Aeroflex Industries stock jumps 13% after announcing huge capex

Synopsis: This small-cap metal company jumped 13% after unveiling a growth-focused capex plan aimed at strengthening its presence in future-ready applications. The company will expand capacity in liquid cooling skids for data centres, a fast-growing global segment. The Rs 97.56 crore investment reflects a measured push towards higher-value products while maintaining capital discipline.

The shares of this company, which manufactures and supplies environment-friendly metallic flexible flow solution products, had its shares in momentum after the company announced capex through the issue of preferential shares, which will be used in liquid cooling skids and robotic welding lines. 

With the market cap of Rs 2,560 crore, the shares of Aeroflex Industries Ltd had hit their intraday high at Rs 200, gaining about 13 per cent compared to their previous day’s closing price of Rs 177.05. The shares are trading at a PE of 52.9, whereas their industry PE is at 20.6. 

About the Capex and preferential issue

Aeroflex Industries has laid out a Rs 97.56 crore investment plan that clearly signals where the company wants to head next. A big part of this capex is aimed at liquid cooling skids for data centres, an area seeing strong global demand. Capacity here will jump from 2,000 units to 15,000 units per year by June 2026, positioning Aeroflex to tap into the fast-growing data centre and digital infrastructure space without straying from its core engineering strengths.

At the same time, the company is upgrading its manufacturing backbone. Investments in robotic welding lines, automatic welding stations, and an annealing plant, expected to be ready by December 2026, are designed to make production more efficient and consistent. While these additions won’t increase overall capacity, they should help improve quality, reduce manual dependence, and support more mission-critical and higher-value products.

Funding for this expansion has been planned carefully. The company will use Rs 42.56 crore from internal accruals and raise Rs 55 crore through a preferential equity issue, avoiding the need to take on heavy debt. This balanced approach suggests management is keen to grow without putting pressure on the balance sheet.

Under the preferential issue, 30.10 lakh shares will be issued at Rs 182.70 each to six non-promoter investors, subject to shareholder approval at the EOGM on January 15, 2026. Overall, the plan reflects a measured strategy by investing in future-ready products, strengthening operations, and keeping capital discipline firmly in place.

Financials and more

The revenue from operations for the company stands at Rs 111 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 95 crores, up by about 17 per cent YoY. However, the net profit stood the same at Rs 14 crore in Q2 FY26 and Q2 FY25.

Aeroflex Industries Limited is a certified manufacturer of flexible flow solutions, specialising in stainless steel corrugated hoses and assemblies. The company operates from an ultramodern facility in Taloja, Navi Mumbai, where production is carried out under the supervision of an experienced technical team. Its focus on precision engineering and controlled manufacturing processes has helped Aeroflex establish itself as a reliable supplier in both domestic and international markets.

The company leverages advanced manufacturing technology and continuous improvement practices to deliver products that meet strict customer and international quality standards. Aeroflex manufactures a full range of metallic flexible hoses using AISI 304, 321, 316, and 316L stainless steel grades, conforming to BS 6501 standards. Its ability to customise solutions, adhere to delivery timelines, and maintain consistent quality has been central to building long-term customer relationships across industries.

Written by Leon Mendonca

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