Aequs Shares Tank 19%: Revenue Jumped 45% — So Why Did the Loss More Than Double?

Aequs shares fell 19% in early trade on Tuesday, October 27, dropping to Rs 196.50 from a previous close of Rs 242.40, after the precision manufacturer reported that its consolidated net loss more than doubled even as revenue jumped 45%. The sell-off made Aequs one of the sharpest fallers in Indian trade, on a morning when the broader market was only modestly lower.

What happened?

Aequs reported a consolidated net loss of Rs 52.4 crore for the second quarter of FY27, widening 154.4% from a loss of Rs 20.6 crore a year earlier, according to Inc42's report on the results. The Hindu BusinessLine put the consolidated loss at Rs 52.2 crore and noted it was only marginally lower than the Rs 53.2 crore loss in the preceding quarter. For the first half of FY27, the net loss stood at Rs 105.4 crore, compared with Rs 16.7 crore a year earlier.

That loss came despite strong top-line growth. Consolidated operating revenue climbed 45.3% year-on-year to Rs 409.1 crore, from Rs 281.6 crore a year earlier, and rose 3.4% sequentially from Rs 395.5 crore in the first quarter. Including other income of Rs 10.6 crore, total income was Rs 419.7 crore.

Why is the stock falling so hard?

The direct answer is costs rose faster than revenue. Expenses excluding finance costs, depreciation and amortisation increased 56.2% to Rs 395.2 crore, outpacing the 45% revenue growth. EBITDA fell 45% year-on-year to Rs 24.5 crore, even though it rose sequentially. Higher depreciation and finance costs then largely offset the operating improvement, BusinessLine reported.

The split between the two businesses explains the pressure. Aerospace, the larger business, grew strongly. Consumer manufacturing, the smaller business, grew revenue but lost more money as a slow volume ramp left new capacity under-absorbed.

MarketsMojo noted the stock's one-day fall of about 13.3% later in the session sharply underperformed its industrial manufacturing sector, which was down 0.37%, pointing to a company-specific reaction to the results rather than a broad market move. The Sensex and Nifty were near flat to modestly lower in early trade, weighed down mainly by information technology stocks.

The key facts, segment by segment

Aerospace: Revenue rose 44% year-on-year to Rs 351.4 crore, about 86% of the quarterly total. Segment EBITDA grew 24% to Rs 78.3 crore in the quarter. The aerospace order book rose 9% sequentially to $1.1 billion.

Consumer: Revenue rose 52% year-on-year to Rs 57.7 crore, but the segment's EBITDA loss widened to Rs 40.1 crore in the quarter, from Rs 36.1 crore in the first quarter, taking the first-half loss to Rs 76.3 crore.

New work: Aequs signed an agreement with Safran for A320 wheels, described as its first serial-production contract with a tenure exceeding 15 years, and expanded its relationships to six Safran entities after the quarter ended. It added 238 parts in the quarter, taking its aerospace portfolio to 5,978 stock-keeping units.

Investment: The promoter group recently infused Rs 650 crore by subscribing to preferential warrants to support capacity expansion, strategic joint-venture investments and working capital. First-half capital expenditure was Rs 159.7 crore, and the company is completing its Hosur manufacturing ecosystem alongside its Belagavi base.

What management said

Executive chairman and chief executive Aravind Melligeri said the consumer business saw a slowdown in its second-quarter volume ramp because of extended qualification timelines and supply-chain constraints. He described it as a timing-related shift rather than a change in the underlying opportunity, and said the company is recalibrating the path to consumer EBITDA breakeven, with a near-term focus on improving utilisation and turning installed capacity into profitable growth.

That distinction is the heart of the debate now surrounding the stock. If the consumer ramp is mainly delayed, the losses could narrow as volumes fill the capacity already built. If qualification and supply problems persist, the same cost base could keep weighing on results even while aerospace continues to grow.

What happens next?

Investors will be watching whether the consumer segment's loss stops widening, whether aerospace can sustain its order-book growth, and whether costs grow more slowly than revenue in the coming quarters. The $1.1 billion order book and the long-tenure Safran A320 wheels agreement give revenue visibility, but Tuesday's 19% fall shows the market wanted profitability to keep pace with sales — and in this quarter, it did not. This report describes what happened and why markets reacted; it is not a recommendation to buy, sell or hold any security.

Sources

The Hindu BusinessLine — stock market live updates, October 27
The Hindu BusinessLine — Aequs Q2 loss and $1.1 billion order book
Inc42 — Aequs Q2: loss widens 2.5x, revenue jumps 45%
MarketsMojo — Aequs sees sharp turnover amid steep price decline

FAQ

Why did Aequs shares fall 19%?

Shares fell 19% to Rs 196.50 in early trade on October 27 after Aequs reported a much wider year-on-year loss, as costs rose faster than its 45% revenue growth.

How much did Aequs lose in Q2 FY27?

Aequs reported a consolidated net loss of about Rs 52.4 crore, widening from Rs 20.6 crore a year earlier, while revenue rose to Rs 409.1 crore.

Which Aequs business is losing money?

The consumer business is the main drag: its revenue rose 52% to Rs 57.7 crore, but its EBITDA loss widened to Rs 40.1 crore as a slow volume ramp hurt cost absorption.

What is positive in Aequs's results?

Aerospace revenue rose 44% to Rs 351.4 crore, the order book reached $1.1 billion, and Aequs signed a Safran A320 wheels agreement described as its first serial-production contract lasting over 15 years.