Aequs Ltd. Posts Record Revenue, EBITDA Soars 353% But PAT Remains in Loss

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AuthorAarav Shah|Published at:
Aequs Ltd. Posts Record Revenue, EBITDA Soars 353% But PAT Remains in Loss
Overview

Aequs Limited reported a record Q3 FY26 revenue of ₹326.2 Cr, up 51% YoY, with EBITDA surging 353% to ₹38.1 Cr. Despite a net loss of ₹42.6 Cr (including one-offs), the aerospace segment showed robust growth. The consumer vertical, however, widened its loss. The company holds a significant aerospace order book and plans to balance its business segments for long-term profitability.

The Financial Deep Dive

The Numbers

Aequs Limited announced its Q3 FY26 results, marking a period of significant top-line growth and operational improvement, albeit with a continued net loss. The company achieved its highest-ever quarterly revenue from operations at INR 3,262 million (₹326.2 Cr), representing a substantial 51% year-on-year (YoY) growth. EBITDA for the quarter saw an exceptional surge of 353% YoY to INR 381 million (₹38.1 Cr), resulting in an EBITDA margin of 12%. However, the Profit After Tax (PAT) for the quarter was a loss of INR 426 million (₹42.6 Cr). This figure includes INR 167 million (₹16.7 Cr) of one-time expenses related to labor code adjustments and IPO costs, leading to an adjusted PAT loss of INR 259 million (₹25.9 Cr).

For the first nine months of FY26, revenue reached INR 8,633 million (₹863.3 Cr), up 28% YoY. EBITDA grew 85% YoY to INR 1,222 million (₹122.2 Cr), with the EBITDA margin improving to 14% from 10% in the previous year. The PAT loss for the nine-month period reduced by 47% YoY to INR 593 million (₹59.3 Cr).

Including proportionate share of joint ventures (JVs), total adjusted revenue for Q3 FY26 was INR 3,554 million (₹355.4 Cr), up 49% YoY, and adjusted EBITDA grew 228% to INR 449 million (₹44.9 Cr) with a 13% margin.

The Quality

  • Margin Trend: The operational performance is evident in the EBITDA margin expansion, which rose to 14% for 9M FY26 from 10% YoY. The Q3 EBITDA margin stood at 12%, reflecting the impact of one-off expenses and the scaling phase of the consumer business.
  • Profitability: Despite strong revenue and EBITDA growth, the company continues to report a net loss. The reduction in PAT loss by 47% YoY for the nine-month period is a positive sign of improving cost management relative to revenue.
  • Balance Sheet: Total assets grew significantly to INR 30.5 billion (₹3050 Cr) by December 2025, primarily funded by IPO proceeds and CapEx. The company has strengthened its financial footing, with net debt to equity reducing substantially to 0.1X as of 9M FY26.
  • Efficiency: Fixed asset turnover moderated to 0.84X from 1.3X, indicating investments in capacity. Net working capital days were stable at 120 days, suggesting efficient management of inventory and receivables.

Management Commentary

Management has indicated that the company does not provide specific revenue guidance for FY26 or FY27 at this time. However, they anticipate aerospace revenue to grow north of 20% YoY, while the consumer segment is expected to grow at a faster pace. The long-term strategy focuses on balancing the aerospace and consumer businesses and achieving consumer segment EBITDA margins comparable to aerospace margins (18-20%). Aerospace utilization in India is around 71%, targeting 75%, while consumer utilization is at 31% and expected to improve.

Risks & Outlook

Specific Risks

  • Consumer Segment Losses: The consumer vertical continues to incur widening EBITDA losses, attributed to its scaling-up phase and front-ended investments. Its negative ROCE requires substantial improvement in utilization and revenue to become profitable.
  • Vague Guidance: The absence of specific revenue guidance for the upcoming fiscal years introduces uncertainty for investors regarding the company's growth trajectory and future performance targets.
  • Utilization Improvement: Achieving higher utilization rates, particularly in the consumer segment, is critical for turning around segment profitability.

The Forward View

Investors will be closely watching the ramp-up of the consumer segment and its path to profitability. The company's ability to leverage its significant aerospace order book and explore opportunities in the defense sector will be key growth drivers. Balancing expansion in both segments while maintaining financial discipline, particularly reducing the PAT loss, will be crucial for Aequs's long-term value creation. The company has also received approval for PLI incentives for its consumer electronics business, which could support future growth.

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