Aequs Shares Drop 19% Following Wider Q2 Loss

Aequs shares plunged 19% after the aerospace components manufacturer reported a consolidated net loss of 52.3 crore rupees for the second quarter of fiscal year 27, compared to a loss of 20.59 crore rupees in the same period last year. Revenue from operations rose 45.3% year-on-year to 409.1 crore rupees, but a steep drop in operating earnings pushed down the bottom line.

Financial Breakdown

Earnings before interest, taxes, depreciation, and amortization fell 45% to 24.5 crore rupees. For the first half of the fiscal year, revenue grew 50% to 804.6 crore rupees. When including joint ventures, second-quarter revenue reached 448 crore rupees while EBITDA dropped 36% to 33.1 crore rupees. The aerospace segment remained a strong anchor, with second-quarter revenue rising 44% to 351.4 crore rupees and EBITDA increasing 24% to 78.3 crore rupees. The aerospace order book reached 1.1 billion dollars, alongside a new 15-year serial-production contract with Safran to manufacture wheels for A320 aircraft. Meanwhile, the consumer business saw revenue jump 52% to 57.7 crore rupees, but its EBITDA loss widened to 40.1 crore rupees from 36.1 crore rupees in the June quarter.

Market Response

Aequs announced that its promoter group will invest 650 crore rupees through preferential warrants to fund capacity expansion and working capital. Nuvama Institutional Equities kept a 'Buy' rating and a target price of 444 rupees, pointing to aerospace strength and the planned promoter investment. On the other hand, Gaurav Arora, Head of Research at SAHI, noted the stock formed a bull-trap pattern and identified 204 rupees as immediate support. Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, added that the stock saw sharp profit-booking and placed immediate support around 205 rupees.

Context

Corporate earnings reports often trigger sharp stock price movements when rising revenues are overshadowed by growing segment losses or falling operating margins. Manufacturing firms expanding into new components often face initial cost pressures in secondary business units even as their core segments grow.