Aequs Share Price: Defence stock crashes 19% to 4-month low after Q2 loss widens; Nuvama sees 110% upside - Check target price

Aequs Share Price: Shares of Aequs, a defence company, plunged nearly 19 per cent on Tuesday, October 27, hitting their lowest level in over four months after the company's consolidated loss widened in the quarter ended September 30, despite a 45 per cent year-on-year increase in revenue.

As of 9:40 am, the stock was trading at Rs 211.30, down 12.9 per cent or Rs 31.30. Earlier in the session, Aequs shares fell to Rs 196.50, marking a decline of 18.93 per cent from the previous close of Rs 242.40. The intraday low for the stock reflects its lowest level since June 19.

The company's EBITDA declined 51.7 per cent year-on-year to Rs 14 crore from Rs 29 crore. EBITDA margin contracted to 3.37 per cent from 10 per cent in the year-ago quarter.

For the first half of FY27, consolidated revenue grew 50 per cent year-on-year to Rs 804.6 crore, driven by growth in the aerospace and consumer businesses.

Including proportionate contributions from joint ventures (JVs), revenue for the second quarter stood at Rs 448 crore, up 44 per cent year-on-year and 4 per cent sequentially. EBITDA, including JV contributions, declined 36 per cent year-on-year to Rs 33.1 crore, although it increased 8 per cent quarter-on-quarter.

The company's aerospace order book increased 9 per cent quarter-on-quarter to USD 1.096 billion. Aequs also secured a 15-year contract with Safran for A320 wheels.

The company approved a Rs 650 crore promoter-group investment through preferential warrants to fund capacity expansion, joint ventures, working capital and the Hosur aerospace ecosystem.

Nuvama has maintained its 'BUY' rating on Aequs and retained its discounted cash flow (DCF)-based share price target of Rs 444. At the current market price of Rs 211.30, the brokerage's target implies an upside potential of 110.13 per cent.

Nuvama highlighted Aequs' aerospace business, which reported an EBITDA margin of 22 per cent and an order book of USD 1.1 billion. The company is expanding beyond aerostructures into engine and landing gear components at Hosur.

However, the brokerage flagged concerns over the consumer business, where losses have widened. Aequs has withdrawn its consumer EBITDA breakeven target without providing a revised timeline.

Nuvama also pointed to the Rs 650 crore promoter-group investment through warrants as part of its assessment of the company.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)