Expect sales to rise 25% in FY24 to nearly Rs 1,200 crore, says Aequs

Aequs, an aircraft component manufacturer, anticipates a 25 per cent increase in sales to about Rs 1,200 crore in 2023-24 (FY24) as the demand has bounced back after the Covid-19 pandemic, according to Chairman and Chief Executive Officer Aravind Melligeri.

Each aircraft consists of 250,000-300,000 parts, and Aequs manufactures 1,500-2,000 unique aircraft parts at its facility in Belagavi, Karnataka.

The company supplies components for landing gear, engines, fuselage, and wings to top aerospace companies such as Airbus, Boeing, Safran, and Collins Aerospace.

“We manufacture overwing emergency exit doors and door plugs for Airbus A321 at our facility in India,” Melligeri told Business Standard during an interview.

“The company is targeting revenue of Rs 1,200-1,300 crore for FY24. In the last financial year, we earned just under Rs 1,000 crore. A 20-25 per cent growth is something we naturally anticipate,” he mentioned.

Aequs’ capacity utilisation dropped from 80 per cent before the pandemic to about 35 per cent during the pandemic.

Once the company reaches an 80 per cent utilisation level, it will start adding fresh capacity.

He said that the company has not added any capacity in the past four years as demand decreased during the pandemic. Currently, it has 1.2 million hours of annual machine capacity.

“Generally, we plan to add 100,000-200,000 hours of annual machine capacity. Our revenue growth is directly proportional to the machine capacity added,” he said. This means that the company will have an annual machine capacity of 2 million hours in the next five years.

This addition will be implemented in the company’s aerospace special economic zone in Belagavi.

Melligeri mentioned that one challenge aircraft component makers are facing is the delay in the supply of raw materials such as specialty steel. He stated that before the pandemic, specialty steel was readily available, but now the order has to be placed about 70 weeks before delivery.

He said that the company’s local value addition currently stands at about 50-60 per cent. In 2007, the local value addition was just 20 per cent.

“Most of the raw material comes as an import. We are trying to replace that with domestic supply,” he observed.