Thank you so much. Good morning to everyone.

I welcome you all to Aeroflex Industries Limited fourth quarter and FY26 earnings call. Joining us today are members of our senior management team along with the representatives from Strategic Growth Advisors, SGA, who are our investor relations partner.

I hope you have had the opportunity to review our financial results and the investor presentation which is available on the stock exchange website and also on the company's website. I'm happy to report that FY26 has been a great year for the company, where our execution excellence, our strategic expansion, and the market opportunity have all come together to deliver the highest ever quarterly and yearly performance up to date.

I'm also happy to share that the board has also recommended a final dividend of 20%, which translates to about ₹0.40 per equity share of face value ₹2 each, which reflects our continued commitment to delivering value to our to our shareholders. The company operates in a very niche global market with limited competition, and we also benefit from a competitive advantage as the only India-based manufacturer with with such scale and with such capabilities.

FY26 has been a landmark year, which is which has been marked by our successful entry into the the skid assemblies and and advanced flow control solutions for high-performance liquid cooling applications, which are used specifically in data centers and AI infrastructure segment. As the consumption of data increases and continues to scale rapidly across the world, primarily led by AI, cloud, and high-performance computing, there is a limitation of traditional air cooling, and which is, which is becoming increasingly evident.

Thus, liquid cooling is emerging as the preferred solution for the next-gen data center infrastructure, given its performance superior performance efficiency. Now, talking about the key highlights for the quarter, our our hoses and assemblies business continues to demonstrate steady and consistent growth, which is also supported by robust demand coming in from diverse end-user industries and also our established global customer presence.

We have achieved an EBITDA margin of 23.86% in Q4, which also reflects our strong operating leverage and also is a result of the continuous improvement in our product mix. Talking about our subsidiary, Hyd-Air, which has continued to to gain strong traction during this quarter, delivering a robust year-on-year growth, primarily driven primarily driven by healthy demand across its entire product portfolio.

We also continue to enhance the product portfolio and expand the market of Hyd-Air. Also, Hyd-Air in the future would play an important role in in the new-age businesses that that Aeroflex plans to enter into in the coming years.

Our newest segment of providing liquid cooling solutions continues to expand, and with ongoing supplies of the skid assemblies which has commenced from from the end of Q3 and also the supply of advanced flow flow control components for high-performance applications. In in the last financial year, we achieved a strong strong traction in our skid assemblies business with a sales of 617 skid assemblies, which resulted in an overall sales of approximately ₹21.2 crore.

This has been done over the last 4 months itself. This performance shows the increasing market acceptance of our products, and it also reinforces our capability to deliver customized, high-value, and solution-oriented offerings, positioning this segment as one of the key drivers of the company going forward.

We have also we also showcased our entire portfolio of advanced flexible flow solutions at the Data Center World exhibition which happened in Washington last month. It reinforced our strategic focus towards the next-generation thermal management technologies for the global markets.

Currently, we have scaled our skid assemblies capacity from 2,000 units per annum to 6,000 units per annum, and we are on track to further expand the same by the next quarter to 15,000 skids per annum. We are also strengthening our innovation pipeline with more than 16 products under development, which are primarily focused on high-growth segment.

Now coming to our assemblies segment, we have continued to strengthen our capabilities through expansion of capacity and also have commissioned two robotic welding lines to enhance automation, precision, and operational efficiency. In addition, we are also investing in advanced manufacturing capabilities, including a new annealing furnace facility targeted for commissioning by the end of this year.

These initiatives are expected to increase our product offerings, also increase our throughput, and also support the deeper penetration that we want to to do in in specially mission-critical applications. Our metal bellows segment has begun to gain traction across a range of applications, and we are expecting that this division to deliver strong growth in the coming years.

Now talking about our financial performance for for Q4 FY26, our total income stood at 126.5 crore, which is a growth of 38% on a year-on-year basis, which is driven by an improved product mix and a growing contribution from value-added solutions. The the EBITDA for the quarter came in at ₹30 crore, which is robust growth of 59% on a year-on-year basis.

Our EBITDA margin also saw an improvement of 326 basis points, and it came at about 23.86 percentage. The profit after tax stood at ₹17.6 crore, which is a growth of 57% on a year-on-year basis, with a PAT margin of almost 14%.

Our cash profit grew significantly to 24 25.4 crore, which is a growth of 67% on a year-on-year basis, which reflects strong cash generation and improved operational performance of the company. Now talking about our FY26 as a year, the total numbers, I'm happy to share that we have been able to achieve the targets that we had set out at the start of the financial year.

Our total income stood at ₹443.3 crore, which is a growth of 17% on a year on a year-on-year basis. This is despite the fact that we had a very weak first quarter.

