This Ace Investor Ashish Kacholia stock which deals in the manufacturing and supply of metallic flexible flow products, expects to keep EBITDA margin upto 25 percent by FY27.
Share Price Movement
In the trading session, Aeroflex Industries Ltd‘s share price opened at Rs. 161.45 per share, which is 0.43 percent lower than the previous closing price of Rs. 162.15 per share.
In the past year, the stock has delivered around 12.80 percent and has outperformed the Nifty Index in the past year.
Shareholding Pattern
As of December 2024, The promoters of the company hold around 66.99 percent, FIIs hold 1.57 percent, DIIs hold 5.66 percent and the remaining 25.76 percent held by public investors. Ace Investor Ashish Kacholia held a 1.84 percent stake in the company and saw an increase from 1.81 percent in the September quarter.
Future Outlook
The company’s management aims for an EBITDA margin of 24 to 25 percent by FY27 conservatively with the support of the assembly business and the development of new products.
Further, the company’s margin in miniature metal bellows is expected between 30 to 35 percent while hose margins are between 15 to 19 percent and assembly margins from 22 to 25 percent.
Aeroflex is anticipating a significant impact on its revenue from automation projects in the assembly segment starting in Q4FY25 and they expect to see an impact from the next financial year.
Q3FY25 Financial Performance
In its latest filing for the quarter ending December 2024, the company reported a 36.46 percent rise in revenue, reaching Rs.99.79 crore compared to Rs.73.12 crore in Q3FY24. On a quarter-over-quarter basis, the operational revenue rose by 5.05 percent from Rs.94.99 crore in Q2FY25.
During the same period, net profit increased by 68.31 percent to Rs.15.2 crore in Q3FY25, compared to Rs.9.03 crore in Q3FY24, and increased by 11.35 percent from Rs.13.65 crore in Q2FY25. In Q3FY25, there is an exceptional item of Rs. 0.19 crore which is the diminution in the value of investment of its subsidiary based in the UK.
Aeroflex recognises the revenue from a single segment which is the manufacturing of products as of the December 2024 quarter.
Capital Expenditure Plans
The company announced a total capex plan amounting to Rs. 77 crore. The S S Hose and Braiding capacity is to increase from 16.5 MMPA to 20.0 MMPA, an increase of 3.5 MMPA with an investment of Rs. 54 crores which will be funded through internal accruals..
The expansion is to take place in Taloja, which is adjacent to the existing plant. The expansion plan to include Assembly Stations increases from 40 to 70.
Further, A new product “Miniature Metal Bellows”, is to be installed, with an annual capacity of 2,40,000 pieces with sizes ranging from 10mm to 50mm. This project is expected to be completed by March 2026 and the expected investment cost is projected at Rs. 23 crore for this expansion. which will be funded through internal accruals.Post expansion the capacity of Metal Bellows to be at 3,60,000 pieces per annum.
The Metal Bellow product will be used for Industries like Space & Aviation, Electronics, Robotics, Semiconductors, and Hydrogen & Clean Energy. Both the plans above are expected to be finished by March 2026. Further, the capex of Rs. 18 crore is for the Hyd-Air subsidiary out of which Rs. 6.5 crore is already spent.
Company Profile
Aeroflex Industries specializes in manufacturing stainless steel flexible flow solutions, including hoses and assemblies. They serve both domestic and international markets and they export to over 80 countries.
Written by – Santhosh S
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