Aequs shares crash up to 19% post-Q2 loss; JM Financial maintains 'Reduce' rating

The stock fell 18.93 per cent to an over four-month low of Rs 196.50 per share today after the company announced its September-quarter results post market hours on Monday. The stock today closed 9.90 percent lower to Rs 218.40, on the NSE. Aequs Ltd reported a consolidated loss of Rs 52.3 crore for the second quarter of FY27, compared with a loss of Rs 21 crore in the corresponding quarter of last fiscal.

The company’s revenue from operations grew 45 per cent year-on-year to Rs 409 crore in the July-September quarter of FY27, from Rs 282 crore posted in the year-ago period. The company's EBITDA fell 45 per cent YoY to Rs 24.5 crore from Rs 44.3 crore in the same quarter the last year. EBITDA margin also narrowed 100 bps YoY to 6 per cent from 16 per cent in the year-ago quarter. “Aerospace continued to deliver strong growth and profitability, supported by healthy demand and program execution.

In Consumer, the Q2 volume ramp progressed slower than anticipated due to extended qualification timelines and supply chain constraints. We view this as a timing-related shift rather than a change in the underlying opportunity, with customer programs continuing to progress. Given these factors, we are recalibrating the path to Consumer EBITDA breakeven, with our near-term focus on improving utilization and translating installed capacity into profitable growth,” said the company in a statement released on Monday.

The company's total expenditure increased 56 per cent YoY to Rs 395 crore, adding to the pressure on its bottom line. For the first half of FY27, Aequs' consolidated net loss widened to Rs 106 crore from around Rs 17 crore in the year-ago period. Revenue during April-September increased 50 per cent YoY to Rs 805 crore. JM Financial on Aequs share: Reduce, raises target price Brokerage firm JM Financial Institutional Securities maintained its 'Reduce' rating on Aequs despite raising its target price to Rs 245 from Rs 220, stating the company's longer-term growth prospects and planned investments.

The brokerage said Aequs' Q2FY27 EBITDA came in at Rs 13.9 crore, down 51 percent YoY and 6 percent sequentially, missing its estimate by around 50 per cent. A key surprise was the sequential decline in consumer sales, which fell 21 percent QoQ while capacity utilisation in the segment dropped 17 percent from 22 percent in Q1FY27. Consequently, EBITDA breakeven guidance for the consumer segment has been pushed beyond the originally target of Q4FY27, the brokerage stated.

JM Financial also noted that EBITDA margins in the aerospace segment moderated, even as sales were modestly ahead of estimates. “While the overall results were disappointing, longer-term prospects remain strong as Aequs moves ahead with establishing the aerospace hub at Hosur,” it added. The brokerage slightly lowered its FY27 and FY28 EBITDA estimates factor in weakness in the consumer business. However, it raised its target price after factoring in higher capital expenditure, sales and EBITDA for FY30 and FY31, while maintaining a cautious stance on the stock.