EBITDA stood at almost ₹100 crore, 99.7 to be precise, translating to an EBITDA margin of 22.6% and a growth of 26% in value terms on a year-on on a year-on-year basis. Our our PAT stood at 55.5 crore with a PAT margin of 12.5%.

Our skid assemblies segment, which is our newest segment, has begun contributing to the top line, and now and is right now accounting for only 5% in FY26, but we expect that this share to scale significantly in the upcoming years. Our value-added product segment, which includes assemblies and fittings and bellows, contributed 52% of the total sales.

The domestic sales contribution has also increased to 31% from 26%, which is mainly driven by the increased traction coming in from the skid assemblies and also from Hyd-Air. Now looking ahead to the current financial year, which is FY27, we remain focused on deepening our strategic shift towards higher value-added products and also expand our presence in emerging sectors such as the data centers and AI infrastructure.

We will continue to pursue growth through new product development, through optimization of margins, capacity expansion, geographic diversification, and also inorganic opportunities. These initiatives position our company to strengthen our market leadership and deliver consistent growth, both in terms of top line and bottom line.

With the strong order pipeline that we currently have, long-standing customer relationships, and our ongoing investments in technology and capacity, we are well-positioned to to sustain our growth momentum in the near future. We continue to strengthen our capabilities and to enhance our execution at the ground level and aim to deliver robust growth over the next few years.

With that, I would like to conclude my remarks, and thank you so much everyone for attending the call. We can now open the floor for Q&A.

Thank you.

Thank you for the opportunity. Am I audible?

Yeah. I had a few questions.

What is the order book for the liquid cooling skids that we have currently?

In the liquid cooling skids, we work on a contract with the supplier with whom we have an exclusive contract. They have given a pipeline for the entire year, and then they break it down into quarterly POs.

Since right now we are dealing with one specific or only one particular supplier, due to disclosure agreements, we are not be able to share the order book with them that we have. Yes, we have a vision for the entire year that they have shared with us.

Our capacity expansion is based on the same lines.

Okay. Just if you can share something on the planned utilization levels that we'll have for the 15,000 capacity for the full year.

In half year we'll have 6,000 capacity, I think about 6,000, and then we'll go on to 15,000. What planned utilization levels?

I would say the maximum utilization that we can do of the capacity would be about 75% to 80% at the peak level. Obviously, when we commission the capacity, to get it up to 75% would take its time as naturally with any expansion.

The peak utilization, you can consider it at between 75% to 80%.

Just a follow-up, for 6,000, we can utilize up to 75% in the current year? Right.

Yes. Okay.

Okay.

My second question is regarding the metal bellows. Could you share numbers, what how much was the business we did in the current year in the previous year for metal bellows in FY26?

In the current year, on an annual basis, we did about ₹8 crore of business from the metal bellows section. The majority of the business came in in Q3 and Q4, where we have seen the uptick in sales beginning in the last two quarters.

We expect that this year the bellows division would grow significantly because we have certain large inquiries coming in from OEMs, we are hopeful to get those converted and see a significant uptick in the sales of metal bellows in the current financial year.

Okay. Lastly, what was the Hyd-Air revenue for the FY26?

Hyd-Air's revenue in FY26 was ₹31.64 crore.

Yeah. That's it from my side.

Thank

you, and all the best. Thank you.

Hello. Can you hear me?

Yes. Yeah.

My question is just a follow-up on the previous participants' with respect to Hyd-Air. What's our current utilization, and how we planning with respect of Hyd-Air, and how we planning to do any capex in the Hyd-Air business?

In terms of utilization, I think Hyd-Air is currently at about 60% utilization. Our aim in this financial year is to utilize the capacity of Hyd-Air for internal consumption for Aeroflex Industries, because we have certain projects coming up in the next few months where we have requirement of specific fittings which we are going to manufacture in-house at Hyd-Air.

These are products for high-end applications. Hence, we want to utilize the capabilities of Hyd-Air for our internal consumption.

Right. On the liquid cooling part, you mentioned that the liquid that the technology you have a technology exclusive agreement with one of the US company US-based company with respect to your tech- technology, right?

No. With regards to technology, with regards to supply, with regards to everything.

We have an exclusive contract with them for skid assemblies, yeah.

I just want to understand under this agreement, are you sharing any revenue, or are you giving them any royalty, and if so, can we know anything with that?

I would just like to clarify. This is an exclusive agreement where we are going to supply the skid assemblies to them.

We have an exclusive agreement for the India market where whatever skid assemblies that we manufacture, we will be supplying it to them, and then obviously they will be supplying to their customers. Their customers are all the companies who are setting up data centers, basically.

Basically,

you are not paying anything to the US client, right? Of course.

This is a US-headquartered company. They have an very big operations in India.

We have tied up with the India subsidiary of theirs, basically.

