Aeron Composite Limited: Forging Ahead with FRP and Carbon Fiber in H1 FY26

Aeron Composite Limited, a prominent player in the advanced materials sector, recently shared its performance for the first half of fiscal year 2026, alongside strategic insights during its earnings conference call. The company, known for its Fiber Reinforced Polymer (FRP) solutions, reported a revenue from operations of INR116.7 crore, with an EBITDA of INR8.7 crore and a PAT of INR7.2 crore. While the first half saw some operational adjustments, management expressed confidence in a stronger second half, projecting a 10% EBITDA margin for the full FY26 and a minimum 15% year-on-year revenue growth for FY27, targeting around INR300 crore.

The company's performance in H1 FY26 was marked by steady execution and significant progress in strengthening its manufacturing capabilities and product portfolio. Aeron Composite is strategically positioned as a 360-degree FRP solution provider, catering to diverse sectors including utilities, telecom, oil & gas, renewable energy, and industrial applications. Its offerings span structural profiles, gratings, rods, poles, and rebars, serving as lightweight, corrosion-free alternatives to traditional materials like steel and aluminum.

Strategic Expansion and New Product Verticals

Aeron Composite's strategic moves are clearly aimed at capitalizing on the evolving demand for advanced materials. A significant development in H1 FY26 was the commissioning of its new, fully owned 51,671 sq. mtr. manufacturing facility in Mehsana, Gujarat. This facility is set to expand installed capacity to 22,000 MT by H2 FY26, with a full ramp-up expected over the next few quarters. This expansion is crucial for boosting production, improving efficiencies, and supporting new growth lines, including the newly introduced GFRP Rebar and upcoming Carbon Fiber products. The company anticipates substantial cost savings from this new facility, including approximately INR36 lakhs per month in rent.

The company's entry into the GFRP Rebar segment in FY25 is a strategic diversification into a high-growth infrastructure category. Commercial sales for GFRP Rebar commenced in March 2025, with two dedicated lines already operational and plans to expand to five lines by FY26. GFRP Rebars, being rustproof, high-strength, and significantly lighter than TMT steel, are gaining traction in roads, bridges, tunnels, and water treatment facilities. The product is qualified under IS 18255:2023, positioning Aeron among a few certified domestic suppliers.

Looking ahead, Aeron is preparing for its next strategic milestone: a foray into Carbon Fiber Reinforced Polymer (CFRP) products. This high-performance, high-margin segment targets demanding sectors such as wind energy, railways, and automotive. The pilot plant for Carbon Fiber products is expected to be operational in FY27, with full operational status targeted for FY28 after necessary approvals. This move aligns with Aeron's long-term diversification strategy and aims to offer premium margins over GFRP.

Operational Efficiency and Market Dynamics

Operational efficiency remains a key focus for Aeron Composite. The company aims for over 70% utilization by FY27 through automation, process upgrades, and scale efficiencies across its pultrusion, gratings, rods, and rebar lines. Furthermore, Aeron is committed to sustainability, leveraging a 1.2-megawatt solar plant and promoting FRP/CFRP as low-carbon, corrosion-free alternatives that reduce life-cycle costs for customers.

Geographically, Aeron maintains a strong global presence, exporting to over 39 countries, with exports contributing 55% of total revenue in H1 FY26. While export revenue was flat in H1 FY26 due to order delays and US tariff negotiations, management is proactively seeking to mitigate this by engaging with non-US customers. The domestic market continues to show strong traction, supported by government initiatives promoting eco-friendly construction materials.

Outlook and Investor Confidence

Despite the challenges in H1 FY26, including operational adjustments due to the facility shift and flat exports, Aeron Composite's management remains confident in its strategic direction. The company's robust balance sheet, characterized by strong liquidity and low debt, provides a solid foundation for continued investment in expansion and innovation. Management acknowledged a slight deterioration in trade receivables from FY24 to FY25 but assured that measures are being taken to improve this in H2 FY26.

The Indian composite sector is experiencing rapid growth, with consumption projected to reach 768,200 tonnes by 2027. Aeron Composite is well-positioned to benefit from this industry tailwind, driven by increasing infrastructure investments and a shift towards advanced, sustainable materials. The company's focus on integrated solutions, new product development, and operational efficiency underscores its commitment to long-term value creation and sustained growth in the evolving FRP and advanced composites market.