Market Cap: ₹1,943 Cr.
Aeroflex Industries Ltd (NSE: AEROFLEX) is one of the leading companies wich deals with the manufacturing of metallic flow products and solutions like hoses (flexible tubes like gas pipes and alike). These products are used for concentrated flows of liquids, gas and semisolids.
Business Model
Aeroflex Industries Ltd is a manufacturer of SS flexible hoses which contributes 60 of their revenue, and Assemblies & Fittings which contributes 34% of the revenue. Their manufacturing facility is located in Mumbai.
The company Exports to 88 countries across Asia, the Americas, Europe and Africa, through a diversified go-to-market model as per their latest investor document. Moreover, the company serves a wide range of industries like steel, oil and gas, mining, chemicals and refinery.
How is the Management of Aeroflex Industries Ltd
Upon the acquisition of Aeroflex Industries by SAT Industries, it was revealed that the promoters of both companies are the same.
Asad Daud, director
Asad Daud, who has been a director at SAT Industries since 2012, holds a Master’s degree in Accounting & Finance from the London School of Economics.
He has also completed Executive Education courses from IIM Bangalore and ISB Hyderabad. Under his leadership, the SAT Group has invested in over 125 startups and companies. Additionally, the board of SAT Industries includes three experienced independent directors.
Is Aeroflex Industries Financially Good?
On the very first observation, it is seen that the company is making consistent sales growth. Moreover, the operating margin and net margin are also growing which means the company is retaining profits.
The 5 years of average return on equity is above the industry average. However the company’s operating cash is declining when compared with the sales, and the reason is increasing debtor days which means the credit sales have increased.
Growth Expansion Plans
Aeroflex Industries has made significant capital expenditure in its plant and equipment, increasing the total capacity to 13.5 million meters per year. Additionally, in the most recent conference call with analysts, management reported progress towards expanding the capacity to 16.5 million meters annually by December 2024.
Furthermore, the company internally financed the acquisition of Hyd Air Engineering Pvt. Ltd. for INR 17.20 crores. This acquisition is intended to offer comprehensive solutions and reduce product lead times while also expanding the company’s presence in critical sectors such as railways, shipbuilding, and heavy industries.
Competitors
Suraksha Enterprises, Vansh Industries and Polyhose India Limited are some of the direct competitors in making industrial hoses and flow products. However, none of them are listed on any stock exchange.
Industry and Growth
After seeing the above figure it is evident that Aeroflex Industries caters to the heavy and major industries of India. with steel and Oil & gas contributing over 30% of the revenue and solar and fire sprinklers contributing another 30% growth is likely to be seen.
The steel sector is growing at a rate of 8.6% in 2023 and this year the figure is 7.7% according to the World Steel Association. moreover, the company is planning to get into sectors like robotics and aerospace as well. The nature of their product makes it available to a diverse range of industries.
Disclaimer
The information presented here is for educational purposes only and should not be considered financial advice. Please do your own research before making any investment decisions.