Okay. Understood, sir.

My last question is so during the quarter, we have seen that the exports have decreased from almost 69%, it went down up to 60%, and your domestic business is picking up. Can we expect this to be the new normal, like 40-60 split between domestic and exports?

I would just like to clarify, export hasn't not decreased. The ratio has changed.

That does not mean the value of exports has decreased, just wanted to clarify that. Domestic share has increased significantly, reason being that the domestic sales has almost increased by about 40%.

That's why the ratio of domestic is higher as compared to the the previous. Exports has also increased in double digits in Q4, despite the fact of the entire situation that you are seeing, which is happening, in West Asia.

Our exports have also increased, but because the domestic has increased significantly more than the exports, hence the ratio of domestic is now more. Obviously, because the entire business of skid assemblies will be in the domestic market, this ratio of domestic would also increase in the near future.

Can we expect the same like you mentioned that domestic business increased by almost 40%, can we expect that domestic business to grow at a higher rate versus the export business, or will it normalize?

Yes, definitely. No, because the entire skid assemblies will be sold in the domestic market right now, the share of domestic would increase for sure.

Okay. Thank you, sir.

I'll fall back in the queue.

Hi. Sir, am I audible?

Yeah. I can hear you.

Yeah. My question is related to more understand the product portfolio.

I'll have some basic questions to understand. What is the share of our product share of in the overall TAM of the data center and the liquid cooling systems?

How much our products contribute in the costing side? Do we have any patents on the products?

Or or in terms of technology?

Is

there any competitive advantage in over export market? What's the cost benefit we have?

This sort of questions, sir.

Okay. I'll go with the last question first.

Right now for the export market for the liquid cooling, we are not supplying our skid assemblies in the export market right now. We are only supplying our hose assemblies, which goes into data centers in the international market.

Skid assemblies right now is 100% in the domestic market only. In terms of the patents, we are working with, like I mentioned, this company.

We are actually jointly developing the product along with them. Obviously, since they are the principal, we are designing the product along with them.

We are aware of the technology that goes into the product, but right now we don't have any patent on the particular product. Also reason is because the design of every data center is unique and it's different.

Hence, the skid assemblies required for every data center in terms of the design would be different. Hence, there is no patent per se right now.

It is about the technology, how do you manufacture the product in such a way that you reduce the operational cost for the data center. That's the real skill in this particular business.

Because ultimately there is a huge operational cost for data center in terms of cooling. How do you reduce their operational cost?

That's the real USP in this. Then total TAM, I think in the data center market right now is huge.

It's growing at almost 35% on a year-on-year basis. Right now it's about, I think, about $3 billion $3-odd billion right now, and which is expected to grow to almost about $21 billion in the next 5 to 6 years.

That's almost a CAGR of close to 34% 35%, right? That's the market that we are capturing right now.

Although right now we have very very very very small percentage of the market, but our aim is to keep increasing our market share and also expand into more and more products which will be used in the data centers in the near future. Our aim is to, Yeah.

Just Just

Just to follow up on that, because the the question will be answered. Let's say just to add here the unit economics of or the cost of 1 GW of capacity, I have a figure, let's say, 1 GW of capacity costing you around 50 to 60,000 crore in India, not the hyperscale AI data center, but the normal one, right?

Now, this figure is correct, first of all? 50 to 60,000 crore for 1 GW of

I would not be able to comment on that because I am not in the business of making data centers, probably not able to comment on something which I don't have Okay.

Just a broad TAM, I'm just trying to understand here. Let's say, if you just Google it, it will give you 50, 60,000 crore of it.

Now, in the liquid cooling In

the interest of time for everybody, can you be a little specific on your question? It is taking up some time for Yeah.

Sure. Sure.

Sure. Sure.

Sure.

Thank you.

Yeah. Just wanted to know the cost of 1 GW of capacity, what is the share of our products, basically?

How much we are

Just to clarify. We are not selling directly to the data centers, right?

We are selling to the companies who provide the entire liquid cooling solutions. The skid assemblies is a part of the entire liquid cooling.

It's not the complete liquid cooling. That is to

the companies who are providing cooling distribution units?

Can I just finish my answer, please, if you don't mind?

Sure. Yeah.

My point was that we are only providing a part of the liquid cooling. Hence, to give you an exact number in terms of how much is our product as compared to the entire cost of the data center would be difficult to answer for us because we're not supplying directly to the data center.

From what I've understood from the market knowledge that we have gained is that the liquid cooling comes to about 10% of the cost of the data centers, anywhere between 10% to 11%. That's the cost of the entire liquid cooling, which includes your primary, secondary, and all kinds of cooling at a data center.

That's the TAM for liquid cooling. Right.

Okay. That's very helpful.

Thank you.

Okay.

