Aequs Limited is a diversified, engineering-led contract manufacturer specializing in high-precision components and assemblies. The company operates through a unique **"Cluster Model,"** co-locating vertically integrated manufacturing processes within single ecosystems to serve global Original Equipment Manufacturers (OEMs). Following its successful listing on the **BSE** and **NSE** in **December 2025**, Aequs has positioned itself as a critical link in the global supply chains for **Aerospace**, **Toys**, and **Consumer Electronics**. --- ### **The "Ecosystem of Efficiency": Manufacturing Infrastructure** Aequs operates a globally distributed manufacturing footprint covering **0.22 crore sq. ft.**, designed to eliminate logistical inefficiencies by housing the entire value chain in one location. * **Belagavi Aerospace Cluster (BAC):** India’s first notified precision engineering Special Economic Zone (SEZ). It supports a "Detailed Part to Assembly" (**D2P**) model, moving from raw material to finished sub-assemblies within a single campus. * **Koppal Toy Cluster (KTC):** A dedicated ecosystem for toy manufacturing, integrating design, molding, painting, and assembly. * **Hubballi Durable Goods Cluster (HDC):** Focused on the rapid scale-up of consumer electronics and durable goods. * **Global Footprint:** Complementary facilities in **France** and the **U.S.** provide proximity to key aerospace customers like Airbus and Boeing, facilitating engineering collaboration and "just-in-time" delivery. **Current Capacity & Utilization (as of Q3 FY26):** * **Machinery:** **424 CNC machines** and **161 molding machines**. * **Capacity:** **0.4 crore** annual machining and molding hours. * **Utilization:** Aerospace (India) is at **71%** (targeting a steady-state **75%**), while the newly commissioned Consumer segment is at **31%**, providing significant headroom for growth. --- ### **Core Business Segments & Market Position** | Segment | Revenue Share (9M FY26) | Key Capabilities | Major Customers | | :--- | :--- | :--- | :--- | | **Aerospace** | **86%** | Precision machining (3/4/5-Axis), forging, surface treatment, and assembly. | **Airbus, Boeing, Safran, Collins Aerospace, SAAB** | | **Consumer** | **14%** | Injection/blow molding, tool making, and electronic assembly. | **Mattel, Hasbro**, and a major global electronics brand. | #### **1. Aerospace & Defense: The High-Margin Anchor** Aequs has achieved **100% in-country value add** for select components, transitioning from a parts supplier to a provider of complex systems. * **Portfolio:** **5,221 qualified parts**, including engine systems, aerostructures, actuation, and landing gear. * **Order Book:** A massive **USD $814 million** (as of Dec 2025), providing revenue visibility through **2031**. * **Stickiness:** The company maintains an average **15-year relationship** with its top three customers, with over **90%** of parts supplied as a **single source**. #### **2. Consumer Verticals: Toys & Electronics** This segment leverages the company’s precision engineering DNA to serve high-volume global markets. * **Toys:** End-to-end manufacturing for global giants like **Mattel** and **Hasbro**. * **Consumer Electronics:** Focuses on **mechanical enclosures** and device housings. This vertical recently received **MeitY** approval under the **PLI (Production Linked Incentive) Scheme** for electronic components. --- ### **Strategic Growth & Value Migration** Aequs is aggressively moving up the value chain through several key initiatives: * **Defense & UAV Expansion:** The company has entered the **Unmanned Aerial Vehicle (UAV)** sector via a Joint Venture with **Accel India** and **Vagus Defense**, focusing on indigenous IP and system-level manufacturing for the Indian defense market. * **Inorganic Growth:** Management has allocated **Rs. 103.86 crore** (up to **35%** of IPO proceeds) for strategic acquisitions through March 2027. * **Corporate Simplification:** In April 2026, the board approved a **Scheme of Amalgamation** to merge three subsidiaries (**AeroStructures Manufacturing, Aequs Engineered Plastics, and Aequs Force Consumer Products**) into the parent entity to optimize operational costs. * **Geographic Diversification:** Signed an **MoU** with the **Government of Tamil Nadu** in February 2026 to establish a new manufacturing unit, further expanding its domestic footprint. --- ### **Financial Profile & Capital Structure** The **December 2025 IPO** (raising **₹670 crore**) and a **₹144 crore Pre-IPO** round have fundamentally transformed the company’s balance sheet. **Consolidated Financial Highlights (9M FY26):** * **Revenue:** **₹863.3 crore** (up **28%** YoY). * **EBITDA:** **₹122.2 crore** (up **85%** YoY). * **EBITDA Margin:** **14%** (a **400 bps** improvement). Aerospace margins remain industry-leading at **24%**. * **Deleveraging:** Net Debt to Equity has been reduced to a conservative **0.1x**. * **Asset Base:** Total assets grew to **₹3,050 crore** by Dec 2025, reflecting heavy investment in the Hubballi and Koppal clusters. **Investment Pipeline:** The company has proposed a **5-year investment** plan of **INR 2,856 crore** starting from FY 2026 to scale capacity in anticipation of new program sign-ups. --- ### **Operational Risks & Mitigation** * **Capital Intensity & Lead Times:** Aerospace machinery requires **12-18 month** lead times. Aequs manages this through proactive CapEx and long-term TCV contracts. * **Leadership Transition:** The **CFO, Mr. Dinesh Iyer**, is set to depart on **June 30, 2026**. The company is currently in the process of appointing a successor to ensure financial continuity. * **Related Party Transactions:** Significant operations occur within zones developed by **Aequs SEZ Private Limited**. The company has established an approved transaction limit of **INR 107.01 crore** for FY27 to ensure transparency. * **Taxation:** Aequs successfully contested a **₹77.96 crore** tax demand for FY 2017-18, which was **set aside** by the High Court of Karnataka in December 2025, significantly reducing contingent liability risks. * **Segment Concentration:** While the Consumer segment currently has lower ROCE due to front-ended investments, management expects margins to normalize at **18-20%** as utilization crosses the **50-60%** threshold.