AEROFLEXNSEQ4 & FY26May 11, 2026

Aeroflex Industries Limited

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Management on call

Asad Daud

MANAGING DIRECTOR &

Key numbers — 40 extracted

rs,

members of our senior management team, along with the representatives from Strategic Growth Advisors, SGA, who are our Investor Relations Partner. I hope you have had the opportunity to review our fin

20%

mance up to date. I'm also happy to share that the Board has also recommended a final dividend of 20%, which translates to about INR0.40 per equity share of face value INR2 each. This reflects our co

INR0.40

y to share that the Board has also recommended a final dividend of 20%, which translates to about INR0.40 per equity share of face value INR2 each. This reflects our continued commitment to delivering v

INR2

mmended a final dividend of 20%, which translates to about INR0.40 per equity share of face value INR2 each. This reflects our continued commitment to delivering value to our shareholders. The compan

23.86%

ustries and also our established global customer presence. We have achieved an EBITDA margin of 23.86% in Q4, which also reflects our strong operating leverage and also is a result of the continued im

INR21.2 crore

siness with the sales of 617 skid assemblies, which resulted in an overall sales of approximately INR21.2 crores, and this has been done over the last 4 months itself. This performance shows the increasing m

INR126.5 crore

coming years. Now talking about our financial performance for Q4 FY26, our total income stood at INR126.5 crores, which is a growth of 38% on a year-on-year basis, which is driven by an improved product mix an

38%

inancial performance for Q4 FY26, our total income stood at INR126.5 crores, which is a growth of 38% on a year-on-year basis, which is driven by an improved product mix and a growing contribution fr

INR30 crore

mix and a growing contribution from value-added solutions. The EBITDA for the quarter came in at INR30 crores, which is a robust growth of 59% on a year-on-year basis. And our EBITDA margin also saw an impr

59%

-added solutions. The EBITDA for the quarter came in at INR30 crores, which is a robust growth of 59% on a year-on-year basis. And our EBITDA margin also saw an improvement of 326 basis points, and

326 basis point

a robust growth of 59% on a year-on-year basis. And our EBITDA margin also saw an improvement of 326 basis points, and it came at about 23.86%. The profit after tax stood at INR17.6 crores, which is a growth of

INR17.6 crore

aw an improvement of 326 basis points, and it came at about 23.86%. The profit after tax stood at INR17.6 crores, which is a growth of 57% on a year-on-year basis with a PAT margin of almost 14%. Our cash prof

Guidance — 20 items

Asad Daud

opening

“I'm happy to report that FY26 has been a great year for the company, where our execution excellence, our strategic expansion and the market opportunity have all come together to deliver the highest ever quarterly and yearly performance up to date.”

Asad Daud

opening

“FY26 has been a landmark year, which has been marked by our successful entry into the skid assemblies and advanced flow control solutions for high-performance liquid cooling applications, which are used specifically in data centers and AI infrastructure segment.”

Asad Daud

opening

“This performance shows the increasing market acceptance of our products, and it also reinforces our capability to deliver customized high-value and solution-oriented offerings, positioning this segment as one of the key drivers of the company going forward.”

Asad Daud

opening

“Currently, we have scaled our skid assemblies capacity from 2,000 units per annum to 6,000 units per annum, and we are on track to further expand the same by the next two quarter to 15,000 skids per annum.”

Asad Daud

opening

“Now talking about our financial performance for Q4 FY26, our total income stood at INR126.5 crores, which is a growth of 38% on a year-on-year basis, which is driven by an improved product mix and a growing contribution from value-added solutions.”

Asad Daud

opening

“Now talking about our FY26 as a year, the total numbers.”

Asad Daud

opening

“Our skid assemblies segment, which is our newest segment has begun contributing to the top line and is right now accounting for only 5% in FY26, but we expect that this share to scale significantly in the upcoming years.”

Asad Daud

opening

“Now looking ahead to the current financial year, which is FY27, we remain focused on deepening our strategic shift towards higher value-added products and also expand our presence in emerging sectors such as data centres and AI infrastructure.”

