Aequs ends FY26 with record Q4 revenue, but consumer ramp-up keeps profits negative

Aequs Limited closed FY26 with its strongest quarterly revenue to date, reflecting scaling programs in aerospace and a sharp step-up in consumer contribution. For FY26, consolidated revenue rose 33% year on year to INR 12,304 million (INR 1,230.4 crore). EBITDA increased 43% to INR 1,545 million (INR 154.5 crore), with margin expanding to 13% from 12% in FY25.

The year also highlighted a familiar manufacturing trade-off. While the core aerospace business delivered scale and profitability, the consumer electronics ramp-up brought a full run-rate of operating costs and depreciation ahead of utilization. That dynamic was most visible in Q4. Revenue climbed 47% year on year to INR 3,671 million (INR 367.1 crore), but EBITDA fell to INR 321 million (INR 32.1 crore) and margin dropped to 9%. Reported PAT remained negative at INR 1,133 million (INR 113.3 crore) for FY26 and INR 541 million (INR 54.1 crore) for Q4.

FY26 performance: growth with improving operating leverage

Management described FY26 as a landmark year, citing business expansion and the company’s IPO. In addition to headline revenue growth, Aequs pointed to operating leverage as aerospace programs matured and scaled. The investor presentation attributed the FY26 net loss primarily to higher depreciation, taxation, and one-time expenses of INR 76 million related to share issue and labour code items.

The company also disclosed an alternate view of performance including proportionate joint venture share. On that basis, FY26 revenue was INR 13,466 million (INR 1,346.6 crore), up 34% year on year, and EBITDA was INR 1,830 million (INR 183.0 crore) with a 14% margin.

Segment picture: aerospace drives profits, consumer drives growth but drags margins

Aequs runs two reported business segments, Aerospace and Consumer. In FY26, aerospace contributed 85% of revenue, while consumer contributed 15%. In Q4, consumer’s share increased to 17% from 5% in Q4 FY25, reflecting a rapid scaling phase.

Aerospace revenue grew 27% year on year to INR 10,464 million (INR 1,046.4 crore). Management highlighted expansion of its qualified parts portfolio, adding 1,154 aerospace parts during FY26 to reach 5,654 SKUs. The aerospace order book was disclosed at USD 889 million, up 9% quarter on quarter, supporting revenue visibility.

Consumer revenue rose 84% year on year to INR 1,840 million (INR 184.0 crore), driven largely by consumer electronics production moving from pilot to commercial ramp-up. But profitability in the segment weakened as fixed costs arrived faster than utilization. The consumer segment posted an EBITDA loss of INR 783 million (INR 78.3 crore) in FY26 and INR 473 million (INR 47.3 crore) in Q4. Management stated Q4 was the first quarter where the full manufacturing cost base hit the P&L after commercial operations began in Q3.

Balance sheet and cash flow: better leverage, heavier working capital

Aequs ended FY26 with materially stronger leverage metrics. Net debt to equity declined to 0.23x from 0.99x in FY25. Cash and cash equivalents increased to INR 3,015 million (INR 301.5 crore) as of March 31, 2026, from INR 609 million (INR 60.9 crore) a year earlier.

At the same time, the cash flow statement and working capital metrics reflected the cost of rapid scale-up. Net working capital days increased to 151 from 132. Fixed asset turnover fell to 1.18x from 1.84x, which management linked to significant consumer electronics capex not yet generating proportionate revenues.

FY27 outlook: utilization as the key swing factor

Management’s FY27 commentary was explicit and numeric. For aerospace, the company guided for 25% to 30% revenue growth and maintaining EBITDA margins around 20% at the segment level. For consumer, the guidance was more aggressive: 125% to 150% revenue growth, with the company targeting consumer EBITDA break-even by Q4 FY27. At the consolidated level, Aequs guided for approximately 45% to 50% top-line growth.

The consumer plan hinges on utilization. Management stated consumer utilization was 23% in FY26 and is targeted to reach 40% to 50% by year-end FY27. Over time, management’s stated long-term target for consumer EBITDA margins is similar to aerospace, around 20%, with a comment in the Q&A that such steady-state margins would align with much higher utilization.

Capex will remain elevated. On the earnings call, management indicated FY27 capex of approximately INR 160 crores in aerospace and INR 500 crores in consumer. The company also stated FY27 would be the first year it expects to be eligible for PLI.

Strategy and operating context: capacity, customers, and execution risks

Aequs continues to position itself as an engineering-led precision manufacturing platform with vertically integrated capabilities, particularly in aerospace where machining, forging, surface treatment and assembly are co-located. The company emphasised that its integrated ecosystem supports lead times and execution reliability, supporting long-term OEM relationships.

In consumer, the company acknowledged a customer change in its plastics business. Management said Hasbro has revised its manufacturing and sourcing strategy and will stop raising purchase orders. It also stated that this decision was unexpected but should not materially impact overall consumer growth, and mentioned a long-term agreement with Mattel with an expectation of scaling volumes.

The company also provided operational details that underline the planning complexity of the aerospace supply chain. Management cited long lead times for certain raw materials, including steels with 65 to 75 weeks lead time and titanium at around 52 weeks.

Takeaways

FY26 showed strong execution on growth, especially in aerospace, and improving consolidated EBITDA margin. The pressure point remains the consumer electronics ramp-up, where fixed costs and depreciation are fully in the P&L while utilization is still low.

FY27 is framed by management as a utilization and operating leverage story. The clearest near-term checkpoints are consumer utilization improvement toward 40% to 50% and the target to reach consumer EBITDA break-even by Q4 FY27. The other watch item is leadership continuity in finance, as the CFO will step down at the end of June 2026 and the company is in the process of appointing a replacement.