Thank you so much for the opportunity, and congratulations on a good set of numbers, sir. Sir, first question is regarding if I go through the con-call of last quarter, you said ₹42 crore of skid order for immediate execution.

There was some part of execution which was supposed to be done in this quarter, but was not done? If not, then what was the reason?

Is there some supply bottleneck?

Right now the main bottleneck is from the design aspect, where the design which was initially to be provided by the principal is actually now being done by our entire team. Designing of the skid assemblies is the critical aspect here, where until and unless the skid assemblies is designed and finalized, the production cannot start for the same.

Plus also what we have seen over the past couple of months is that there is a significant customer quality control and customer audits, the end customer I'm talking about, not the one that we are working with, the end customer who's ultimately at whose data center the particular skid assemblies will be installed. There is a very very stringent and very detailed quality checks that are conducted by each and every customer, and every customer have their own unique way of doing the audits.

Obviously, some look at some specific things, some look at the welding aspect, some look at the design aspect. That is one where they still feel that I think they are still slightly behind the supply as compared to the demand is because that the design and the quality checks post the manufacturing, that is where we think a bit of a bottleneck in terms of the time.

I think we're hoping that over the next couple of months, I think that will be smoothed out, and then we'll be able to see more business, in the sense more sales happening from this particular business. In terms of manufacturing, we're still at much higher, but obviously supply depends on a lot of these quality controls and quality checks.

Understood. That helps, sir.

Sir, my second question is you although said for 6,000 skids, we'll be probably reaching 75% of the utilization, but let's say once we expand it to 15,000, right, the incremental capacity would probably reach up to what utilization by let's say the end of year?

Our target would be that by the end of the financial year to reach to at least 60% to 70%, almost very close to the capacity that we are setting up. Our target would be to reach there by, say, March of next year.

Obviously, it depends a lot on the operational side, because there is a lot of operational excellence required to manufacture these kind of skid assemblies.

Understood. Sir, let's say, and that's great, and let's say if we are probably expecting to reach 60-70% of the utilization, are we probably planning to add more capacity towards skids?

Are you planning to go beyond 15,000?

See, our ultimate aim is to go beyond 15,000, but I would say right now our focus is to get the first 15,000 commissioned and get it up and running. Obviously the first focus is over there, and then obviously once that is under process and once it's commissioned, we'll then look at further expansion.

Great. Sir, you mentioned the PPT as well, probably we represented in an expo in USA.

Any engagement from there? Any leads from there?

Are we engaging with some customers apart from the one which we probably won in domestic? Are we engaging with some other customers in the international market through that expo or somewhere else?

Yeah. Our aim in that exhibition was to expand our business internationally also in terms of the liquid cooling space.

That is why we exhibited. In that exhibition, we have already got certain leads, and then the team has started working on those leads and to discuss with those customers with regards to the liquid cooling solutions.

Great.

We've already started discussions, but very difficult to comment on that right now about the status, yeah. No,

understood. Sir, for Hyd-Air, you said we're probably using it for niche application and high-end application.

Would Hyd-Air be probably used for connectors in DC as well? If

yes,

then what I understand is for us to probably use Hyd-Air connectors, we need approvals from the HVAC players, right, the customer we are right now working with. Are those sampling and approvals going to them, what stage are we in that?

Yeah. Like I mentioned, we want to utilize the capacity of Hyd-Air for our internal use right now because we are seeing a lot of demand coming in for end fittings and connectors not only for our hose assemblies and for some specific applications in HVAC and also for data centers.

Hence, we're planning to utilize the capacity of Hyd-Air over there. Yes, in terms of customer checks and customer audits, I think at whatever manufacturing facility we manufacture any product, right, obviously first we require all kinds of certifications which are required by the customer, and then obviously customer audits and customer supply checks are a must before we start supplying to these high-end industries.

Okay. We are in the process of I'm

No problem. Thank you.

Thank you so much, sir.

Thank you.

Hi, Asad. Thanks for the opportunity.

Hi.

First question, at 15,000 skids full utilization, can you give us a sense on how many megawatts of liquid-cooled data centers that can support?

It's difficult to give a number for that in the sense. I can probably say that in terms of the business, I can say that at, say, 75% capacity utilization, right, and which is I said could be the peak, we can expect a total revenue for the business to come in at about 300 and ₹325 to about 300 and ₹330-odd crore.

Now in terms of, sorry

Sorry, go ahead.

Yeah. So, 300 and 300 and ₹25 to about 300 and ₹30 crore.

In terms of megawatts, it's it's slightly, difficult. Reason being, if you see that some skid assemblies that we manufacture sell at a higher price, some skid assemblies that we manufacture sell at a slightly lower price.

It and the entire design depends on the design of the data center, right? How they have designed the entire data center with, Is it a more, flat data center?

