Aeroflex Enterprises Limited

Basic Materials — Steel · NSE

₹128.50+₹2.51 (+1.99%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Aeroflex Enterprises Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Aeroflex Enterprises Limited, together with its subsidiaries, manufactures and sells stainless steel flow solutions in India and internationally. It operates through Flexible Packaging, Flexible Flow Solutions, Engineering Services, Financing, and Others segments.

IndustrySteel

SectorBasic Materials

Employees2,000

Annual revenue₹684 Cr

How does it make money?

Turns over ₹684 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 2,000 employees supports ₹34.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹34.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, JINDAL STEEL LIMITED, STEEL AUTHORITY OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.7% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE10.8%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +47% while net margin moved +2% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+47%

Margin effect+2%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Beta of 1.60 — amplifies market moves in both directions
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

60/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

81/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

9.7x

3Y Median

19.9x

40 monthly readings · mean 17.2x · range 3.3x–30.2x

Sector Median

18.2x

median of 4 sector peers

🟢Current valuation is approximately 51% below its 3y median of 19.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 47% below the peer median of 18.2x.

vs. its own history

Cheap

19.9x median over 40 months · -51%

vs. sector peers

Cheap

18.2x median of 4 peers · -47%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.5x

PEG

0.67

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 14.7% to 22.3% over 3 years.
Debt is being paid down
Total debt is down 61% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 16.4% to 7.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.1% to 11.7% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 4 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 4.22x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 100% against revenue up 47% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 87% against revenue up 47% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 14.7% to 22.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 61% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 51% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 47% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 4.22x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 100% against revenue up 47%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 16.4% to 7.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.7% CAGR
Latest reported year was 147.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 20%✓ 22.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹61 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 11.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹1,454 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.7x

Cheap

Cheap against the generic band

P/B Ratio

1.76x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹13.3

Profitable

Profitable on a per-share basis

ROE

7.8%

Weak

Weak capital efficiency

ROCE

11.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.22x

High

High leverage

Revenue Growth (YoY)

147.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

847.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.31%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹61 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

45.7%

Good

Healthy core-business profitability

Net Margin

16.4%

Good

Strong bottom-line conversion

Current Ratio

4.25

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.60

High swing

Swings more than the market in both directions

52W Range Position

68%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

127.0 / 131.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹465 Cr	₹501 Cr	₹574 Cr	₹684 Cr	+13.7%
EBITDA	₹68 Cr	₹97 Cr	₹129 Cr	₹152 Cr	+30.7%
EBITDA Margin	14.7%	19.3%	22.5%	22.3%	—
PAT (Net Profit)	₹43 Cr	₹258 Cr	₹53 Cr	₹64 Cr	+14.5%
EPS	₹3.98	₹24.25	₹4.7	₹5.68	+12.6%
ROE	16.4%	39.8%	7.6%	7.8%	—
ROCE	19.1%	46.1%	13.5%	11.7%	—
Total Debt	₹105 Cr	₹63 Cr	₹31 Cr	₹41 Cr	-27.1%
Free Cash Flow	-₹41 Cr	-₹291 Cr	-₹67 Cr	-₹61 Cr	—

🟢 Revenue has grown at 13.7% a year over 3 years.

🟢 EBITDA has grown at 30.7% a year over 3 years.

🟢 EBITDA Margin has risen from 14.7% to 22.3% over 3 years (+7.6 pts).

🟢 PAT (Net Profit) has grown at 14.5% a year over 3 years.

🟢 EPS has grown at 12.6% a year over 3 years.

🔴 ROE has fallen from 16.4% to 7.8% over 3 years (-8.6 pts).

🔴 ROCE has fallen from 19.1% to 11.7% over 3 years (-7.4 pts).

🟢 Total Debt has shrunk at 27.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,156 Cr

Total Liabilities

₹193 Cr

Cash & Equivalents

₹50 Cr

Operating Cash Flow

₹18 Cr

Capex

-₹79 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.8%

Corporate Actions

Dividend Rate

₹0.4

Ex-Dividend Date

01 Sept 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
JINDAL STEEL LIMITED	39.1x	5.3%
STEEL AUTHORITY OF INDIA	16.5x	7.1%

Recent News

2 mixed4 general

Aeroflex Industries tanks 11% on huge volume; down 17% in 2 days

Business Standard, 15 Oct

Aeroflex Enterprises AEROENTER NSE Price Movement Clarification

Kalkine India, 13 Oct

Aeroflex Enterprises approves ₹202 crore expansion for subsidiary Aeroflex Industries

scanx.trade, 16 OctCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Aeroflex Enterprises Share Price Target 2027 to 2030: Analyst Out

Univest, 17 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Aeroflex Enterprises Co-Promoter Acquires 1 Lakh Shares via Open Market Purchase

Sahi, 19 Jun

Aeroflex Industries shares hit a record high, up over 100% in 6 months - Why is the stock rising? Should investors buy?

Livemint, 12 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingFinancial Health · Profitability

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