Asad Daud

opening

“We continue to strengthen our capabilities and to enhance our execution at the ground level and aim to deliver robust growth over the next few years.”

Nikunj Bhanushali

“So what, how much was the business we did in the current year, in the previous year for metal bellows in FY26?”

Risks & concerns — 9 flagged

This is despite the fact that we had a very weak first quarter.

— Asad Daud

Hence, to give you an exact number in terms of how much is our product as compared to the entire cost of the data center would be difficult to answer for us because we are not supplying directly to the data center.

— Asad Daud

And we have already started the exhibition, but very difficult to comment on that right now about the status here.

— Asad Daud

Well, it's like -- it's difficult to give a number for that in the sense, so I can probably say that in terms of the business, I can say that at 75% capacity utilization, right?

— Asad Daud

In terms of megawatt, it's slightly difficult.

— Asad Daud

So commenting on specific how many megawatts that would convert into would be difficult for me to give an answer.

— Asad Daud

But it will be difficult to give any specific number or any specific guideline on that.

— Asad Daud

So yes, I think this year has -- at least the start of the year was a bit of a challenge for the metal bellows division, specifically owing to the fact that we were expecting this business to -- big business to come in from the US and the tariff did not -- the tariff actually paid us as points for specifically for the metal bellows business because that was a new vertical for the company.

— Asad Daud

So what is the impact of that on our business?

— Muskan

Q&A — 15 exchanges

Yes, thank you for the opportunity am I audible?

Asad Daud

Yes. So I had a few questions. So what is the order book for the liquid cooling skids that we have currently? So in the liquid cooling skids, we work on a long-term contract with our, with the suppliers with whom we have an exclusive contract. And they have given a pipeline for the entire year and then they break it down into quarterly POs. So since right now, we are dealing with one specific or only one particular supplier due to disclosure agreements, we'll not be able to share the order book with them that we have. But yes, we have a vision for the entire year that they have shared with us.

Yes, sir, my question is just a follow-up on the previous participants with respect to Hyd-Air. So what's our current utilization? And are we planning with respect of Hyd-Air and are we planning to do any capex in the Hyd-Air business?

Asad Daud

So in terms of utilization, I think Hyd-Air is currently at about 60% utilization. Our aim in the next, in this financial year is to utilize the capacity of Hyd-Air for internal consumption for Aeroflex Industries because we have certain projects coming up in the next few months, where we have requirements of specific fittings, which we are going to manufacture in-house at Hyd- Air. And these are products for high-end applications. Hence, we want to utilize the capabilities of Hyd-Air for our internal consumption. Okay, sir. And sir, on the liquid cooling part, you mentioned that the liquid, y

Yes. So, my question is related to more understand the product portfolio. So I will have some basic questions to understand. What is the share of our product share of -- in the overall TAM of the data center in the liquid cooling systems? How much our products contribute in the costing side? Do we have any patent on that product or in terms of technology? And any competitive advantage over export market? What's the cost benefit we have. These sort of questions.

Asad Daud

Okay. So first of all, I'll go with the last question first. Right now for the export market for the liquid cooling, we're not supplying our skid assemblies in the export market right now. We are only supplying our whole assemblies, which goes into data centers in the international market. So skid assemblies right now is 100% in the domestic market only. In terms of the patent, so we are working with, like I mentioned, this company. So we are actually jointly developing the product along with them. But obviously, since they are the principal, we are designing the product along with them. So we

Thank you so much for the opportunity and congratulations on a good set of numbers, sir. Sir, first question is regarding -- if I go through the con call of last quarter, probably you said INR42 crores of skids were for immediate execution. So is it like something -- there was some part of execution, which was supposed to be done in this quarter, but was not done? And if not, then what was the reason? Is there some supply bottleneck?

Asad Daud

So the -- right now, the main bottleneck is from the design aspect, where the design which was initially to be provided by the principal is actually now being done by our entire team. So designing of the skid assemblies is the critical aspect here, where until and unless the skid assemblies is designed and finalized, the production cannot start for the same. Plus also what we have seen over the past few -- a couple of months is that there is a significant supplier quality control and -- sorry, like customer quality control and customer audits, the end customer I'm talking about, not the one th

No, problem. Thank you. Thank you so much.

