Aeroflex Industries Limited: Engineering Growth and Innovation in Q2 FY26

Aeroflex Industries Limited, a specialist in metallic flexible flow solutions, has reported an exceptional performance for the second quarter and first half of the financial year 2026. The company achieved its highest-ever quarterly consolidated financial results, demonstrating robust growth and operational excellence across key parameters. Total revenue for Q2 FY26 reached INR 111.05 crores, marking a significant 16% year-on-year increase and a 31% quarter-on-quarter jump. This strong top-line growth was complemented by an impressive EBITDA of INR 26.06 crores, up 23% year-on-year, resulting in their best-ever EBITDA margin of 23.5%. Profit After Tax (PAT) also saw a healthy rise to INR 14.23 crores, a 4% increase year-on-year, while Cash PAT surged by 26% year-on-year to INR 20.33 crores, reflecting efficient cash generation.

The company's performance was significantly bolstered by its strategic initiatives and resilient business model. A notable contributor to revenue growth was the recently acquired Hyd-Air business, which increased its contribution to INR 9 crores in Q2 FY26, up from INR 3 crores in Q1 FY26, and turned profitable this quarter. This acquisition has proven its strategic value, enhancing Aeroflex's ability to develop advanced flow solutions and broadening its assembly presence. Furthermore, the company made significant progress in its liquid cooling solutions business, securing a second repeat order worth INR 7.8 crores for high-performance liquid cooling systems in data centers. This breakthrough marks a deeper integration into a rapidly growing market, positioning Aeroflex as a key player in next-generation cooling technologies.

Strategic Expansion and Market Diversification

Aeroflex Industries is firmly focused on expanding its capacities and diversifying its market presence. The company is undertaking significant organic growth initiatives, including capacity expansion for SS Flexible Hoses from 16.5 million meters per annum to 20 million meters per annum by March 2026. Similarly, assembly stations are increasing from 40 to 70, and Metal Bellows capacity is expanding from 120,000 to 300,000 pieces annually, with a new Miniature Metal Bellows capacity of 240,000 pieces annually. These expansions are expected to be completed by March 2026, with the hose division alone projected to achieve a revenue potential of INR 650-670 crores at peak utilization.

The company's product portfolio is strategically diversified, with value-added segments like assemblies contributing 53% of total sales in H1 FY26. Geographically, Aeroflex exports to over 90 countries across Asia, Americas, Europe, and Africa, with the US market being a significant contributor. Despite recent US tariffs, the company experienced no order cancellations, highlighting the quality and demand for its products. The domestic sales contribution also improved from 19% to 27%, driven by both Aeroflex's standalone business and Hyd-Air's performance. The company's ASME certification further endorses its capability to design and manufacture expansion joints and metal bellows for pressure-retaining systems, reinforcing its engineering and manufacturing excellence.

Innovation and Sustainable Practices

Innovation and sustainability are core pillars of Aeroflex's strategy. The company operates a dedicated in-house R&D laboratory, driving sustainable, high-quality innovation and continuous process improvements. This focus on R&D has led to the development of 58 products across various stages of R&D, supported by 16 qualified R&D professionals and an NABL-accredited lab. In line with its commitment to responsible corporate practices, Aeroflex has commissioned a 750 Kilowatts rooftop solar project, significantly reducing its reliance on non-renewable energy and lowering electricity costs. The company also implements green processes, including 100% water recycling and the use of electric vehicles for logistics, aiming for 100% recycled packaging materials in the next three years.

Outlook and Management Confidence

Management expressed confidence in sustaining growth, aiming for mid-to-high teens growth over the next few years. They anticipate the liquid cooling business to be a significant growth driver, with contributions expected from Q3 FY26 onwards. While acknowledging the impact of US tariffs, management expects a resolution by the end of the calendar year, leading to an uptick in demand from the US market. The company's consistent focus on enhancing its product portfolio, expanding capacity, improving productivity through automation, and geographic diversification positions it for continued market leadership and consistent shareholder returns. Aeroflex Industries Limited is clearly demonstrating strategic clarity and disciplined execution, building a strong foundation for future value creation.