MTAR Technologies and Aeroflex Industries both delivered explosive growth in Q2 FY27, but the drivers and risks differ sharply.
Net profit jumped 14-fold at MTAR to ₹59.8 crore and 157% at Aeroflex to ₹36.6 crore. Investor Presentation +2
The numbers are impressive, but several premises in the market narrative don't match the filings. There's no evidence of a "15-year partnership" with Bloom Energy. The 67.2% figure refers to the Clean Energy sector's share of MTAR's order book, not Bloom specifically. Aeroflex's "exclusive" agreement applies only to India, not globally. And the FY29 revenue projection for MTAR's data centre vertical isn't in the sources I found.
MTAR's total order book stood at ₹5,976.5 crore at September 30, 2026, with ₹1,207.2 crore of Q2 inflows. The Clean Energy segment (fuel cells, hydel and others) accounts for 67.2% of this book. That's where Bloom Energy's hot box assemblies sit, but the company doesn't disclose Bloom's exact share. Management says MTAR holds "a majority of the share" of Bloom's demand, with only one South Korean competitor. Investor Presentation +3
The concentration risk is real. The FY25 annual report states that most revenue has historically come from a few customers, and losing a significant one could hurt cash flows. One unnamed customer exceeded 10% of revenue in both FY24 and FY25. Annual Report +1
Aeroflex's concentration is more transparent but equally concentrated. The liquid cooling skid business, tied to a single US-based data centre infrastructure leader, exceeds 30% of revenue. Management has an exclusive contract for skid assemblies in India, with spare capacity available for international sales. The exact customer share isn't disclosed, but skids were 24% of H1 FY27 revenue. Transcript +3
MTAR received ₹45 crore of first-article orders from SLB for sheet metal components and assemblies for data centre infrastructure. First-article execution is in progress, and larger orders are expected after qualification. An analyst framed the customer's comments as an "8x requirement," implying ₹350–400 crore of future inflows. Management expects the vertical to scale to ₹350–450 crore over the next two years, but I found no FY29 date in the sources. Investor Presentation +2
Aeroflex's liquid cooling story is already contributing. Skid sales were ₹50.03 crore in Q2 FY27 on 1,475 units, up from ₹32.39 crore on 1,040 units in Q1. The company has a long-term agreement with the US customer and made its first commercial dispatch under it. However, design approvals and quality audits have slowed deliveries, and the Q3 ramp depends on external machinery suppliers. Investor Presentation +4
MTAR's EBITDA margin nearly doubled from 12.5% to 24.4%. The main driver was operating leverage. Employee costs fell to 12.2% of revenue from 24.6% a year earlier, while other expenses dropped to 10.2% from 14.1%. Fixed costs spread over a much larger revenue base. Gross margin actually declined slightly to 46.8% from 51.2%, so product mix wasn't the primary factor. Investor Presentation +1
Aeroflex's EBITDA margin expanded 93 basis points to 24.3%, with EBITDA up 94.5% to ₹50.34 crore. The company attributes this to higher contribution from value-added products and improved operating leverage. My calculations show employee costs fell about 107 basis points as a share of revenue, while other expenses dropped 72 basis points, offsetting a roughly 87-basis-point increase in material costs. Investor Presentation +2
MTAR's working capital days collapsed from 172 in March 2026 to 50 in September 2026. Management credits better margins, tighter working capital management and customer advances. H1 FY27 operating cash flow surged to ₹350 crore from ₹39.8 crore a year earlier, with working capital changes contributing ₹195 crore. Investor Presentation +3
This working capital improvement didn't cause the profit jump directly—it freed up cash. Net debt stands at roughly ₹107 crore. Management expects working capital days to rise to about 100 by FY27 year-end and around 150 over the long term. Transcript +2
Aeroflex's operating cash flow was ₹38.16 crore in H1 FY27 against ₹27.25 crore in H1 FY26. The increase lagged profit growth because higher working capital investment and tax payments absorbed cash. Management said receivables grew more slowly than sales and receivable days fell. Investor Presentation +1
MTAR's total planned capex is about ₹500 crore, with roughly ₹350 crore (70%) for the fuel cell business and ₹150 crore for other verticals. About ₹100 crore was spent in FY26, so FY27 spend is around ₹400 crore. Funding is 75% debt and 25% internal accruals. Transcript +1
Phase 2 fuel cell capacity is expected operational by end-November 2026. Phase 3, which will multiply capacity, is due by June 2028. The dedicated data centre facility is expected fully operational by end-March 2027. Management declined to give unit numbers for Bloom demand, saying capacity is being built to cover customer requirements. Transcript +2
Aeroflex is investing ₹202 crore to expand capacity. SS hose and braiding capacity will rise from 2 crore to 3 crore metres per annum by March 2028, while liquid cooling skid capacity will increase from 12,000 pieces currently to 30,000 by March 2028. The expansion is expected to add ₹500–550 crore of revenue at peak utilisation. Management targets revenue close to ₹1,500 crore by FY30 with margins around 25%. Transcript +3
MTAR's ROCE declined from 24.1% in FY23 to 17.2% in FY26, while ROE fell from 18.1% to 12.1%. The drop was driven by lower margins and investments in Aerospace and Clean Energy before those projects ramped up. Management expects ROCE to rebound to about 23% by end-FY27. Investor Presentation +5
Aeroflex's ROCE fell from 37.0% in FY23 to 20.4% in FY26, then recovered to 34.4% in H1 FY27. ROE followed a similar pattern, dropping to 14.1% in FY26 before rebounding to 23.4% in H1 FY27. The presentation attributes the decline to capital deployment ahead of returns. Investor Presentation +5
On valuation, MTAR trades at a current P/E of about 132x, while Aeroflex is at 80x. I couldn't verify the 75.6x, 50.6x or 104x multiples mentioned in the queries. Aeroflex's industry median P/E in my data is 19.1x, far below the cited figures, suggesting different peer sets or timeframes. Other
Both companies face execution risks from heavy capex deployment. MTAR's debt-heavy funding comes on top of existing net debt, and working capital days are expected to rise. The Bloom Energy link is a single-customer dependence in a rapidly evolving technology landscape. The data centre vertical depends on SLB qualification and facility ramp-up.
Aeroflex's liquid cooling business is tied to one customer for the domestic market. Design approvals, quality audits and machinery supplier delays have already slowed deliveries. Management guided that scale benefits would be offset by pricing pressure. The company also faces trade policy and FX volatility risks on its export business, which was 69% of revenue in FY26. Transcript +2
The growth stories are compelling, but the concentration risks and execution challenges mean these aren't simple bets on secular trends. The devil is in the details—and those details matter.
