Aequs Q2 results: Loss widens to ₹52 crore despite 45% revenue growth

Strong aerospace order book growth and long-term contracts are being offset by widening losses in the consumer segment due to slower volume ramp-ups and supply chain hurdles. Promoters are stepping in with a substantial capital infusion to fund expansion. How will leadership accelerate consumer brea...

Contract manufacturing company Aequs reported a consolidated loss of ₹52.3 crore for the second quarter of FY27, compared with a loss of ₹21 crore in the year-ago period, despite a 45% year-on-year increase in revenue to ₹409 crore.

EBITDA declined 51.7% year-on-year to ₹14 crore from ₹29 crore. EBITDA margin contracted to 3.37% from 10% in the corresponding quarter last year.

For the first half of FY27, consolidated revenue grew 50% year-on-year to ₹804.6 crore, driven by growth in the aerospace and consumer businesses.

Including proportionate contributions from joint ventures (JVs), Q2 revenue stood at ₹448 crore, up 44% year-on-year and 4% sequentially. EBITDA, including JV contributions, declined 36% year-on-year to ₹33.1 crore, although it increased 8% quarter-on-quarter.

Aerospace business drives growth

Aequs' aerospace revenue grew 44% year-on-year to ₹351.4 crore in Q2 FY27. For the first half, revenue increased 42% to ₹673.6 crore.

Aerospace EBITDA rose 24% year-on-year to ₹78.3 crore in the second quarter and 29% to ₹151.4 crore in the first half.

The company's aerospace order book reached $1.1 billion, growing 9% quarter-on-quarter. Aequs said its agreement with Safran for A320 aircraft wheels marks its first serial-production contract with a tenure exceeding 15 years.

The company expanded its aerospace product portfolio to 5,978 stock-keeping units (SKUs), adding 238 parts during the quarter. It also added nine aerospace computer numerical control (CNC) machines, taking the segment's total to 229.

Aequs also signed new long-term supply agreements with Safran, expanding its relationships to six entities and broadening its manufacturing scope across critical aerospace components.

Consumer ramp-up remains slower than expected

Revenue from the consumer business increased 52% year-on-year to ₹57.7 crore in Q2 FY27. First-half revenue more than doubled to ₹131 crore, rising 107% year-on-year.

However, the consumer business's EBITDA loss widened to ₹40.1 crore in Q2 from ₹36.1 crore in Q1. The loss for the first half stood at ₹76.3 crore.

The company said the second-quarter volume ramp-up progressed slower than anticipated due to extended qualification timelines and supply chain constraints. The gradual ramp-up also affected cost absorption.

Executive Chairman and CEO Aravind Melligeri said the company viewed the delay as a timing-related shift rather than a change in the underlying opportunity.

He added that Aequs was recalibrating the path to consumer EBITDA breakeven, with a focus on improving utilisation and translating installed capacity into profitable growth.

Promoter investment to support expansion

Aequs said a ₹650 crore investment by the promoter group through preferential warrants would support its next phase of capacity expansion, strategic JV investments and working capital requirements.

Capital expenditure stood at ₹159.7 crore in the first half of FY27, with the company continuing to invest in manufacturing capabilities, including its upcoming Hosur manufacturing ecosystem.

Melligeri said the company's focus remained on disciplined execution and stronger returns as it expands its manufacturing capabilities and long-term customer partnerships.

Aequs shares closed 2.10% higher at ₹240.50 on the NSE on October 26, gaining ₹4.95, ahead of the company's second-quarter results.