Aequs, India's only vertically-integrated aerospace SEZ, is poised for a valuation premium over pharma CDMOs, according to a recent report by Nuvama. The company's shares rose by 4% on Tuesday, driven by its robust $889 million order book and strategic positioning in the aerospace sector.
Nuvama highlights Aequs as a sector outperformer, noting its unique position as India's first pure-play aerospace precision manufacturer. The company supplies machined aerostructures, landing gear, and engine parts to major OEMs like Airbus and Boeing from its Belagavi campus. This has been achieved through 15 years of strategic capital allocation, resulting in a NADCAP-certified facility.
The brokerage forecasts a 42% sales and 84% EBITDA CAGR for Aequs over FY26-29, supported by its substantial order book, which offers a 7.4x revenue coverage. This order book is not merely a pipeline but consists of solid purchase orders aligned with OEM production schedules.
“Fifteen years of patient capital allocation has produced something genuinely scarce in Indian manufacturing, a NADCAP-certified, vertically-integrated aerospace SEZ supplying machined aerostructures, landing gear and engine parts (from a single campus in Belagavi) to Airbus, Boeing, Safran, Collins and Bombardier.”
Nuvama
Despite the current losses in its consumer segment, Nuvama sees potential for growth, particularly in consumer electronics, which is expected to outpace other segments. The brokerage remains conservative in its margin assumptions, drawing comparisons with global peers.
Nuvama values Aequs using a 30-year DCF at a 16% WACC, reflecting the longevity of the aerospace programs it serves. The report acknowledges risks such as raw material lead times and Boeing's production recovery but remains optimistic about Aequs' growth prospects.
Background
With a market capitalisation of around Rs 16,000 crore, Aequs has shown significant stock price movement since its IPO, which was oversubscribed across all investor categories. The company's strategic initiatives and robust order book position it well for future growth.
Aequs' strategic initiatives and robust order book position it well for future growth, with investors closely watching its performance in the aerospace and consumer electronics sectors.