Is it a more vertical data center? Is it a, is it a different style of data center?

Commenting on specifically how many megawatts that would convert into would be difficult for me to to to give an answer. I can talk about the revenue, yeah, that how much it'll generate us.

Yeah.

Got it. On the base business, can you talk about the share of the largest customer?

If you could talk about the growth outlook from that customer or from those set of customers given the infrastructure build-up in the US that you're seeing now?

Are you talking about the US, or are you talking about the liquid cooling, the skid assemblies?

No, the US business ex of skid assemblies, yeah.

Okay. I think our biggest customer in the international market contributes about 25 26% of our sales right now.

In terms of the outlook, well, we have seen, despite the fact that last year, US had all kinds of issues in terms of initially beginning the year with tariffs and then the tariff got even bigger coming up to the middle of the year, and then ultimately starting at almost the middle of Q4 when the tariffs release came in, but then suddenly then the war happened. Despite all of that, I think our US business contribution to our overall sales has increased in terms of the sales.

In terms of the value also, the US business has increased as compared to the previous year. I think despite all of that, we have seen significant uptick.

The start of the year, to be frank, we were expecting the US business to do much, much, much better. I think I would say, despite everything that happened this year in the US, despite all of that, the US business has still shown significant jump.

I think I would say that's a great achievement by the team to get this kind of business from the US despite all of these issues that have happened in the year.

Got it. Good to hear.

One final clarification, the connectors that you spoke of, these are the QDs that are proven to be bottlenecks in the HVAC industry, specially for liquid cooling elsewhere in the world. Is my understanding correct?

No, not necessarily. The connectors that I'm talking to you right now are used of some of it are used for skid assemblies, some of it are also used for hose assemblies, which are ultimately used in data centers.

In terms of our bottleneck, the bottleneck is not the connectors per se. It's our bottleneck is right now the design part, as I said.

The second is the customer check and the customer audits that happen on a rigorous basis and almost like every day.

Okay. Your the largest account growing at a certain pace, is that because of higher wallet share with that specific customer, or the end industry for that largest customer growing at that pace?

You are talking about the

in the US business.

In the US business. In the US business.

In the US business, we have seen not only the largest customer grow, but also the other customers that we have have also shown a lot of growth. We are also seeing a lot of demand coming in for hose assemblies from the US from customers who we previously did not have.

These customers are the ones who are looking for the products that we're manufacturing, whether it's the hose assemblies, whether it's and like I said, even we've started to receive orders for metal bellows as well. We're seeing traction for these products in the US as well.

Great to hear that, sir. Thank you so much.

Yes, sir. My first question is a follow-up on the previous question.

This 60% around 60% utilization that we are targeting by next year March, is that incremental orders coming fully from this principal company, or are we also looking at export orders for the skids?

Right now what we have is for the orders which will come in from the principal only. Because we have not taken into consideration the orders which will come in for any other, the other customers because the other customers, the talks have just begun, it's too early to say that.

Okay. Sir, I saw that in this quarter's PPT, we had increased miniature bellows capacity to 60,000 pieces.

Will this be sufficient for our 15,000 skids, or will we be needing more capex in this regard?

Sorry? Uh

For the miniature bellows segment, will we be needing any incremental capex?

In miniature metal bellows, like I mentioned in my previous call, we won't be doing any further expansion except a few ancillary equipments and machinery that we require. We have redeployed the capital that we had allocated to miniature metal bellows to the liquid cooling vertical.

Right now, as I speak, there won't be much capex that would happen in the next in at least this financial year.

Sir. One final question Also just wanted to Yeah,

yeah. Please go ahead.

Yeah. Yes, sir.

Please continue.

Yeah. Also just wanted to say that, with regards to the utilization of 60%, right, the 60% is on I'm talking about March closing, which would mean that by March we expect that in the month of March, we will be hoping to achieve 60% utilization.

Just wanted to clarify to everyone that it's not 60% for the entire year, it's for the March closing.

Yeah. Sir.

This is on the 15,000 skids, right?

That's correct.

Okay. All right, sir.

Last question. There was an income tax demand of around ₹40 crore, relating to waiver in 2019, if I am not wrong.

This is like almost a full year's PAT number, how confident are we on this appeal, and could you give me an expected timeline for when this will get resolved?

Yeah. This relates to I think financial year 18-19, I think.

Sorry, financial year 17-18 and assessment year 18-19. This is with regards to the So when we took over this company, which was a stressed company, there was a waiver of loans sorry, the waiver of of interest by the banks and and, by the banks, basically.

We have al- already, we had done the necessary disclosures in both our financials and our income tax return. We are confident that this is something which will be, which would come in our favor in in the appeal that we're going to file.

