Aeroflex Enterprises Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Aeroflex Enterprises Ltd trades at ₹126, in a confirmed uptrend and 19 weeks into that stage. That is +14.1% against its own 200-day average. It sits at 74% of a 52-week range of ₹67 to ₹146. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (2 weeks and counting).

Today the stock is in a confirmed uptrend — week 19 of stage 2, confirmed. At ₹126 it trades +14.1% versus its 200-day average and sits at 74% of its 52-week range (₹67–₹146).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +1,266% while the NIFTY 500 moved +262% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (2 weeks and counting; last ahead the week of 2026-09-11) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Aeroflex Enterprises Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: Not stated in the research file. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. Aeroflex Enterprises is a holding company for one of India's only manufacturers of liquid cooling skid assemblies for AI data centres — a genuinely new and large end market — but eight documented management consistency failures mean the operational story must be watched on quarterly delivery, not trusted on guidance alone.

What is proven. Aeroflex Enterprises is a holding company for one of India's only manufacturers of liquid cooling skid assemblies for AI data centres — a genuinely new and large end market — but eight documented management consistency failures mean the operational story must be watched on quarterly delivery, not trusted on guidance alone.

What is not proven yet. Monthly skid throughput falling below 750 units in any quarter before the close of fiscal 2027, or management making a ninth undisclosed strategic reversal on any committed timeline or margin characterisation, would break the thesis and trigger a drop review.

🚨 What would change our mind. Monthly skid throughput falling below 750 units in any quarter before the close of fiscal 2027, or management making a ninth undisclosed strategic reversal on any committed timeline or margin characterisation, would break the thesis and trigger a drop review.

Layer 1 read, 22 August 2026 — KEEP. A real AI data-centre cooling business is scaling, but the cheap 10.4x multiple is a one-off — truly about 17.6x. The operating subsidiary grew revenue 72.4% to Rs 146 crore last quarter at a 23% margin, with profit up 162% to Rs 18.8 crore, and its liquid-cooling skid line went from nothing to 1,040 units and Rs 32.4 crore in three quarters — about 23% of subsidiary sales. The listed holding company, however, reported Rs 103 crore of profit on just Rs 17 crore of operating profit, because Rs 143 crore of income came from outside the business; that is what makes the shares look like they trade at ten times earnings. Set against real earnings of roughly Rs 90 crore, the multiple is closer to seventeen times, and the company has also reversed eight separate stated commitments across four calls, including…

What would change Layer 1’s mind. Two things, either of which flips this. Downward: another quarter above Rs 100 crore of other income with no explanation in the call would tell me the holding-company structure is a permanent reporting distortion rather than an event — the timeline's own falsification line — and I would treat the reported earnings as uninformative. Upward: monthly skid throughput holding at or above 750 units in the September quarter with subsidiary EBITDA margin at or above 22%, which would be the second…

Layer 2 read, 22 August 2026 — BENCH. The liquid-cooling business is real, but independent proof and sustained cash conversion are still missing. Liquid-cooling skids reached meaningful sales scale, but management changed the hose-capacity baseline without reconciliation and three-year operating cash flow was Rs -191 crore against Rs 440 crore PAT. The 3.93 price run against a DECLINING assigned-sector lifecycle triggers the full cross-cycle stress test, while sector claim Q1 says the residual basket cannot be used as a direct stock veto. With no independent social, chain or second-order confirmation, P2 stays on BENCH.

What would change Layer 2’s mind. BENCH would become ADVANCE if an independent source confirms a second liquid-cooling customer with a firm order and the next results show operating cash flow recovering without another capacity-baseline change.

The test written in advance. Monthly skid throughput falling below 750 units in any quarter before the close of fiscal 2027, or management making a ninth undisclosed strategic reversal on any committed timeline or margin characterisation, would break the thesis and trigger a drop review. — the thesis as written as stated by the next result.

The test written in advance. Eight Documented Management Consistency Failures — Eight Documented Management Consistency Failures Any further unreconciled discrepancy between stated and prior committed timelines or financial characterisations. by the next result.

The test written in advance. Non-Operating Other Income Inflating Reported PAT — Non-Operating Other Income Inflating Reported PAT Other income exceeding Rs 20 crore in any quarter without concall explanation. by the next result.

