Aeroflex Industries Limited's board of directors has approved a comprehensive expansion plan worth ₹97.56 crores during their meeting held on December 18, 2025. The board also approved a preferential issue of equity shares to fund the expansion initiatives, marking a significant step in the company's growth strategy.

Board Meeting Outcomes

The board meeting, which commenced at 5:00 PM and concluded at 5:55 PM, approved several key strategic initiatives under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Capacity Enhancement Details

The expansion plan includes significant capacity additions across key product lines. For liquid cooling skids, the company will add 13,000 pieces per year to the existing capacity of 2,000 pieces per year, with completion targeted by June 2026. The existing capacity is currently under trial production.

The robotic welding lines and automatic welding stations, along with the annealing plant, are supportive machinery that will automate processes related to stainless steel hose assemblies without increasing capacity but enhancing operational efficiency. These installations are scheduled for completion by December 2026.

Preferential Issue Approval

The board approved the issuance of 30,10,398 equity shares with a face value of ₹2.00 each at an issue price of ₹182.70 per share, including premium. The preferential issue will be made to non-promoters and is subject to necessary regulatory and statutory approvals.

Key Investors and Shareholding

The preferential issue will be subscribed by six investors, with detailed shareholding changes outlined in the regulatory filing:

Extraordinary General Meeting

To consider the preferential issue of equity shares, an Extraordinary General Meeting (EGM) of the company's members is scheduled for Thursday, January 15, 2026. The meeting will seek shareholders' approval for the proposed fund raising initiative.

The company cited meeting future demands and adding value-added products to the portfolio as the rationale behind these expansion initiatives, positioning itself to capitalize on growing opportunities in data center cooling solutions and specialized industrial applications.

Aeroflex Industries Limited (ISIN: INE024001021) has reported its highest-ever quarterly performance for Q2 FY26, marking significant growth across key financial metrics. The company's revenue crossed the INR 100 crore milestone, accompanied by its best-ever EBITDA margins.

Record-Breaking Financial Performance

Aeroflex Industries achieved a total income of INR 111.00 crores in Q2 FY26, representing a robust growth of 16% year-on-year (YoY) and an impressive 31% quarter-on-quarter (QoQ). This stellar performance was driven by increased revenue contributions from its subsidiary Hyd-Air and higher domestic market sales.

The company's EBITDA for the quarter stood at INR 26.00 crores, growing 23% YoY and 65% QoQ, resulting in a record-high EBITDA margin of 23.5%. This margin expansion of 136 basis points YoY was primarily attributed to the company's focus on higher-margin, value-added products and favorable currency movements.

Key Financial Highlights for Q2 FY26

All financial figures in INR crores, except for EBITDA Margin

Resilience Amidst Challenges

Despite the imposition of U.S. tariffs on Indian imports, Aeroflex Industries demonstrated resilience in its operations. The company reported no cancellations of existing orders from U.S. customers, although some shipments worth INR 5-6 crores were deferred from Q2 to Q3. This reflects the strength of Aeroflex's customer relationships and the quality of its products.

Subsidiary Performance and New Business Ventures

Hyd-Air, the company's subsidiary, contributed significantly to the growth, with sales reaching INR 9.00 crores in Q2 compared to INR 1.50 crores in the previous year. The company also secured a second order for liquid cooling solutions from a large U.S. corporation, building on its breakthrough order from the previous quarter.

Domestic Market Expansion

Aeroflex Industries saw an improvement in domestic sales contribution, which increased from 19% to 27% of total sales. This growth was driven by both an increase in domestic business for Aeroflex Industries and higher sales from Hyd-Air.

Future Outlook and Expansion Plans

The company is executing a capex plan of INR 77.00 crores for expanding hose and miniature metal bellows capacity, expected to be completed by March 2026. Management anticipates EBITDA margins to remain in the 21-22% range going forward and expects the liquid cooling business to become a significant growth driver.

Asad Daud, Managing Director of Aeroflex Industries, commented on the results, stating, "This achievement reflects the dedication of our team, the trust of our customers, and our continued focus on operational excellence. We remain focused on deepening our focus towards higher value-added products and expanding our presence in emerging sectors such as liquid cooling."

As Aeroflex Industries continues to navigate challenges and capitalize on new opportunities, the company appears well-positioned for sustained growth in the coming quarters, driven by its diversified product portfolio and strategic expansion initiatives.