Also, would like to just, tell everyone that because of time-barred situation also, I think the Income Tax Department reopened this particular assessment year, where the assessment for this particular year was already closed previously, but it was reopened. Because of time-barred issues, I think they have they have claimed that it is an undisclosed business income, whereas it was, clearly disclosed both in financial statements and also in the income tax return.

As per our, our advisors and our our lawyers, we are extremely confident that these things is going to be reversed in the appeals that we'll, going to file.

All right, sir. That's it.

Thank you so much.

Yeah.

Good morning, sir. My first question is on the data center business new products ex of skids.

Could you talk about when can we expect these products to be launched in the market and start contributing? As well as, I believe we are also adding a lot more products, what is your strategy of in terms of building a team, what it is today, what do you see this team size in next two, three years?

In terms of the team, right, I think the entire team, whether you talk about sales and marketing, operations, technology, I think everywhere you'll see a significant push on increasing the team, which is also pretty evident by the increase in the employee cost if you see from our financial numbers. The thrust is to build the team and to scale it up.

With regards to the I sorry, I forgot your first question. What was your first question?

It was when do you expect new products apart from skids, we are adding lot more new products in data center business. Correct.

Yeah. In the data center business, apart from the skid assemblies, we have our hose assemblies, which we are designing specifically for data center projects.

These hose assemblies will be used in data center applications, whether it's for the last mile cooling or whether it is for the fire fighting solutions or whether it's for transfer of any kinds of other liquids. We have already started developing those products.

It is under approval at the customer's end. Also our annealing plant that we are planning to commission would also contribute to this, because a lot of the hose assemblies in data centers have to be annealed.

That would also contribute to that. These are the new products that we're developing.

Some of it are under development, some of it are under customer approval. I'm hoping that from the next quarter, we'll start to see the sales coming in from these products as well.

Sure, sir. That is helpful.

My second and final question is, so, sir, we've started supplying skids for domestic market and I believe our customer will put these skids in the data center. I also think that you would have already started the process of getting some global approval because the same customer is a very big player in the global market.

Where are we in that journey of getting the approval of the skids for the global market? Can we expect something in FY27 or mostly in FY28 only we'll start getting the approval and maybe supply also for the global market?

See, in terms of the global market, our aim is to have or to start at least some supply of skid assemblies in the international market in the current financial year. It'll be difficult to give any specific number or any specific guideline on that.

Yes, the idea is that the future expansion plan for us is that apart from the business in India with regards to skid assemblies, there is also a very big business internationally for the skid assemblies. Definitely, we will be working on it.

Now, whether it is with our existing exclusive partner or whether it's with other companies internationally, I think that's a decision that we will take as and when we see some inquiries coming in.

Sure, sir. Thank you for answering the question.

Yeah.

Thanks for taking my question. Sir, we are manufacturing skid assembly and also metal bellows and also hose pipe.

Can you just give some rough idea how much we are competitive compared to if it is manufactured outside India or it's in USA or something like that?

In terms of skid assemblies, right now we are manufacturing and supplying only in India. Our competitiveness internationally, I'll not be able to comment because we have not started to supply internationally.

Obviously in India right now, we are among the only players who are manufacturing and supplying skid assemblies. I think right now it's more about supply than about pricing.

With regards to the bellows and the hose assemblies, yes, we are the largest manufacturer in India for hose assemblies, right? From the economies of scale perspective, we are extremely competitive in terms of our pricing, especially if you consider the international market, where in terms of our business, almost 60% of our overall business is exports, but if you see from the hose assemblies perspective, almost 75% to 80% of the business of hose assemblies actually comes from exports, which means that our products, first of all, meet the quality which is requirement of the international market.

Secondly, it comes at a much better price as compared to what they would be buying locally. Definitely, we are very competitive.

Sir,

percentage-wise, it could be a 30-40% we are cheaper?

Yeah. I would say on a ballpark figure on a landed cost, we'll be definitely 25% to 30% cheaper.

That would depend a lot on product to product, on market to market. It's slightly more in the US, it's slightly lesser in Europe, it's even slightly lesser in the Middle East and Africa.

It depends. International it's a big market.

US works very differently as compared to Europe, which works very differently as compared to Middle East and Africa.

Thanks for answering. My last question is regarding we have got these group companies.

Are there any plan to merge it to get some economy of scale or something like that, or can you explain what are the business we are doing there?

We have other group companies, but I think since this call is specifically for Aeroflex Industries, I'll limit my answer to Aeroflex Industries itself. If you have any other questions on Aeroflex Industries, I'll be able to answer.

With regards to the group companies, we can discuss it offline. Sir, but

our management which will be involved in that managing other companies also, that's why my question.

No. Right now I'm managing Aeroflex Industries.

Okay. Sir.

Thanks for answering, and very best wishes for current year. Thank you, sir.

