Defence Stock Jumps 12% on Fresh ‘Buy’ Call With 83% Upside from Nuvama

Synopsis: Nuvama initiated coverage on Aequs with a Buy rating and a Rs. 444 target price, implying 82.90% upside, backed by a strong order book and growth outlook.

This Large-Cap Stock, engaged in precision manufacturing of aerospace components, consumer durable products, toys, and engineered solutions, serving global customers across multiple industries, jumped 11.64 percent after Nuvama gave a buy target of Rs. 444, which has an upside potential of 82.90 percent.

With a market capitalization of Rs. 17,296.47 crores, the share of Aequs Limited has reached an intraday high of Rs. 271 per equity share, rising nearly 11.64 percent from its previous day’s close price of Rs. 242.75. Since then, the stock has retreated and is currently trading at Rs. 257.90 per equity share. 

Reason Behind the Surge:

Nuvama, a prominent brokerage firm, has recommended a “Buy” call on Aequs Limited with a target price of Rs. 444 per share, indicating an upside potential of 82.90 percent from its previous day’s close price of Rs. 242.75 per share. 

Nuvama has initiated coverage on Aequs with a Buy rating, supported by the company’s strong growth outlook. Aequs has an order book of US$889 million, which provides good revenue visibility for the coming years. Nuvama expects the company to deliver a 42 percent sales CAGR and an 84 percent EBITDA CAGR during FY26-FY29. The aerospace business remains the key growth driver, while the consumer electronics segment is expected to reach EBITDA break-even, further improving overall profitability.

The brokerage believes Aequs is well-positioned because of its strong manufacturing capabilities, long-term customer programmes, and growing presence in high-value industries. The combination of a large order book, improving margins, and rapid earnings growth supports its positive outlook. As profitability improves and execution remains strong, Nuvama expects the company to create significant value for shareholders over the next few years.

Management Guidance:

Aequs Limited has shared its Vision 2031, aiming to become a leading diversified precision manufacturing company by strengthening its manufacturing ecosystem and expanding across key business segments. The company targets 4x to 6x revenue growth, an EBITDA margin of 18 percent to 22 percent, and a 20 percent return on capital employed (ROCE). It also plans to invest $350–450 million in capital expenditure to support future growth.

The company expects strong growth from its aerospace and consumer businesses. In aerospace, it aims to increase revenue by 4x to 5x while maintaining healthy profitability. In the consumer segment, it targets 10x to 18x revenue growth, supported by better operating efficiency and improved margins. Aequs also plans to strengthen its manufacturing ecosystem by increasing cluster value addition to over 50 percent.

As part of its roadmap, Aequs expects the consumer business to achieve EBITDA breakeven by Q4 FY27, while the consolidated business is expected to reach PAT breakeven in H1 FY28. Revenue from the Hosur aerospace project is expected to begin in FY29, followed by consumer PAT breakeven in the same year. By FY30, the company aims to achieve its targeted 20 percent consolidated ROCE, reflecting its focus on sustainable and profitable long-term growth.

Company Overview:

Aequs Limited is an Indian precision manufacturing company that provides vertically integrated contract manufacturing solutions, with a strong focus on aerospace and a growing presence in consumer products. Headquartered in Belagavi, Karnataka, the company serves global original equipment manufacturers (OEMs) through manufacturing operations in India, France, and the United States.

Recent Quarter Results:

Coming into financial highlights, Aequs Limited’s revenue has increased from Rs. 249 crore in Q4 FY25 to Rs. 367 crore in Q4 FY26, which has grown by 47.39 percent. The company’s net profit has shifted from positive to negative, from a net profit of Rs. 9 crore in Q4 FY25 to a net loss of Rs. 54 crore in Q4 FY26.

Aequs Limited’s revenue has grown at a CAGR of 15 percent over the last three years. In terms of return ratios, the company’s ROCE and ROE stand at 1.55 percent and -9.99 percent, respectively. Aequs Limited has an earnings per share (EPS) of Rs. -1.69, and its debt-to-equity ratio is 0.47x.

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