Asad Daud

Thank you.

Yes, hi. Thanks for the opportunity. First question at 15,000 skids full utilization, can you give us a sense on how many megawatts of liquid cool data centers that can support?

Asad Daud

Well, it's like -- it's difficult to give a number for that in the sense, so I can probably say that in terms of the business, I can say that at 75% capacity utilization, right? And like which as I said, could be the peak, we can expect a total revenue for the business to come in at about INR325 crores to about INR330-odd crores. Now in terms of.... Sorry, go ahead. Yes. So INR325 crores to about INR330 crores. In terms of megawatt, it's slightly difficult. The reason being if you see that some skid assemblies that we manufacture sell at a higher price, some skid assemblies that we manufacture

My first question is a follow-up on the previous question. So this 60% -- around 60% utilization that we are targeting by next year March, is that incremental orders coming fully from this principal company or are we also looking at export orders for the skids?

Asad Daud

Right now, what we have is for the orders, which will come in from the principal only because we have not taken into consideration the orders, which will come in for any other customers because the other customers, the talks have just begun. So it's too early to say that. Okay. And sir, I saw that in this quarter's PPT, we had increased miniature bellows capacity to 60,000 pieces. So will this be sufficient for our 15,000 skids -- or will we be needing more capex in this regard? Sorry? For the miniature bellows segment. The miniature bellows segment, will we be needing any incremental capex? S

My first question is on the data center business, new products ex of skids. So could you talk about when can we expect these products to be launched in the market and start contributing as well as I believe we are also adding a lot more products. So, what is your strategy in terms of building a team, what it is today? What do you see this team size in next 2, 3 years?

Asad Daud

So, in terms of the team, right, I think the entire team, whether we talk about sales and marketing, operations, technology, I think everywhere you'll see significant push on increasing the team, which is also pretty evident by the increase in the employee cost, if you see from our financial numbers. So, the thrust is to build the team and to scale it up. With regards to the -- sorry, I forgot your first question. What was the first question? Yes. It was when do you expect new products apart from skids? We are adding a lot more new products in data center business. So. In the data center busin

Sir, we are manufacturing skid assembly and also metal bellows and also hose pipe. So, can you just give some rough idea how much is we are competitive compared to the -- if it is manufactured outside India or it's in U.S. or something like that?

Asad Daud

Well, in terms of skid assemblies right now, we are manufacturing and supplying only in India. So, our competitiveness internationally, I'm not able to comment because we have not started to supply internationally. But obviously, in India right now, we are among the only players, who are manufacturing and supplying skid assemblies. So, I think right now, it's more about supply than about pricing. With regards to the bellows and the hose assemblies, so yes, we are the largest manufacturer in India for hose assemblies, right? So, from the economies of scale perspective, we are extremely competit

Hi, sir. Thanks for taking my question First of all, congratulations for the great set of numbers. Sir, specifically for the other business, excluding the skid assemblies, what type of growth are we seeing in this year? And if you can specify about the EBITDA margins, consolidated EBITDA margin for FY '27, that would be very helpful

Asad Daud

Yes. So, in terms of the business, right, the overall growth in the business, I think if you see in this quarter, we have grown by almost more than 35%, right? Our aim is to have a similar growth in the next few quarters as well. In terms of our EBITDA margins, last year, we had an EBITDA margin of 22.5%. I think this year, the full year target is to have an EBITDA margin of around 23% in terms of EBITDA. So -- and our aim is that ultimately, over the next couple of years, the EBITDA margin should reach to about 25% annually. Okay, sir. And specifically for skid assembly, what type of EBITDA m

So congratulations on the good set of numbers. A few questions from my side. Firstly, on the cooling skid. So you mentioned that we'll reach close to 60% utilization on the 15,000 capacity by March. So that's close to a 700 unit number just for the month of March. So how do you see the volumes of skid assembly kind of panning out for FY'27 and maybe FY'28 as well, if you could guide?

