in the approval cycle of eSIMs, pushing production to March next calendar year.

    Management acknowledged

  • Low prices in memory business

    medium

    The memory business in the first half was slow due to very low prices, though recent growth in AI demand is improving the situation.

    Management acknowledged

  • Global market uncertainty and US tariffs impacting exports

    medium

    Uncertainty in the global market and US tariffs have affected export business in recent quarters, though positive trade deal signs are emerging.

    Management acknowledged

  • Lower initial margins in semiconductor business due to industry maturity

    low

    The semiconductor industry in India is less mature, leading to lower initial EBITDA (16-18%) and PAT (8-10%) margins compared to EMS.

    Management acknowledged

Q&A highlights

8 direct
Clarification on Fixed Asset Write-off Direct
it is considered as a part of the profit in the listed company and considered as a interest and therefore booked as a book loss. And that has been negated in the consolidated statement that has been provided. And, in fact, this also answers the previous question that was there that INR4.27 crores that he was mentioning, the earlier investor who -- Mr. Paras Chheda who raised that question of sundry balance write-off, that was actually on account of the interest paid to the parent company.

Clarified a perceived ₹4.27 crores write-off as an inter-company interest payment, resolving a potential concern about asset impairment.

Asked by Paras Chheda

Semiconductor Business Projections and Commitments Direct
for the very first year, they are looking at anywhere between 5 to 10 million units, depending upon market conditions... the revenue could depending upon the wafer value, could be around INR20 crores, INR25 crores.

Provided specific unit and revenue targets for the new eSIM business for the first year, offering concrete guidance for a key growth area.

Asked by Paras Chheda

eSIM Business EBITDA Margin Direct
our EBITDA margin in this would be about 18% to 20%. But going forward as the volumes ramp up... But initially, I would say 16% to 18% is what we can forecast or 16% to 20% as EBITDA margin.

Gave initial and potential EBITDA margin guidance for the eSIM business, crucial for understanding its profitability contribution.

Asked by Paras Chheda

SPECS Subsidy Disbursement Timeline and Amount Direct
The amount of subsidy that we are looking at from receiving from the government is anywhere between INR20 crores to INR22 crores... in the next six to eight weeks thereafter, the government will be able to disburse.

Provided a specific amount and timeline for a significant government subsidy, which will impact liquidity and interest burden.

Asked by Paras Chheda

ISM 2.0 Capex Funding and Timeline Direct
when we are envisaging INR200 crores, there is a new ISM scheme coming up... whereby for packaging and advanced packaging, they would support by 50%... INR50 crores or thereabouts in terms of promoter contribution and INR50 crores will come from debt financing through banks.

Detailed the funding structure for a large potential capex, including government grants, internal accruals, and debt, and indicated the expected announcement and activity timeline.

Asked by Paras Chheda

Depreciation Rate Calculation Direct
depreciation is being charged on straight-line methods... based on the number of days the assets have been utilized... some other assets have been acquired in subsidiary company, but the assets have been used for lesser days, some assets which have been used for the full year.

Explained the methodology behind the depreciation rate, clarifying why it might appear low on a consolidated basis.

Asked by Manik Gautam

New SMT Line Capacity Direct
each of these modules has a capacity of 50,000 CPH. So, on one line it will be 150,000 CPH and the other it will be 100,000 CPH.

Provided specific capacity figures for the new SMT lines, indicating the company's enhanced production capabilities for large volume projects.

Asked by Manik Gautam

Merger Details and Target Financials Direct
unlisted company called Sahasra Electronics Private Limited... achieve a turnover of about INR90 to INR100 crores with a PAT of about INR8 to INR10 crores... PCB company... revenue this year is expected to be anywhere in the range of INR18 to INR20 crores.

Disclosed the names and projected financials of the key entities involved in the merger, providing clarity on the strategic move.

Asked by Abhay Jain

2 min read 6 chapters

Detailed narrative

H1 FY26 Performance Overview

Sahasra Electronic Solutions reported a satisfactory first half for FY26, with a turnover of ₹58.16 crores. The company is on track to meet its projected revenue guidance of ₹130 crores for the full fiscal year, with expectations for a stronger second half. Profitability saw a significant uplift, with PAT margin improving to 15.49% from 9.13% in the previous full year, while the EBITDA margin was maintained at a healthy 12.63%.

Strategic Pivot to Domestic Market and Capacity Expansion

Following a challenging FY24-25 due to a decline in export business, Sahasra is actively pivoting towards the domestic market. The export share, which was 85-90% previously, is now 50-55%, with domestic contributing 45-50%. To support this, the company invested ₹15 crores in two new high-speed SMT lines and peripheral equipment at its Bhiwadi unit, complementing existing high-capability lines. The full building at Bhiwadi is nearing completion and is expected to be fully operational in the next couple of months.

Semiconductor Business Developments

The semiconductor subsidiary, Sahasra Semiconductors, faced delays in H1 FY26 due to eSIM approval cycles. However, a final contract for eSIM manufacturing with a European client was signed in October, and an assessment audit was passed in November. Production is slated to begin from March next calendar year, targeting 5-10 million units and ₹20-25 crores in revenue for the first year, with an initial EBITDA margin of 16-18%. The memory business, slow in H1 due to low prices, is seeing recovery driven by AI demand.

Government Subsidies and Future Capex Plans

The company has applied for a SPECS subsidy of ₹20-22 crores, with IFCI completing its due diligence. Disbursement is expected 6-8 weeks after November-end, which will aid operations and reduce interest burden. Looking ahead, Sahasra is planning a ₹200 crores capex under the upcoming India Semiconductor Mission Scheme 2.0. This capex will be funded by a 50% government grant (₹100 crores) and 50% investor contribution (₹50 crores from internal accruals and ₹50 crores from debt).

Strategic Mergers for Value Creation

Sahasra has initiated a merger process for three group entities to enhance shareholder value and operational synergies. This includes an unlisted company, Sahasra Electronics Private Limited, projected to achieve ₹90-100 crores in revenue and ₹8-10 crores PAT in FY26. A PCB manufacturing company, critical for EMS inputs, with projected FY26 revenue of ₹18-20 crores, is also part of the merger. Additionally, a skilling company will be merged to ensure a steady supply of skilled manpower for EMS and semiconductor packaging.

Market Diversification and Margin Outlook

The company is actively diversifying into new market segments such as EV accessories, metering for exports, GPS tracking, personal grooming products, and industrial solutions. Management aims to maintain EMS/SMT PAT margins at 15-16%. For the semiconductor business, initial EBITDA margins are projected at 16-18% (potentially 20%+ with volume) and PAT margins at 8-10%, acknowledging the nascent stage of the Indian semiconductor industry.

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