Aeroflex Industries Reports Record Q2 Growth and INR 202 Crore Capex Plan

Revenue for Q2 FY27 reached INR 207.68 crore, while the company unveiled a massive INR 202 crore capital expenditure program.

Reader Takeaway: Strong revenue growth and clear expansion targets are offset by rising international shipping costs and execution risks.

What just happened

Aeroflex Industries delivered a record-breaking performance in Q2 FY27, with total income surging 87% year-on-year. The company also announced a strategic shift by merging its subsidiary, Hyd-Air Engineering, to streamline operations and reduce administrative overhead. Management updated its accounting practice, shifting to the Straight-Line Method (SLM) for depreciation, which improved reported profits by INR 8.41 crore during the period.

Why this matters

The company is scaling its infrastructure to meet high demand in the data center and liquid cooling sectors. The INR 202 crore expansion program aims to add 10 million meters of capacity to its flexible flow solutions business and double its skid assembly capacity by March 2028. This move is designed to support a long-term goal of achieving INR 1,500 crore in revenue by FY30 with healthy EBITDA margins above 25%.

Business Segment Performance

Liquid cooling remains a primary growth driver, contributing 24% to H1 FY27 revenue. Meanwhile, the core metal flexible hose business saw 40% growth, and value-added products grew by 44%. The company is actively building its position in emerging verticals like metal bellows, which generated INR 9 crore in revenue during the first half of the fiscal year.

Risks to watch

Management highlighted that rising international freight expenses are exerting pressure on operating margins. While the company is aggressive on expansion, the execution of the phased capex plan remains dependent on commissioning timelines and sustained market demand. Furthermore, investors should closely track the cash conversion cycle as receivables scale alongside revenues.

What to track next

The primary focus for shareholders will be the pace of the INR 202 crore capacity expansion and the success of the merger with Hyd-Air. Management's ability to maintain a 25% EBITDA margin while navigating volatile global shipping costs will be critical for sustained valuation growth.