Aeroflex Industries has successfully implemented the first phase of its manufacturing capacity expansion for liquid cooling SFN skid assemblies, officially increasing production capacity from 2,000 to 6,000 pieces per year effective April 1, 2026. The company has commenced production at the enhanced capacity level and continues progressing toward its comprehensive expansion plan.

Capacity Expansion Implementation

The company has achieved a significant milestone in its strategic expansion plan with the successful implementation of Phase 1:

Recent Sales Performance

The company demonstrated strong market traction for its SFN skid assemblies during the fourth quarter of FY 2025-26:

Revenue Impact and Financial Projections

The capacity expansion is structured to deliver substantial financial returns across multiple phases, with management providing detailed revenue projections:

Strategic Market Positioning

The successful installation of SFN skid assemblies across multiple data centers validates the company's product quality and market positioning in liquid cooling solutions. The phased expansion approach allows Aeroflex Industries to systematically scale operations while maintaining quality standards and market responsiveness.

Future Expansion Timeline

The company continues to progress with Phase 2 of its expansion plan, targeting capacity enhancement to 15,000 pieces per year with anticipated completion by June/July 2026. This systematic approach positions the company to achieve the sustainable revenue target of ₹300-350 crore at optimized utilization levels while capturing significant market share in the growing liquid cooling solutions sector.

Aeroflex Industries Limited has received a significant tax demand from the Income Tax Department, with authorities seeking Rs 41.76 crore for assessment year 2018-19. The company disclosed this development to stock exchanges on March 27, 2026, under regulatory compliance requirements.

Tax Department Order Details

The Assessment Unit of the Income Tax Department issued the order under sections 147 and 144B of the Income Tax Act, 1961. The demand stems from the disallowance of a claim related to waiver of interest on working capital loan in a one-time settlement, which the department considers non-taxable under section 41 of the Income Tax Act.

Company's Response Strategy

Aeroflex Industries management has indicated its intention to challenge the order through proper legal channels. The company plans to file an appeal before the Appellate Authority within the prescribed time limit under the law. Based on the merits of the case, management remains optimistic about achieving a favorable outcome.

The company's leadership expressed confidence that the order will not have any material financial impact on operations, suggesting they believe the demand lacks substantial grounds.

Regulatory Compliance and Disclosure Timeline

The company acknowledged a delay in regulatory disclosure, explaining that the notification could not be made within the stipulated 24-hour timeline prescribed under SEBI regulations. The delay occurred because:

• The order was received via email on March 25, 2026 at 10:17 PM
• Concerned personnel were on leave on March 26, 2026 due to Ashtami and Ram Navami festivals
• The matter was escalated to the Company Secretary and Compliance Officer on March 27, 2026 at 10:00 AM

Financial and Operational Impact Assessment

Despite the substantial demand amount, Aeroflex Industries maintains that the order is unlikely to create material financial stress. The company's confidence in appealing the decision suggests management believes they have strong grounds to contest the Income Tax Department's interpretation of the working capital loan interest waiver treatment.

The disclosure was made pursuant to Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, ensuring transparency with shareholders and market participants about this significant regulatory development.