Aeroflex Industries Limited

Industrials — Metal Fabrication · NSE

₹526.00+₹15.05 (+2.95%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Aeroflex Industries Limited manufactures and sells stainless steel flexible hose, assemblies, and fittings in India.

IndustryMetal Fabrication

SectorIndustrials

Employees607

Annual revenue₹423 Cr

How does it make money?

Turns over ₹423 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 607 employees supports ₹69.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹69.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. 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?Some evidence

ROCE of 16.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE18.7%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 32.8% and earnings to grow about 45.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+32.8%

Est. earnings growth+45.6%

Analysts1

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 +61% while net margin moved +14% 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+61%

Margin effect+14%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 101.9x is demanding — it needs sustained high growth to justify
✗ P/E is 59% above its own historical median of 64.2x — expensive by its own standards
✗ P/B of 15.56x is a steep premium to book

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

23/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

101.9x

3Y Median

64.2x

40 monthly readings · mean 69.0x · range 42.0x–125.4x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 59% above its 3y median of 64.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 738% above the peer median of 12.2x.

vs. its own history

Expensive

64.2x median over 40 months · +59%

vs. sector peers

Expensive

12.2x median of 4 peers · +738%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

68.1x

PEG

4.52

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 18.9% to 24.1% over 3 years.
Debt is being paid down
Total debt is down 80% 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 26.4% to 12.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 32.7% to 16.5% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 1.99x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹5 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 94% against revenue up 61% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 18.9% to 24.1%. 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 80% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 1.99x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 94% against revenue up 61%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 59% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 26.4% to 12.4%. 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.
Size brings its own risk
Small 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 13% a year✓ 17.2% CAGR
Latest reported year was 72.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 24.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 16.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹6,961 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

101.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

15.56x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹5.16

Profitable

Profitable on a per-share basis

ROE

12.4%

Moderate

Moderate capital efficiency

ROCE

16.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.99x

High

High leverage

Revenue Growth (YoY)

72.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

158.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.08%

Modest

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

Free Cash Flow

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

53.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

17.6%

Good

Healthy core-business profitability

Net Margin

13.4%

Good

Strong bottom-line conversion

Current Ratio

2.91

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.84

Market-like

Moves roughly in line with the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

533.9 / 514.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

50.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹263 Cr	₹312 Cr	₹367 Cr	₹423 Cr	+17.2%
EBITDA	₹50 Cr	₹66 Cr	₹82 Cr	₹102 Cr	+27.0%
EBITDA Margin	18.9%	21.0%	22.4%	24.1%	—
PAT (Net Profit)	₹30 Cr	₹42 Cr	₹53 Cr	₹56 Cr	+22.6%
EPS	₹2.33	₹3.23	₹4.06	₹4.28	+22.4%
ROE	26.4%	14.2%	15.3%	12.4%	—
ROCE	32.7%	20.2%	20.4%	16.5%	—
Total Debt	₹45 Cr	₹0 Cr	₹1 Cr	₹9 Cr	-41.8%
Free Cash Flow	-₹2 Cr	₹6 Cr	-₹77 Cr	-₹5 Cr	—

🟢 Revenue has grown at 17.2% a year over 3 years.

🟢 EBITDA has grown at 27.0% a year over 3 years.

🟢 EBITDA Margin has risen from 18.9% to 24.1% over 3 years (+5.2 pts).

🟢 PAT (Net Profit) has grown at 22.6% a year over 3 years.

🟢 EPS has grown at 22.4% a year over 3 years.

🔴 ROE has fallen from 26.4% to 12.4% over 3 years (-14.0 pts).

🔴 ROCE has fallen from 32.7% to 16.5% over 3 years (-16.2 pts).

🟢 Total Debt has shrunk at 41.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹565 Cr

Total Liabilities

₹118 Cr

Cash & Equivalents

₹19 Cr

Operating Cash Flow

₹66 Cr

Capex

-₹71 Cr

Shareholding (proxy)

Institutional Holding

1.4%

Insider Holding

69.8%

Corporate Actions

Dividend Rate

₹0.4

Ex-Dividend Date

14 Jul 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹545

+3.6% vs CMP

Target Range

₹545 – ₹545

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

2 mixed4 general

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

Business Standard, 15 Oct

Aeroflex Industries Share Price Falls Sharply

Kalkine India, 15 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Aeroflex Industries Share Price news and valuation view

Univest, 14 Oct

Aeroflex Industries shares rally 10% to 52-week high as board approves capacity expansion plan; check details

Upstox, 14 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 Industries shares hit a record high, up over 100% in 6 months - Why is the stock rising? Should investors buy?

Livemint, 12 Oct

Market Trading Guide: Aeroflex Industries among 2 stock recommendations for Wednesday

The Economic Times, 18 Aug

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth

MiddlingFinancial Health · Profitability · Risk

WeakValuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

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