Aeroflex Industries Ltd (NSE: AEROFLEX) Q4 2025 Earnings Call dated May. 02, 2025
Corporate Participants:
Unidentified Speaker
Asad Daud — Managing Director and Chairman
Analysts:
Unidentified Participant
Raman KV — Analyst
Aman Agrawal — Analyst
Mahesh Bendre — Analyst
Prem Luniya — Analyst
Pritesh Chheda — Analyst
Karan Mehta — Analyst
Rajesh Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Aeroflex Industries Limited Q4 and FY25 earnings conference call. As a reminder, all participant lines will be in the listenerly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mishnasad Dawood, Managing Director, Aeroflex Industries Ltd. Thank you. And over to you, sir.
Asad Daud — Managing Director and Chairman
Thank you so much. Good morning to everyone. I welcome you all to the quarter four and financial year ended 31 March 2025 earnings call of Aeroflex Industries Limited joining me today are members of our senior management team and the representatives from Strategic Growth Advisors sga, our investor relation partner. I trust you have had the opportunity to review our financial results and the investor presentation which are available both on the stock exchanges website and also on our company website.
Despite the global economic headwinds including the tariff challenges and the macroeconomic uncertainties, I’m pleased to report that Aeroplane Industries has delivered a strong performance in FY25 and has continued to generate immense value for its shareholders.
Throughout the year we have remained focused on strategic initiatives aimed at strengthening our core business and enhancing our growth trajectory. We have considerably expanded our production capacity and have also made meaningful progress in transitioning towards value added and high margin products. This strategic decision is also reflected in our improved EBITDA margins and also in our profitability. We have also deepened our engagement across both the domestic and the international customers segment, aligning closely with the market realities to capture the growth opportunities across both high potential as well as stable demand segments. Now I’ll just give you a brief about the key milestones achieved during the quarter which is Q4 and also for the year.
The planned capacity expansion that we had planned for the last financial year which is FY25, was completed seamlessly and fully integrated with our existing operations and executed ahead of the schedule and also below the originally budgeted capex. Our high value added assembly segment now contributes more than 50% of the total sales which exceeds our internal full year target well in advance. We delivered strong financial outcomes with both our EBITDA and our net profit growing by over 25% year on year. This is due to our increased focus on operational efficiency and also on the value added product mix.
The growth is driven by a transition from a single location manufacturing base last year to a multi location manufacturing facilities spread across three manufacturing units in Navi, Mumbai and Pune. I’m happy to share that we are collaborating with a multi billion dollar global company which is headquartered in the USA for providing flow solutions for liquid based cooling for AI data centers. This project will be implemented at our Bellows plant and this marks a significant step in our growth journey to manufacture new age products. We have also started to see the initial business coming in from the Bellows segment and the miniature metal Bellows expansion is progressing as planned.
After the acquisition of Hideair Engineering, FY25 was the year of transformation for Hydair. We’ve installed the latest technology CNC machines, set up a world class quality control lab and have also upgraded our infrastructure to meet the needs of our customers. We expect robust growth in Hydair in the upcoming years. From an end user perspective, we are witnessing healthy and sustained demand across the key sectors which includes energy, oil and gas, chemicals, metals, railways and other new age sectors. Encouragingly, despite the global discourse regarding the tariffs and shifting trade dynamics, our operations and order pipeline have largely been unaffected.
In fact, we believe that the evolving global trade environment may prove beneficial to the Indian manufacturers over the medium to long term despite some short term uncertainties. Thereby, it will help to position us well to capture the additional market share in the global markets over the long term. Now Talking about our Q4, Q4 and FY25 performance which reflects strong operations stability and higher margins, our total income stood at approximately 92 crores for the fourth quarter reflecting a 16% growth on a year on year basis. Our EBITDA stood at around 19 crores with an EBITDA margin of 20.71%.
Profit after tax stood at around 11 crores which is a growth of 12% on a year on year basis and the pat margins was about 12 and a half 12.23%. Our total income stood at 379 crores and 18% growth on a year on year basis. Our EBITDA for the entire year stood at 82 crores which is a growth of 24% on a year on year basis and with an EBITDA margin of 21.5%. Our profit after tax stood at 52 crores showing a 22 which is a 26% increase on a year on year basis and the pat margins are almost are at almost 14%.