What the company does. The core Aeroflex Industries subsidiary is scaling into AI-infrastructure liquid cooling skids at record pace, delivering its best-ever quarter in the period ending June 2026. However, Aeroflex Enterprises (the listed entity) shows large non-operating other income that inflates reported PAT, and management has a documented habit of quietly abandoning or revising commitments without explanation. The thesis remains on watch: the liquid cooling opportunity is real and fast-growing, but a second quarter of solid delivery is needed before conviction justifies deployment.

🚨 What the surface reading misses. The surface reading is: PE at 56th percentile — neither cheap nor expensive; moderate cycle position The research reads it further: The PE's 10-year low was 4.1 in early 2024 and the median is 20.65. Current PE of 21.7 is just above median — this is the beginning of a genuine EPS-driven re-rating, not an extended multiple. The PE is expanding because EPS is growing (from Rs 0.78 in FY21 to Rs 5.68 in FY26) while the market has not yet priced in the liquid cooling skid optionality.

🚨 What the surface reading misses. The surface reading is: PAT Rs 103 Cr on revenue Rs 189 Cr implies a 55% PAT margin — which looks like an exceptional profit quarter The research reads it further: Operating profit at the holding company level was only Rs 17 Cr (OPM 9%). The Rs 143 Cr other income is non-operating — likely investment income, a dividend from the subsidiary, or a one-off corporate event. The true operating performance is better represented by the concall's subsidiary figures: EBITDA Rs 33.5 Cr on Rs 146 Cr revenue (23% margin). The holding company structure creates a layered P&L that looks distorted at face value.

Lever 10 · New geographies — BUILDING. Core hose and assembly exports have recovered strongly despite US tariff pressure, with revenue growing 41% year on year in Q1 FY27 and assemblies now accounting for 63% of the hose business versus 37% for commodity hose-only sales. What proves it keeps working: Core Flexible Hose Export Recovery. It stops working if US tariff relief is reversed or new tariffs are imposed, causing customers to redirect orders to local suppliers, or the hose expansion is further delayed beyond Q3 FY27.

Lever 1 · Operating leverage — BUILDING. Fixed-cost absorption improves as revenue grows, with EBITDA margin at the subsidiary level now at 23% and management targeting 25% as the mix shifts toward higher-value skids and assemblies. What proves it keeps working: Operating Leverage on Growing Revenue Base. It stops working if Employee costs or logistics costs continue rising faster than revenue growth, compressing margins below 21% for two or more consecutive quarters.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Aeroflex Enterprises Ltd reported ₹189 Cr of revenue in the Jun 26 quarter, +41.0% year on year. That is the 8th straight quarter of year-on-year growth. Over 10 years it has compounded at 22.4% a year. The last full year, FY26, came in at ₹697 Cr. The last four reported quarters add to ₹752 Cr.

Why this happened. The hose business benefits from a 25–30% cost advantage over international competitors on an export basis. The EU free trade agreement removes a competitive disadvantage against Turkish suppliers. Assemblies carry margins of 22–26% versus 16–20% for commodity hose, so the mix shift improves blended margins as value-added share grows. Capacity is being extended from 7.5 million to 20 million metres per annum, with completion expected by the third quarter of fiscal 2027.

FY26 revenue came in at ₹697 Cr (+20.6% on the year), capping 10 years at 22.4% compound. The latest quarter (Jun 26) printed ₹189 Cr, +41.0% year on year — the 8th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +27.9% growth against the decade's 22.4% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +27.5% over the last 4 quarters against +23.5%/yr over the last 8 — accelerating; TTM profit +126.0% vs −11.5%/yr — accelerating.

FY26-Q4. revenue ₹200 Cr and profit ₹26 Cr as reported.

FY27-Q1. revenue ₹189 Cr and profit ₹103 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Aeroflex Enterprises Ltd's operating margin is 9.0% in the Jun 26 quarter, −5.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged −207.0% to 18.0%. The current quarter sits inside that band.

Why this happened. The path from 23% to 25% EBITDA margin is driven by two forces: the mix shift toward skids and assemblies (higher margins than commodity hose) and volume leverage over the fixed cost base of manufacturing and engineering staff. The guidance has been maintained consistently since January 2026, making it one of the more credible targets in management's communication.

The latest quarter's operating margin is 9.0%, −5.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged −207.0%–18.0%, and FY26's 18.0% is the top of that band — a record year.

🚨 Why the margin moved: operating margin went −4.4 pp year on year while gross margin went +4.1 pp — the loss came mostly from the gross line: input costs and pricing.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

FY26-Q4. revenue ₹200 Cr and profit ₹26 Cr as reported.

