Defence Stock: How Will New Safran Deals Across Airbus and Boeing Programmes Affect This Company's Business Prospects?
The shares of this defence company, which mainly focuses on high-precision, high-complexity components and assemblies for global OEMs and Tier-1 suppliers, especially in civil aviation, were in focus after expanding its business with a global aerospace giant
With the market capitalization of Rs. 17,746 Crores, the shares of Aequs Ltd were trading at around Rs. 265 per share which is 10 percent discount from its 52 week high of Rs. 295 per share and has delivered an ROCE of 1.69% whereas ROE stands at negative 9.96%
Aequs Expands Its Partnership With Safran
Aequs has entered into new long-term contracts for the manufacture of aircraft parts with Safran, which is a global aerospace company. The contracts build on a relationship spanning more than a decade, extending Aequs' partnership from Safran Landing Systems to Safran Aerosystems and four other Safran businesses, bringing the total to six. This is a good move for Aequs in the aerospace value chain.
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Airbus and Boeing Programmes Add to the Contract Scope
These new deals are related to components for the Airbus A320, A330, A350, and Boeing 787 programs. These programs include the manufacturing of super alloy components, complex machining and coatings, and the assembly of landing gear components. Getting involved in these programs broadens the scope of applications in aircraft that are catered to by Aequs. However, the company has not revealed the financial details of these contracts.
Expansion of Aerospace Manufacturing Capabilities
Aequs will leverage its integrated manufacturing facilities for forging, precision machining, coating, surface treatment, and assembly to manufacture parts for Airbus A320, A330, A350, and Boeing 787 programs. The new Aequs Engine Components Ecosystem facility coming up in Hosur, Tamil Nadu, will enable the company to increase its manufacturing capacity for medium- and large-engine components, in addition to the Belagavi Aerospace Cluster.
Earlier Aircraft Wheel Agreement Strengthens the Relationship
The most recent development comes on the back of a different contract signed by Aequs with Safran Landing Systems in July 2026 for the manufacture of fully assembled wheels for the Airbus A320 series aircrafts. This particular contract will be in effect until 2042 and includes the manufacture of the wheels in India starting from procurement of aluminum to testing of the assembled parts.
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What Could the New Agreements Mean for Aequs Business?
The new contracts can improve Aequs' position in the aerospace manufacturing industry by expanding customer reach, broadening its product portfolio, and increasing involvement in large aircraft programs. The long-term contracts can also create a basis for sustained business operations depending on the production schedule and customers' needs.
It is difficult to determine the financial effects because Aequs has not yet disclosed the contract value, delivery timeline, or impact on revenue and profit. Investors will have to monitor all these aspects in addition to the implementation of the agreement and construction of manufacturing plants.
About the company and financials
Aequs Limited claims to be the first engineering-driven vertical integration of precision manufacturers within a single Special Economic Zone (SEZ). It runs in 2 segments namely Aerospace and Consumer, over 2.22 million sq. ft. in its manufacturing facilities. In its infrastructure, it has 5,740 aerospace products, 438 CNC machines, 179 molding machines, and an annual capacity of 4.78 million machining and molding hours due to 3,315 employees.
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The company has an average of 15 years of relation with its top 3 clients, has achieved 100% in country value addition for some products and has been conferred with the Detailed Parts Award (D2P) by Airbus 6 times from 2016 to 2023. Financially, it has revenue of ₹395.5 Crores and EBITDA of ₹21.5 Crores for Q1 FY27, resulting in 5% EBITDA margin.