Thank you. Thank you so much.

Hi, sir. Thanks for taking my question, and first of all, congratulations for the great set of numbers.

Sir, specifically for the other business, excluding the skid assemblies, what type of growth are we seeing in this year, and if you can specify about the EBITDA margins, consolidated EBITDA margin for FY27, that would be very helpful.

Yeah. In terms of the business, right, the overall growth in the business I think if you see in this quarter, we have grown by almost more than 35%, right?

Our aim is to have a similar growth in the next few quarters as well. In terms of our EBITDA margins, last year we had an EBITDA margin of 22.5%.

I think this year the full year target is to have an EBITDA margin of around 23% in terms of EBITDA. Our aim is that ultimately over the next a couple of years, the EBITDA margin should reach to about 25% annually.

Sir. Specifically for skid assemblies, what type of EBITDA margin currently are we enjoying in skid assemblies for data center cooling?

Will not be able to comment on specific EBITDA margins for specifically skid assemblies, reason being that we're working with just one customer right now, will not be able to share on public forum. I can say that the overall margins for skid assemblies is in line with the average margins of the company.

Okay. The average selling price per skid assembly, what type of ASP can we expect in this year or going forward for the next two to three years?

Currently for this year, we had around 3. something, 3.4 lakh

average selling price for the skid. See, typically, skid assemblies, there's a wide range with regards to per skid.

Like I mentioned, the wide range is because the different data centers have different specifications and different requirements. I would say to consider an average, I think a 3 lakh to 3.25 lakh would be an average that we can consider in terms of the average selling price for a skid assembly.

Sir. Thank you so much, and all the best for future.

Thank you so much.

Hello. Good morning.

Am I audible? Yep.

Good morning.

Yeah. Congratulations on the set of numbers.

A few questions from my side. Firstly, on the cooling skids.

You mentioned that we'll reach close to 60% utilization on the 15,000 capacity by March, so that's close to a 700 units number just for the month of March. How do you see the volumes of skid assembly kind of panning out for FY27 and maybe FY28 as well, if you could guide?

Difficult to give a volume specific number. Like I mentioned, right, skid assemblies, So, last financial year, we sold about 617, right?

The plan for this year is to, obviously we've scaled it up to 6,000 and then for further scaling up to 15,000 by the next quarter. The idea is, like I said, to reach by March '27, to reach about 60% utilization for that particular month, right?

That's the aim that we have right now. Obviously, I think one year is a big time where a lot of things can change for the good, right?

Last year same time, we did not even have skid assemblies as part of our business,

right?

We'd just ventured into it. This year itself it's now contributed about 5% of our business, and I think I expect that the contribution of this business in the current financial year would be close to I would say, anywhere between 20 to 20

I'm sorry, I lost your

voice.

I couldn't hear the last part.

20 to 22% contribution of the entire business would be through skid assemblies.

Through the liquid cooling. That's great.

Also, secondly, on the metal bellows, you said you had a ₹8 crore revenue figure for FY26. How do you expect that scaling up?

Because I think the margins in metal bellows are the best of all of your products currently, how do you expect that business is going to scale up in the next 2 years? How much contribution you expect coming from metal bellows specifically?"

Yeah. I think this year has at least the start of the year was a bit of a challenge for the metal bellows division, specifically, owing to the fact that we were expecting this business to big business to come in from the US, and the tariff did not, the tariff actually played a spoilsport specifically for the metal bellows business, because that was a, new vertical for the company.

If you see that over the past a couple of quarters, they've started to see the traction. We are at an ARR right now for of about, 12 crore right now at an at an ARR.

We're looking to, to grow that significantly over the next 2 years so that we reach at least, at least 50% to 60% of our capacity utilization. Metal bellows definitely has the best margins is as compared, in relation to all our products, but in relation to all our products, but the the the sales cycle in metal bellows is slightly longer as compared to our other products.

Okay. This 50-60% capacity utilization, will you achieve in the 2-year time frame?

That's what we are kind of

Yes, that's the target. Between 2 to 3 years, yeah.

Okay. The current utilization for metal bellows for '26 was at what level?

Very low. I do not have the exact figures, but yeah, I think extremely low.

Something less than 20%.

At peak utilization, what sort of revenues could you achieve on the metal bellows side?

I think at the peak utilization of the metal bellows, I think you would reach about ₹80 crore at the top utilization, the maximum utilization.

At close to 85% utilization?

About approximately.

Okay. That's great.

Again, you said that we are targeting that 20-22% from the liquid cooling. How do you see the proportion of the business vertical kind of changing?

That is, you see the assemblies and the metal bellows kind of having a proportionate in the sales going forward? Cuz this year, I think they've contributed close to, I think, 52-53%, Asad Daud:

Yeah. I think, obviously, the hose assemblies would continue to contribute the major portion of the business of the company for the next few years for sure, because that's the core business right now.

