Aeroflex Q2 FY27 Earnings Call — Analysis (NSE: AEROFLEX)
Aeroflex posted record quarterly revenue crossing ₹200 Cr powered by liquid cooling skids traction (24% of H1 revenue) and announced a ₹202 Cr capex plan targeting ₹1,500 Cr revenue by FY30.
Result quality: strong — Margin expansion. Management sentiment: optimistic.
The take
Q2FY27 Total Income ₹207.68 Cr ( +87% YoY ) . Guidance cut — FY27 fy27 total company revenue ₹715 Cr to ₹725 Cr . New story: Scaling liquid cooling skid assemblies .
Results
Q2FY27 total income grew 87% YoY to ₹207.68 Cr with EBITDA up 94% YoY to ₹50.34 Cr (margin ~24.2%) and PAT up 157% YoY to ₹36.56 Cr.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Total Income | ₹207.68 Cr | +87% | yoy · Q2FY27 |
| EBITDA | ₹50.34 Cr | +94% | yoy · Q2FY27 |
| EBITDA Margin | 24.27% | yoy · Q2FY27 | |
| PAT | ₹36.56 Cr | +157% | yoy · Q2FY27 |
| PAT Margin | 17.6% | yoy · Q2FY27 | |
| Total Income | ₹353.66 Cr | +81% | yoy · H1FY27 |
| EBITDA | ₹83.83 Cr | +103% | yoy · H1FY27 |
| EBITDA Margin | 23.77% | +258bps | yoy · H1FY27 · vs 21.19% in H1FY26 |
| PAT | ₹55.35 Cr | yoy · H1FY27 | |
| PAT Margin | 15.65% | none · H1FY27 |
Guidance
FY27 revenue guided at ₹715–₹725 Cr (~60% YoY growth), with long-term revenue targeted at ~₹1,500 Cr by FY30 at 25%+ EBITDA margin.
What management committed to
- We expect [the company's FY27 revenue] to close somewhere about INR715 crores to INR725 crores at the least. — INR715 crores to INR725 crores, FY27
- The target for [skid assembly business in] this year is to achieve anywhere between INR150 crores to INR200 crores. — INR150 crores to INR200 crores, FY27
- At the peak capacity utilization, [the additional capacities from the INR202 crore capex] are expected to generate incremental revenue potential of approximately INR500 crores to INR550 crores per year. — INR500 crores to INR550 crores, FY30
- We expect [the company's] top line to be close to about INR1,500 crores for FY30. — INR1,500 crores, FY30
- The peak revenue that we see from [the hose assemblies segment] would go closer to about INR850 crores to INR900 crores on the peak utilization and assuming about 70% to 75% of the capacity is utilized for making the hose assemblies. — INR850 crores to INR900 crores, Post FY28 expansion
Key themes
Data center liquid cooling expansion
How the narrative shifted
- Scaling liquid cooling skid assemblies: The thread shifted from a future capability build to a proven growth driver, evidenced by the 24% revenue contribution and the rapid scale-up of capacity targets.
- Capacity expansion across both legacy and new verticals: Expansion plans were concretized with hard numbers, timelines and a peak revenue projection of INR500-550 crores incremental, moving from general capacity announcements to a detailed phased investment roadmap.
- Export growth and European market penetration: The narrative pivoted from a general story of robust export growth to a specific focus on the international skids opportunity with a single customer, while conceding that design differences and audit requirements mean timelines remain uncertain.
- Margin expansion towards 25% blended target: No reframing – the target remains intact and management expressed increased confidence in maintaining it even at the higher INR1,500 crores revenue scale for FY30.
- Supply chain and logistics cost headwinds: The headwind was acknowledged in the Q&A but was conspicuously absent from the opening remarks, suggesting it is becoming a normalized cost factor rather than a critical disruptive theme.
- New product development and R&D pipeline: The narrative moved from uncertain timelines to tangible IP creation (patent granted) and confirmed adjacent product development, strengthening the R&D credibility.
- AI-led demand accelerating liquid cooling infrastructure: This emerged as a distinct and explicit macro-economic justification in the opening remarks, crystallizing the demand thesis that was previously more implicit or embedded in other threads.
Operational commentary
- Announced ₹202 Cr capex: expanding SS flexible flow capacity from 20M to 30M meters/yr (₹124 Cr) and skid assemblies from 15k to 30k units/yr (₹78 Cr) by March 2028, adding ₹500–₹550 Cr peak revenue potential.
- Liquid cooling vertical contributed 24% of H1FY27 revenue, driven by high-performance data center demand.
- Merger announced for wholly-owned subsidiary Hyd-Air Engineering with Aeroflex to eliminate overlaps and act as backward integration for fittings.
- Granted patent for automated 3D CAD modeling generation for braided hose assemblies.
- Liquid cooling skid assembly capacity of 12,000 units/year commissioned out of the 15,000 units/year planned by December 2026.
Analyst Q&A
Q. Expected cost savings and margin expansion from Hyd-Air merger.
Exact quantified numbers will be shared post-merger completion, but expected to add at least a couple of percentage margin benefit through cost efficiencies and direct fitting supplies.
Q. Liquid cooling skid order book size and execution visibility.
Declined specific order book numbers due to customer confidentiality, but confirmed a frozen supply pipeline over the next 3 months with ballpark visibility beyond.
Q. Status of international OEM qualifications and discussions for liquid cooling skids.
In advanced discussions and sampling/pricing stages with their existing global partner for international supply, with preliminary talks initiated with other global players.
Q. Details on new adjacent products being developed beyond SFN skids.
Developing complementary products within liquid cooling space; specifics withheld until design, sampling, and commercial customer approvals are finalized.
Research and educational content only. Not investment advice.