Aequs Ltd Q1 FY27 Earnings Analysis

- Aerospace segment targeting 25-30% revenue growth in FY27 with long-term guidance of 20%+ CAGR over 5-10 years, supported by a large order book and expanding engine components portfolio. - Consumer segment expects 125-150% revenue growth in FY27 driven by ramp-up in consumer electronics capacity and new client wins like Mattel. - Consumer electronics utilization targeted to increase from current 23% to 40-50% in FY27, with EBITDA breakeven expected by Q4 FY27. - Long-term consumer business margins aimed to reach 18-20% at around 75-80% utilization. - Additional capex of INR 500 crore planned for consumer segment in FY27 to support scale-up based on clear customer demand. - Aerospace growth supported by supply of over 100-150 parts per month and integrated offerings, with high confidence in sustaining 20%+ margins. - Overall, Aequs projects strong volume and revenue growth fueled by capacity expansion, customer confidence, and diversified product offerings.

- **Consumer Segment** - Expected EBITDA breakeven by Q4 FY27 as utilization improves from current 23% to 40%-50%. - Revenue growth guidance of 125%-150% in FY27. - Long-term goal of achieving EBITDA margins similar to aerospace (~20%). - Significant planned capex (~INR 500 crores in FY27) to support ramp-up and meet customer demand. - **Aerospace Segment** - Targeting 25%–30% revenue growth in FY27 with sustained EBITDA margins around 20%. - Long-term growth rate of 20%+ CAGR over the coming years supported by increasing order book and expanded product portfolio. - Continued margin stability despite growing scale and vertical integration. - **Overall** - Consolidated profitability expected to reach break-even in H1 FY28. - Improved ROCE in Aerospace (20% in FY26) signals efficient scaling. - Funding capex largely through a mix of internal accruals and debt, maintaining healthy net debt/equity ratio at 0.23 (FY26).

- Planned investment of INR 2,800 crores over the next 5 years in Karnataka, covering Belgaum and Hubli clusters. - For FY27, consumer division capex planned at INR 500 crores. - Aerospace segment capex planned at approximately INR 160 crores for FY27. - Capex funded through a combination of internal accruals (INR 660 crores planned this year) and debt funding. - Additional consumer segment capex driven by clear customer demand and the need to scale up capacity to meet India's manufacturing requirements. - Consumer electronics gross block currently about INR 830 crores; with planned additions of INR 500 crores, aiming for asset turnover of around 1.5x. - Focus on maximizing utilization of assets and absorbing capacity from clients like Hasbro and Mattel to support business ramp-up.

- For FY27, Aequs Limited plans to fund capex primarily through a mix of internal accruals and debt. - Approximately INR660 crores of capex this year is expected to be funded via internal accruals. - The balance capex funding will be leveraged through debt borrowings. - No specific breakdown of debt vs. internal accrual funding was provided publicly; management offered to discuss details offline. - There is no mention of any planned equity fundraising in the near term. - The company is well capitalized with an improved net debt-to-equity ratio of 0.23 as of March 31, 2026, indicating comfortable leverage for upcoming investments. - Overall capex planned over five years in Karnataka is INR2,800 crores, including consumer and aerospace segments, to be funded mostly through internal accruals and debt.

- Aerospace order book as of May 26, 2026, stood at USD 889 million. (Page 5) - The aerospace order book represents a robust backlog with a 26% increase in the portfolio since last year, comprising 5,654 SKUs. (Page 5) - The order book supports a revenue growth guidance of 25% to 30% for FY27 in aerospace, indicating strong pending orders and customer engagements. (Page 8) - The consumer segment is in a ramp-up phase with increasing capacity and product additions, targeting utilization growth from 23% to 40-50% by year-end FY27. (Pages 5, 9) - Long-term multiple-year opportunities are expected in aerospace with continued portfolio expansion into engine components and landing gear. (Pages 5, 16)