Red Sea crisis dents Aeroflex Industries' Q3 revenue
Asad Daud, Managing Director said the stainless steel flexible hoses and assemblies manufacturer said there has been some impact on revenue due to the Red Sea tensions, and more impact is likely in the fourth quarter as well.
Asad Daud, Managing Director of Aeroflex Industries said the Red Sea crisis has impacted revenue for the quarter by around 15% and some more impact is anticipated in the fourth quarter as well.
Daud said the crisis has also affected the working capital cycle. However, the company has tried to counter that by reducing the raw material inventory. "Last year, almost 95% of our stainless steel coil was being imported, but now in this nine months, less than 50% of our coil is imported. So overall our inventory has not grown by that much," he noted.
The Mumbai-headquartered company, which manufactures stainless steel flexible hoses and assemblies, reported 13% year-on-year (YoY) rise in total income for the third quarter to ₹74.32 crore. EBITDA (earnings before interest, tax, depreciation, and amortisation) stood at ₹15 crore, up 63% YoY. Net profit jumped over 75% YoY to ₹9.04 crore. EBITDA margin was at 20.19%, up from 13.94% in the same quarter last year.
Daud expects revenues to grow by 20-25% annually for the next four years with margins gradually inching up to 24-25%.
He also discussed about a new product for electric vehicles (EVs) that the company is currently working on. Daud said the product will focus on safety aspects related to fire in EVs. "This product is in the developmental phase, and we expect sales to commence in the next financial year (FY25)," he added.
With the ongoing capacity expansion, the company's capacity is expected to reach 13.5 million meters by the end of FY24 and 16 million metres per annum in FY25.
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The company's shares were listed on bourses on August 22, 2023, at ₹190 apiece, an 83% premium over the IPO price of ₹108. The shares are down around 6% so far since listing. The company has a market capitalisation of ₹1,997.35 crore.
Some key local competitors of the company include JSW Infra, Kaynes Technologies, and Cello World.
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(Edited by : Shweta Mungre)
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