FY27-Q1. revenue ₹189 Cr and profit ₹103 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Aeroflex Enterprises Ltd earned ₹103 Cr of net profit in the Jun 26 quarter, +635.7% year on year. It is the 3rd consecutive quarter of growth. Full-year FY26 profit was ₹85.0 Cr. That is 54.5% of the quarter's revenue. The same quarter a year earlier earned ₹14.0 Cr.

Jun 26 profit was ₹103 Cr, +635.7% year on year — the 3rd consecutive quarter of growth. On the full year, FY26 printed ₹85.0 Cr (+4.9%).

Why profit moved: revenue contributed +41.0% and the margin −5.0 pp — the quarter was revenue-led despite a thinner margin.

Pace comparison, last four quarters: profit +169.3% vs revenue +27.9%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹200 Cr and profit ₹26 Cr as reported.

FY27-Q1. revenue ₹189 Cr and profit ₹103 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years −43% of Aeroflex Enterprises Ltd's reported profit arrived as operating cash — a gap worth watching. In FY26 that was ₹18.0 Cr of operating cash against ₹85.0 Cr of profit. After ₹120 Cr of capital spending, ₹−102 Cr was left as free cash.

FY26: operating cash of ₹18.0 Cr against reported profit of ₹85.0 Cr, leaving free cash of ₹−102 Cr after ₹120 Cr of capital spending. Across the last 3 fiscal years the conversion rate is −43% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

🚨 Why conversion sits at −43%: the cash cycle stretched 84 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving. Less than 70% of profit arriving as cash is the thing to watch on this page.

Router verdict: conversion is below par and the cash cycle has stretched 84 days — the next section's job is to find where the cash is stuck.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Aeroflex Enterprises Ltd's cash conversion cycle runs 166 days in FY26, up from 82 days in FY21. Capital spending ran ₹311 Cr over the last 3 years. At FY26 sales of ₹697 Cr each day of that cycle holds about ₹1.9 Cr, so roughly ₹317 Cr sits inside the business at any moment.

Why this happened. Data centres increasingly use liquid cooling to manage AI chip heat loads, and Aeroflex is among the very few Indian manufacturers capable of supplying complete skid assemblies at scale. At 75% utilisation of the 15,000-unit capacity, revenue potential is Rs 325–350 crore from this vertical alone. The Q1 FY27 delivery of 1,040 units against 9,000-unit annual capacity (roughly 46% utilisation in the quarter) is on track. The October–November 2026 capacity milestone is the next hard observable.

FY26: debtors at 112 days, inventory at 149 days — roughly 4.9 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 166 days, looser than FY21's 82.

The full loop: cash goes out to suppliers and production on day 0; stock waits 149 days to sell; customers pay about 112 days after that; and suppliers themselves are paid at 95 days — netting out to the 166-day cycle.

In money terms: at FY26 sales of ₹697 Cr, each day of the cycle holds about ₹1.9 Cr — so the 166-day loop keeps roughly ₹317 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹311 Cr over the last 3 fiscal years against ₹57.0 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹23.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the working-capital loop is the cash sink the router flagged — watch the cycle, not the P&L.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.⚠ unverified

Aeroflex Enterprises Ltd earns a ROCE of 13% in FY26. That is up from a trough of −86% in FY15. Return on invested capital clears the cost of that capital by −0.8 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 12.2% net margin on 0.60× asset turns.

FY26 ROCE is 13%, recovered from a FY15 trough of −86% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 12.2% net margin × 0.60× asset turns × 1.40× balance-sheet leverage ≈ 10.2% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 11.2% − 12.0% = a −0.8 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.⚠ unverified

Aeroflex Enterprises Ltd carries total debt of ₹41.0 Cr against shareholder equity of ₹962 Cr as of Mar 26, a debt-to-equity of 0.04 — effectively unlevered. On the annual view that ratio went from 0.43 in FY22 to 0.04 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹41.0 Cr against shareholder equity of ₹962 Cr — a debt-to-equity of 0.04. On the annual view, debt-to-equity went from 0.43 (FY22) to 0.04 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

