Aeroflex Industries Q1 FY27: Record Quarter as Liquid Cooling Skids Scale Up

Aeroflex Industries Limited reported its highest-ever quarterly performance for Q1 FY27 (quarter ended June 30, 2026). On a consolidated basis, total income rose to 145.97 crore, up 72.41% year-on-year. Profitability expanded faster than revenue. EBITDA grew to 33.49 crore, up 116.38%, with EBITDA margin improving to 23.04% from 18.35% a year ago. Profit after tax increased to 18.79 crore, up 162.22%, and PAT margin expanded to 12.87%.

Management attributed the outperformance to broad-based growth across product segments and sustained demand across domestic and export markets. A key change in the mix was the acceleration in the company’s liquid cooling solutions business, where SFN skid assemblies delivered 32.4 crore of revenue in Q1 FY27. The managing director positioned this as a strategic step in the company’s evolution from a flexible hose manufacturer to an integrated provider of flow control and flow management solutions for mission-critical applications.

What drove the quarter: a stronger mix and operating leverage

Aeroflex’s core portfolio of stainless-steel flexible hoses and assemblies continued to grow, but the quarter’s defining feature was the scale-up in SFN skid assemblies for data center liquid cooling. The company reported that skid assemblies are engineered for reliability, pressure management and leak prevention, and are installed inside data center white space as compact, plug-and-play systems.

The export mix also shifted. The presentation shows exports at 58% and domestic at 42% in Q1 FY27, compared to 72% exports and 28% domestic in Q1 FY26. Management linked the higher domestic contribution to the rapid ramp in skid assembly supplies.

Europe’s export share increased in the quarter, and on the call management said growth was spread across countries including Italy, Spain, France and the UK, with supplies spanning traditional industries as well as data center applications.

Liquid cooling skids: scaling volumes, capacity and customer relevance

The company disclosed a clear operational snapshot of its skid business. In Q1 FY27, it sold 1,040 skids at an average price of 3,11,459 per skid, generating 32.4 crore. For context, it reported 571 skids in Q4 FY26 and 46 skids in Q3 FY26. Management cautioned investors against reading too much into average price per skid trends, noting that skid designs vary widely by data center and even by floor within a project, so value per unit changes with design complexity.

Aeroflex has been scaling capacity to meet a growing demand pipeline. Management said skid capacity has already expanded from 6,000 skids per annum to 9,000 skids per annum and remains on track to reach 15,000 skids per annum. The company also provided capex disclosure on the call, stating that it budgeted 48 crore to scale skid capacity from 2,000 to 15,000 skids per annum.

On timing, management indicated that commissioning of the 15,000 capacity is expected in Q3 FY27, likely between October and November, with the exact month dependent on machinery suppliers. Once commissioned, management expects optimum utilization in FY28 and described optimum utilization as about 80%.

The strategic thesis is tightly linked to the broader shift in data center cooling. The presentation cites the rise of AI workloads driving higher rack densities and heat generation, accelerating the industry-wide transition from air cooling to advanced liquid cooling. It also highlighted India as an emerging data center market supported by cloud adoption, data localisation and rising digital consumption.

Core business and new product pipeline: hoses, assemblies, bellows and fire hose assemblies

While the skid business attracted most investor attention, management also shared data points that help frame the core business.

On flexible hoses, management said the company is currently operating at about 65% to 66% capacity utilization. It plans to increase hose production capacity from 17.5 million meters per annum to 20 million meters per annum by Q3 FY27. On capex, management stated the budget for increasing flexible hose capacity from 16.5 to 20 million meters per annum was about 54 crore, spent across FY25, FY26 and FY27, with completion expected by Q3 FY27.

In terms of margin structure, management said hose-only sales typically deliver margins in the 16% to 20% range, while assemblies deliver margins in the 22% to 26% range. The company’s longer-term target, as stated on the call, is to achieve a 25% EBITDA margin at the overall company level over the next few years.

Aeroflex also disclosed smaller segment revenue indicators on the call. Hyd-Air contributed about 7 crore of revenue in the quarter, and metal bellows contributed about 3 crore, with miniature metal bellows included within the metal bellows number. Management expects an uptick in bellows sales over the next two quarters.

A notable near-term product milestone is fire hose assemblies for data centers. Management said this product is close to completion and should be commercialized by the end of the quarter or latest by the start of the next quarter, and supply is intended for international markets. On margins, management stated fire hose assemblies deliver margins in the 23% to 26% range.

Costs, execution factors and what to watch

Despite the strong year-on-year margin expansion, management acknowledged some quarter-on-quarter pressure drivers. It attributed higher employee costs and other expenses to ramping manpower for the skid business, the SFN facility in Taloja, and the setup of a plant at Chakan in Pune. Management also pointed to higher logistics costs due to the West Asia crisis, stating that the real impact intensified during Q1.

On customer visibility, management indicated that dispatch schedules for skids are typically received about two months in advance, and the company gets tentative indications for projects expected in the next quarter as designs move toward approval.

The company is also investing in systems. The presentation described a digital transformation program including SAP ERP for finance, inventory and production planning and Salesforce CRM for end-to-end commercial lifecycle tracking, intended to create a connected operational backbone.

Takeaways

Aeroflex delivered a record Q1 FY27 with sharp growth in revenue and even stronger growth in EBITDA and PAT, supported by mix improvement and scale-up in a new vertical. The SFN skid assemblies business is now a visible contributor, with 32.4 crore of revenue in the quarter and capacity scaling toward 15,000 skids per annum.

The next checkpoints are operational. Investors will likely watch the commissioning timeline for the 15,000 skid capacity in Q3 FY27, the pace of utilization ramp into FY28, and how the company balances expansion-linked operating costs with margin ambitions. Alongside, commercialization of fire hose assemblies and the expected uptick in bellows sales could add incremental support to the company’s growth narrative.