I’m also happy to share that the board of Directors have recommended a final dividend of 15% that is 0.3 rupees per equity share. Our capacity utilization for FY25 stood at around 75%. Our return on capital employed was about 24% and the return on equity is about 16.5% and we continue to remain a debt free company and we remain focused on effectively utilizing our working capital. Now as we look ahead to the current financial year which is FY26, we remain confident that a long term strategy is bound to succeed over the next few years. Our strategic focus continues to be on high margin and value added products, particularly in the assemblies and now the metal bellows division which we expect to be the key growth drivers for the company for the next few years.
We are also entering into new applications and exploring strategic partnerships globally aligning with the evolving needs of the industry. Our teams are also diligently working to strengthen Aeroflex’s presence both in the domestic and also in the international market. Our capacity expansion efforts are progressing as per plan and it is in line with our business plan. We have a compelling long term growth story with our EBITDA and profit margin enhancement remains to be the core focus of the company. We are also actively exploring both organic and organic opportunities that come by both in the India market as well as in the international market.
For FR26 our focus remains on delivering profitable growth for the company led by operational efficiencies and also a greater mix of higher value added products and also benefits from the higher capacities. We expect this combination to translate into higher EBITDA and profitability for the company and long term value creation for our stakeholders. In terms of digitalization, I would also like to share that last month I did a course from Howard Business School on how to implement digitalization and usage of AI tools in manufacturing businesses and our aim in the future is to become a digitally dexterous organization.
With this I would like to conclude my speech and open the floor for Q and A. Thank you so much everyone.
Questions and Answers:
operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Raman KV from Sequen Investments. Please go ahead.
Raman KV
Hello sir, can you hear me?
Asad Daud
Yes I can hear you sir.
Raman KV
Congratulations on such a good result. I have few questions. First is pertaining to the 400 crores of fundraise which you approved. Can you elaborate on the plans of like what are the plans with respect to the fundraise.
Asad Daud
Yes. So we have obtained the approval from the shareholders in the last quarter. The process, the QIP documentation is still under process and we expect that to come up with this claim in the next few quarters. So obviously we’ll not be able to give a specific timeline for the same, but we are working on it and we’ll, we’ll inform to all our shareholders and investors as soon as the process is completed.
Raman KV
So this is for the inorganic accusation of the of some company because from what I understand is the CAPEX is internal accrual.
Asad Daud
Yes. So most of the proceeds of the, of the QRP will be used for, for inorganic acquisitions and a small part of it would be used for working the capital.
Raman KV
Okay, so, so second part is as of now, with respect to the flexible hoses, the capacity is 16.5 and you said 75% is the utilization. So by my understanding is it will be soon in by FY26N this will be 90 utilization and then the additional 3.5 million meters of the capacity will come and by the end of 27 the entire 20 million metric meters of capacity will be utilized, right?
Asad Daud
Yes. So the 16 million capacity was commissioned at the end of Q3. So obviously that has not yet been utilized on, you know, fully. And, and you’re right that our plan is to utilize the 16 million capacity in this financial year. And also with that we are expanding from 16 and a half million to about 20 million.
Raman KV
And my final question is with respect to the metal bolos and miniature metal bolos, so we commenced the 1.2 lakh pieces per annum in end of Q3. So can you give us the revenue from metal bolos in Q4?
Asad Daud
Yeah, so the, the metal bellows project started in Q4 in the sense the production started in Q4. The total capacity in phase one is one 20,000 pieces per annum, which is about 10,000 pieces a month so far. Obviously the revenue that has come in is close to about one and a half crores in the last financial year. We have started to receive a lot of inquiries from. So we started to generate sales from the domestic market already. We have also started to receive bulk inquiries from the domestic market. We are also seeing in terms of our international customers, the product is under testing at a lot of our customers end.
Also, as I mentioned earlier that this product requires a lot of certification. So our products are already under certifications. Some of the certifications we have received the, some of the other certifications are still pending. So as compared to a hold the Sales cycle for a metal bellows is slightly longer. So hence we started to see the traction coming in. And I think over the next few quarters, especially specifically I would say Q2 and then the H2, I think we’ll see the numbers of the metal bellows project, the numbers on the sales of metal bellows jump up.
