Aequs Q3: Loss Widens, But Aerospace Business Lifts Revenue 51%

Newly listed contract manufacturer posts INR 43 Cr loss as consumer unit struggles, but aerospace orderbook and margin gains signal long-term runway.

Aequs, the diversified contract manufacturing company that went public in December 2025, reported a consolidated net loss of INR 42.7 Cr in Q3 FY26, up 7% YoY. Sequentially, the loss more than doubled from INR 20.6 Cr, driven by exceptional expenses and continued losses in its consumer business.

Yet, under the surface, the quarter showed signs of strengthening fundamentals—particularly in the aerospace division, which is increasingly becoming the company’s profit engine.

Revenue Takes Flight, Led by Aerospace

• Operating revenue surged 51% YoY and 16% QoQ to INR 326.2 Cr.
• Aerospace segment contributed 86% of the total, growing 39% YoY to INR 268.4 Cr.
• The consumer products unit, though smaller, saw a 157% YoY revenue jump to INR 57.7 Cr.

So where’s the disconnect?

While the aerospace vertical posted a segment profit of INR 39.1 Cr, the consumer business incurred a loss of INR 53.2 Cr, nearly doubling YoY. This drag pulled the consolidated bottom line into deeper red.

Margin Expansion, But Exceptional Costs Weigh In

• EBITDA soared 353% YoY to INR 38.1 Cr.
• EBITDA margin expanded a healthy 800 bps to 12%, aided by improved capacity utilization and product mix.

However, Aequs reported exceptional losses of INR 16.7 Cr, including:

• INR 9 Cr bonus paid to CEO Aravind Melligeri following Aequs’ successful IPO.
• INR 3.8 Cr in gratuity costs due to wage definition changes under new Labour Codes.
• A small loss from discontinued operations (INR 3.1 Lakh).

Excluding these, the operating metrics paint a more optimistic picture.

Aerospace: The Clear Growth Engine

The aerospace JV continues to power growth and profitability:

• Order book stood at $814 Mn
• Added manufacturing capabilities for 195 parts
• Supported by clients like Airbus, Boeing, Safran, and Collins Aerospace

“The aerospace JV continued to contribute to profitability and cash flows, while the cookware JV remained in its scale-up phase,” said CEO Melligeri, highlighting the segment’s maturity compared to consumer operations.

Consumer Business: Big Investment, Bigger Questions

Despite mounting losses, Aequs is doubling down on consumer electronics:

• INR 637.7 Cr invested in the segment until Dec 2025
• Focus areas: portable computers, wearables, smart devices
• Production has begun for an undisclosed global electronics major

Aequs also announced a JV with Brazil’s Tramontina to supply non-stick cookware, signaling diversification—but execution risk remains high.

Expense Trends and Market Reaction

• Total expenses (ex-finance & D&A) rose 42% YoY to INR 297.2 Cr
• Material costs remained the largest component, jumping 42% to INR 128.5 Cr

Despite the widened loss, investor sentiment held firm. Aequs shares closed 2.13% higher at INR 139.1, taking its market cap to INR 9,329 Cr (~$1.01 Bn).

Will investors continue to back Aequs’ dual-sector strategy, or will consumer losses weigh down its aerospace-led momentum?

TL;DR
Aequs Q3 FY26 loss widened to INR 42.7 Cr despite a 51% YoY revenue jump to INR 326.2 Cr. Aerospace revenue rose 39% and drove profitability, but consumer business losses doubled. Exceptional costs, including a CEO bonus post-IPO, also dented margins.

AI summary

• Q3 loss rose 7% YoY to INR 42.7 Cr; doubled QoQ
• Operating revenue grew 51% YoY to INR 326.2 Cr
• Aerospace contributed 86% of revenue, with $814 Mn orderbook
• Consumer segment loss doubled; INR 637 Cr invested in electronics
• Exceptional cost of INR 16.7 Cr includes CEO bonus, gratuity