We'll see over the next few years the percentage of contribution of skid assemblies would increase year on year. Obviously, the reason is because that we are expanding our capacity in that particular segment, and this is a segment where we see a huge opportunity being there right now, and we want to take the full advantage of that.

The contribution of skid assemblies would definitely continue to grow to our overall business. I would say at least for the next two to say 2 to 3 years, I think hose assemblies would still be the major contributor to the business.

That's great. On the skid assemblies, you said you are looking for some global sales, this will be through the exclusive client we have, or are we looking to tie up with another company based in US that is also selling in US?

How do you see that kind of panning out?

Like I said, right now we have not finalized anything. We are open to exploring all opportunities.

Right now we don't have any fixed plan that we would go only on this route. Right now we're pretty flexible on that.

Okay. This 15,000 capacity, you're strong

Hello. Yes, thank you for giving the opportunity.

Recently in US, they have announced the Section 232 tariffs. What is the impact on that on our business?

The 232 tariffs was prevalent with before as well. Right now on our products, the tariff has been reduced.

With effect from February I think about 15th of 15th on the middle of February, approximately. Right now the tariff on our products has been lowered.

We don't have any issues of tariffs as I speak.

Yes, but what is the percentage of tariff currently on our products?

I think it's around 15%, but I'll have to just double-check. I think in the range of between 10% to 15%.

Okay. Okay.

Thank you.

No worries.

Hello, sir. Congratulations on the numbers.

Most of the questions were answered. I just wanted to understand can you just reiterate the complete company guidance for the year?

Both ex-bellows ex-skids and on the base business.

Like I mentioned, that with regards to the capacities that are coming up right now, I think we expect the last quarter we grew at about more than 35%, and I think on a yearly basis, we expect to achieve that kind of a growth, primarily being that we have significant capacities which will be commissioned at the start of the year, and which will help us to scale up the business. Obviously, skid assemblies would play a significant role in that growth, naturally, because we're expanding significantly on that.

You can say about 35-odd percent growth is something that we are looking at in the current financial year.

Sure, sir. What would be the contribution from the base business?

Base business growth would be around what range?

Base business growth would be somewhere in the range of about 15%

to 20%. Sure.

I just wanted to know, as we are expanding into new products in data center, would it only be products which will be developed in-house, or maybe we are also looking at some acquisitions to acquire some capability?

We are open to that. In India right now, there are not many opportunities in acquired companies in this particular space because it's a very, very new space in India.

Internationally, there might be, but we are open to that. Not finalized anything as yet.

Sure.

Sure, sir. Thank you so much.

Hello. Good afternoon, and thank you for the opportunity.

I just had one question. I just wanted to understand some mature bellows players seem to operate at materially higher EBITDA margins than 20-30% that we are targeting.

I just wanted to understand is the gap mainly due to product mix, customer qualities, and maturity, utilization? I just wanted to understand over the medium term, if Aeroflex moves into more mission-critical export OEM bellows and assemblies, can the margin profile move above the current 20-30% that you're guiding?

The margin in metal bellows is like you mentioned, is significantly higher as compared to the hose assemblies. In terms of competitors who have a higher scale of business in bellows, I think the margins with them obviously depends, first of all, on the customer segment that they have; second of all, in which industry that they are supplying it.

Obviously, as like in any business, the higher the scale of the business, the higher the margins, right? That's naturally which comes with most businesses.

These three things are critical factors. Obviously, as we move our products into higher end, for example, applications such as AI infrastructure, data center, plus also some kind of ancillary to aerospace industries, definitely margins over there are much higher than other conventional industries.

Makes sense. Basically, the industry that we are targeting at the moment, we would make approximately the margin that you mentioned, 28-30%, but obviously if you move to better industries and learning curve according to scale, margins can get better, right?

Can get better, but obviously, it's depends on the industry that we are entering into.

Got it, sir. Makes sense.

Thank you, that's it from my side.

Thank you.

Thank you so much. Thank you to everyone who's joined the call.

If I have not been able to answer anyone's questions, or if you have any further questions that you would like to ask, you can get in touch with SGA, who's our investor relations partner, and also you can get in touch with the management to get your queries answered. Thank you so much.

I would just like to also thank the entire team at Aeroflex Industries, who have done a great job to achieve the targets that we had set out at the start of the year despite the initial hiccups that we had and despite all the geopolitical issues that have happened in this entire year. I would like to congratulate and thank the entire team at Aeroflex for the same, and just would like to tell everyone that, yes, we are in an industry which is at a high growth.

We are expanding our capacity and expanding our capabilities every year, and we look forward to your support in the future as well. Thank you.