Raman KV
So my, I just wanted to know what will be the incremental revenue from, you know, the metal bellows and miniature metal bellows once it’s like fully integrated into the company.
Asad Daud
So at full capacity, the metal bellows project would be having a top line of about 85 to 90 crores at peak utilization. And the miniature metal bellows would have a top line of about 25 to 30 crores at peak utilization. That’s the potential, the revenue potential.
Raman KV
So can we expect this in like 27 or the full year full utilization? Because I think by the end of 26, all the lines will be completed.
Asad Daud
Yeah. So I think for the metal bellows, you know, we can expect that by 27 we will reach an optimum utilization. And I think miniature metal bellows are. Our project would be commissioned in, you know, by March of 26. So the, the optimum utilization for that particular, you know, project would. May happen in FY28, because FY27 would be the first year of, you know, of operations of that particular plant of that particular project.
Raman KV
Okay, so one final question. So what is the guidance for FY26 in terms of growth and EBITDA?
Asad Daud
Yeah, so we, we expect over the past, you know, also in the last financial, which is FY25, we had, you know, we had the given guidance of that our growth in terms of profitability would be more than 25. And we have already achieved that in terms of growth. And for the financial year FY 2026, also, uh, our, our focus remains on increasing the profit that the growth in our profitability in terms of EBITDA would be close to 25% with at least a 100 basis point increase in the margin.
Raman KV
And revenue, sir, revenue can. Will it grow by 25% or will it grow more?
Asad Daud
So our focus, you know, as I said, our focus remains on increasing the bottom line. Obviously the increase in the bottom line will be, you know, would also be as a result of increasing the top line. But obviously our top line depends on a lot of factors which includes some geopolitical situation which is happening. Plus these tariffs will not be able to give a specific guidance on the, on the top line. But our aim is that on the bottom line we expect at least 20 to 25% minimum growth for the next financial year. Sorry. For the current financial year.
Raman KV
Okay, thank you sir.
operator
Thank you. The next question is from the line of Aman Agrawal from Carnegie and Capital. Please go ahead sir.
Aman Agrawal
Thank you for the opportunity and congrats on a good set of numbers. My first question was on the US tariff risk. Right. The tariff which US has implemented. So what has been our discussions with customers and like what kind of potential impact we see from this tariff? If you can clarify a bit on that.
Asad Daud
Yeah, so thank you Aman. So in terms of tariffs, so obviously as we all are aware There is a 90 day pause on the tariff but the tariffs on our products earlier was around 3 and a half percent which is now increased to 10% not accounting for the additional tariff which on which there is a pause. So tariffs have increased in the US So in terms of some of the customers, some of the customers have, some of the customers are taking it slope. Some of the customers are just taking it as they go along. We have not seen a major shift in, you know, in the orders I’m talking about specifically from the US market.
But I think in the long term, I think, I think the government of India is also working on some policies and some trade agreements with the US So I feel as I also mentioned in my speech there might be short term pain but I think over the course of the entire year I think we’ll see a much better opportunity for Indian manufacturers who are exporting to the US because I think the demand for Indian products is going to increase. So there might be some short-term pain but I think in the medium to long term I think definitely there’ll be much, much bigger business opportunities that we have.
Aman Agrawal
Right, thanks for that answer sir. But if I see America numbers for FY25, right. So there’s a decline in the overall numbers for sales to America like compared to almost 163 crores kind of sales last year. We have done 156 crores this year. So like our customers delaying orders, like are they waiting and like are we seeing a longer lead time in conversion of orders? Like is there any something like that?
Asad Daud
Yeah, so one thing what happened last year we did not see. So our order book is quite strong for America. The one thing that happened is because of the longer delays or the delays in the shipping, that’s why the transit time has increased in terms of the flow from India because instead of the Suez Canal the lines are using so you know all our shipments to the you know, which are crossing the Atlantic, all of them are delayed. And hence also I think in the month of February and March, when this entire tariff situation was happening, right.
So some of the customers requested to delay the shipments and hence that was the reason you could see. But all those shipments have already gone in the month of April and some are planned to go in the month of May also. So we don’t see much of this getting affected. And like I said, there might be a pain for a month or two. But I think overall from the way we have spoken to our customers and we have also started to get bigger inquiries of certain sizes of products which we were not getting earlier. So we expect that the demand from the US is actually going to increase over the next couple of quarters.