Asad Daud

If I want to give a volume specific number, like I mentioned, right, skid assemblies, right now, we are at about -- so last financial year, we sold about 617, right? Obviously, the plan for this year is to obviously just scale it up to 6,000 and then for further scaling up to 15,000 by the next quarter. The idea is, like I said, to reach by March '27, to reach about 60% utilization for that particular month. That's the aim that we have right now. Obviously, I think one year is a big time, where a lot of things can change for the good. So last year, same time, we did not even have skid assembli

So recently in US, we have announced the Section 232 tariff. So what is the impact of that on our business?

Asad Daud

So the 232 tariff was prevalent before as well. But right now on our products, the tariff has been reduced. So with effect from February, I think about 15 of -- 15, the middle of February approximately. So right now, the tariff on our products has been lowered. We don't have any issues with tariffs as I speak. Yes. But what is the percentage of tariff currently on our products? I think it's around 15%, but I will have to just double check. I think in the range of between 10% to 15%. Okay. Thank you.

Congratulations on the numbers. Most of the questions are answered. I just wanted to understand, can you just reiterate the company guidance for the year, both ex-bellows, ex-skids and on the base business?

Asad Daud

Well, like I mentioned that with regards to the capacities that are coming up right now, I think we expect in the last quarter, we grew at about more than 35%, and I think on a yearly basis, we expect to achieve that kind of a growth, primarily being that we have significant capacities, which will be commissioned at the start of the year and which will help us to scale up the business. Obviously, skid assemblies would play a significant role in that growth naturally because we have -- we are expanding significantly on that. So -- but yes, you can say about 35-odd percent growth is something th

I just had one question. Sir, I just wanted to understand some mature bellow players seems to operate a materially high EBITDA margins than 28%, 30% that we are targeting. I just wanted to understand, is the gap mainly due to product mix, customer qualification maturity, utilization? I don't, like, I just wanted to understand over the medium term, if Aeroflex moves into more mission-critical export OEM bellows and assemblies, can the margin profile move above the current 28%, 30% that you have guided?

Asad Daud

So the margin in metal bellows is, like you mentioned, is significantly higher as compared to the hose assemblies. In terms of competitors, who have a higher scale of business in bellows, I think the margins with them obviously depends, first of all, on the customer segment that they have. Second of all, in which industry that they are supplying it. And obviously, like in any business, the higher the scale of the business, the higher the margins, right? That's naturally which comes with most businesses. So these 3 things are critical factors. Obviously, as we move our products into higher end,

Thank you so much. Thank you to everyone who's joined the call. And if I have not been able to answer anyone's questions or if you have any further questions that you would like to ask, you can get in touch with SGA, who is our Investor Relations partner. And also you can get in touch with the management to get your queries answered. Thank you so much. I would just like to also thank the entire team at Aeroflex Industries who have done a great job to achieve the targets that we had set out at the start of the year despite the initial hiccups that we had and despite all the geopolitical issues

Management

Speaking time

Asad Daud

Moderator

Maitri Shah

Tej Patel

Saumil Jain

Shwetha

Nikunj Bhanushali

Karan Gupta

Raman K.V.

Ashok Shah

Opening remarks

Asad Daud

Thank you so much. Good morning to everyone. I welcome you all to Aeroflex Industries Limited Fourth Quarter and FY26 Earnings Call. Joining us today are members of our senior management team, along with the representatives from Strategic Growth Advisors, SGA, who are our Investor Relations Partner. I hope you have had the opportunity to review our financial results and the investor presentation, which is available on the stock exchange website and also on the company's website. I'm happy to report that FY26 has been a great year for the company, where our execution excellence, our strategic expansion and the market opportunity have all come together to deliver the highest ever quarterly and yearly performance up to date. I'm also happy to share that the Board has also recommended a final dividend of 20%, which translates to about INR0.40 per equity share of face value INR2 each. This reflects our continued commitment to delivering value to our shareholders. The company operates in a v

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