No holder of Aeroflex Enterprises Ltd moved a full percentage point over the last two years — the register is quiet. Foreign institutions moved +0.1 points over the same window, to 1.3%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: +0.7 points over 8 quarters to 52.3%; Foreign institutions: +0.1 points over 8 quarters to 1.3%; Domestic institutions: −0.1 points over 8 quarters to 0.1%.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Aeroflex Enterprises Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Aeroflex Enterprises Ltd trades at 9.1× P/E, near the bottom of its own range — cheaper only 10% of the time. Its long-run median P/E is 20.3×, measured across 9.3 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 9.1× is near the bottom of its own range — cheaper only 10% of the time, against a long-run median of 20.3× measured over 9.3 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

One caveat before moving on: margins are the best this company has ever printed — cheap against its own history on record margins is not the same thing as cheap. If profitability mean-reverts, today's multiple is higher than it looks.

🚨 Why the multiple sits where it does: over the past year annual EPS moved +20.9% against a +48.9% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 5y, of the +30.3%/yr price move, ~+54.5%/yr came from earnings growth and ~−24.2 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is low against its own past, so the story rests on the earnings line underneath it, not the multiple.

A quarterly PEG curve, which only the second data source carries, is not drawn on this page: its two data sources do not share enough overlapping reported history to be compared. A figure nobody could check is not used to price growth — the gap is a decision, not missing data.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 25 August 2026 price, Aeroflex Enterprises Ltd was paying for profit growth of about 10.8% a year. Today the market pays 9.1× P/E, the 10th percentile of its own 9-year range.

What the two numbers say together. The multiple is low against its own past, and the growth the price is paying for is the whole of what a buyer is backing.

How to hold this number: it is a reading of one day's price, taken on 25 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 28 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Improving Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Aeroflex Enterprises Ltd reads as improving on its fundamental arc. Improving — EPS growth bottomed 7 quarters ago at −82.3% and has held its recovery at +200.7%, ROCE slipping at 13.0%. The read is built from 8 quarters across 4 curves, on partial evidence.

Why it matters: a sustained climb off the trough is the setup this page is built to catch — the question moves to what you pay for it.

The latest quarter’s profit carries a one-off item larger than the operating base, so the profit curve is shown but does not vote in the stage call.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

58.8/100 — rank 6 of 37 in Miscellaneous · 87% evidence confidence

Aeroflex Enterprises Ltd scores 58.8 out of 100 against the 37 companies it is compared with in Miscellaneous, ranking 6. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 19.3 + 14.6 + 11.8 + 13.1 = 58.8. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Aeroflex Enterprises Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Flexible Hose Capacity Baseline and Completion Timeline · 28 July 2026. In January 2026, management said installed capacity was 17.5 million meters per annum, with the remaining 2.5 million meters expected to be commissioned by Q2 of the next financial year. In July 2026, management instead described the current production base as 7.5 million meters and said the path to 20 million meters would be completed by Q3 of this financial year. Management did not reconcile the different 7.5 million versus 17.5 million baselines or explain the revised timing.

🚨 Skid Capacity Expansion Delayed · 28 July 2026. Management's January 2026 commitment was to complete the 15,000-unit skid capacity expansion by June 2026. By July 2026, management said the 15,000-unit milestone would instead be reached in October-November, a material four-to-five-month delay; while supplier delays were cited, the call did not provide a quantified recovery plan or explain why the prior schedule was missed.

Hydair Capacity Expansion Plans Silently Abandoned · 6 May 2026. In both prior calls, management explicitly committed to an imminent Hydair capacity expansion announcement, stating in Oct 2025 it would come very soon and in Jan 2026 that details would be shared in due course of time. In the May 2026 call, when the same analyst directly asked whether any capex was planned for Hydair, management gave no mention of expansion and instead repositioned Hydair entirely as an internal manufacturing unit, while Hydair utilization simultaneously declined from approximately 70% in Jan 2026 to 60% in May 2026, contradicting the external scaling narrative maintained across both prior calls.

🚨 Skid Assembly Execution Bottleneck Not Previously Disclosed · 6 May 2026. In the Jan 2026 call, management presented an INR45 crore near-term skid assembly pipeline as already committed and scheduled for dispatch by the principal partner, with no mention of any design dependency or operational risk that could impede execution. The May 2026 call revealed a previously undisclosed structural bottleneck - that design responsibility originally held by the principal had shifted to Aeroflex's internal team - causing material execution delays. Actual skid sales over the four months of operation totaled only approximately INR21.2 crores, well below the INR45 crore pipeline presented in Jan 2026 as ready for scheduled execution.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions