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Shares of contract manufacturer Aequs surged as much as 12% to hit an all-time high of ₹271 apiece on the BSE after brokerage Nuvama Institutional Equities initiated coverage on the stock with a bullish outlook. 

The stock later pared gains amid profit booking and was trading 6.12% higher at ₹257.60 apiece at 11:57 IST. The company’s market capitalisation stood at ₹17,276.35 Cr (about $1.8 Bn) at the time.

Shares of Aequs have gained around 12% over the past two trading sessions and are up 87% year to date. 

The latest rally came after Nuvama initiated coverage on the aerospace contract manufacturer with a ‘Buy’ rating and a 12-month target price of ₹444, implying an upside of over 90% from July 6’s (Monday) closing price. 

The brokerage said Aequs deserves a valuation premium over pharma CDMOs because aircraft programmes have significantly longer lifecycles and, unlike pharmaceutical molecules, do not expire. It also described the company as a “sector outperformer”.

Nuvama said Aequs is India’s only vertically integrated aerospace SEZ, supplying machined aerostructures, landing gear and engine components to global OEMs, including Airbus, Boeing, Safran, Collins, and Bombardier. 

It added that the company is India’s first pure-play aerospace precision manufacturer, with a competitive advantage built over years of execution.

The brokerage said Aequs’ $889 Mn order book provides strong revenue visibility, and projected a 42% revenue CAGR and an 84% EBITDA CAGR between FY26 and FY29.

Nuvama also noted that Aequs’ consumer business remains loss-making, with profitability dependent on achieving scale rather than improving margins. While the plastics business may take longer to mature, it expects consumer electronics to grow faster than the company’s other segments. 

Even so, it cautioned that comparable global companies typically operate at EBITDA margins of 8% to 15%, below management’s guidance of 20%.

Nuvama also identified key risks, including extended raw material lead times, execution risks in the consumer segment, and the incomplete recovery in Boeing’s production.

On the expansion front, Aequs is investing in building an aerospace engine component ecosystem in India. Its Hosur facility is expected to be operational next year, with shipments likely to begin by 2028.

Earlier this year, the company signed MoUs worth ₹4,000 Cr with the Tamil Nadu government to set up a 250-acre aerospace and defence cluster in Krishnagiri. It also partnered with NMB-Minebea India for an additional ₹1,980 Cr investment in Tiruvallur. 

On the financial front, Aequs slipped into the red in Q4 FY26, reporting a net loss of ₹53.7 Cr as against a profit of ₹8.9 Cr in the year-ago quarter. Revenue, however, rose 47% YoY and 13% QoQ to ₹367.1 Cr, with strong growth in both aerospace and consumer electronics segments.

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