Aman Agrawal
Okay, thank you, sir. That was very elaborate and helpful. Just one more clarification on exports versus domestic sales. Like for the CEO, if I see your export sales have grown very minuscule, right. While in case of domestic, we have seen a massive growth during this year. So like how do you see. And Besides this for FY26, like will domestic continue to lead growth for us or like will exports revive? Like even the macros which are currently. How do you see exports basically panning out for FY26?
Asad Daud
Yeah, so definitely our domestic sales has increased at a much, much faster pace as compared to our export sales. That doesn’t mean that our export sales have not increased, but obviously our domestic sales has increased at a much bigger pace. Yes, you know, we have got a lot of orders from, you know, project or orders in the domestic market. We have also tapped into new segments in the domestic market where we are buying our products at, you know, at the ports and also for certain irrigation applications where our products are being used. We are also seeing a higher demand in the domestic segment from the traditional industries, which includes the oil and gas, petrochemical and steel.
So definitely domestic market has picked up much, much better in the last financial year or has shown a lot better growth in the last financial year compared to the export market. Also, just to add also there’s one thing which also helps us in the domestic market is although in terms of margins, I would say yes, export is slightly better. But what helps in the domestic market is our inventory cycle shortens, our credit period shortens. So overall working capital of the company becomes better when we’re supplying in the domestic market. So yeah, I would just wanted to add that.
Aman Agrawal
In terms of exports, what kind of growth you might be expecting for next year, given the order book we have can we do double digit kind of growth in exports or like high double digits. Like any indication on that right now for FY26?
Asad Daud
Yeah. So definitely the internal target that we have towards our team is, is an extreme high growth, but we can expect that. So we are also expecting to see how Europe reacts to it and the demand from the European market, because that is also an important market for us. You know, apart from the US European market is the one which is our second biggest market. So we are also expecting that once this situation stabilizes in Europe, I think we can see sales in Europe also to increase over the next few years. And so Southeast Asia is, is one market where we probably have not done so well, obviously because of increased competition from the local players and, and from, you know, from China and another neighboring countries.
But that is one market which has not performed as per our expectation. And like I said, the Middle east is a market where we have to do a lot of effort still to capture. And that is a market that we want to look at more aggressively in the current financial year.
Aman Agrawal
Understood, sir, thanks for that answer. Sir, Like a question on the base business, like assemblies, we are seeing material increase, right, in terms of mix and that is in line with our past guidance also. So like now from around like 50, 55% kind of mix during last quarter. And like almost like If I see assembly’s plus hoses, like we’ve started reporting it combinedly. So from 52% kind of number this year, how do we see this panning out for next year and years beyond? Like I understand our target is 75% and beyond, but like how do we see that panning out for next year and beyond?
Asad Daud
Yeah, so just wanted to clarify. So the numbers for, you know, for the flexible hoses is obviously separate and the number for assembly is separate. And overall, if you see for the entire year we have more than 50 of our sales coming in from, from assemblies, I think about 52 to 53% to be exact, coming in from the assembly business. So the assembly business obviously includes the assembly products and fitting. And we expect that over the next. I think as I mentioned last year also that our target is over the next three to four years, approximately 70%, 65 to 70% of our business should come from the assemblies.
And I think we are well on our target to achieve that because our focus in this financial year will also be to increase our sales of the assembly products, wherein we definitely have better margins, although it leads to slightly higher inventory cycle. But definitely there are better margins in the assembly in the business and a higher customer retention also. So I would say over the next probably two years or three years, we aim that we need to reach about 70% of the business coming in from the assembly.
Aman Agrawal
Right. So from here on the increase in.
operator
Mr. Aman, can you please come back in the queue for further questions. Thank you. The next question is from the line of Mahesh Windre from LIC Mutual Funds. Please go ahead.
Mahesh Bendre
Hi sir. Hi sir. Thank you so much for the opportunity, sir. I mean we had a fairly good year last year. So what kind of volume growth we are looking for this year?
Asad Daud
Yeah, so as I mentioned in my previous, you know, calls as well, our business is such that we don’t work in terms of, you know, volumes because especially when we are selling the assemblies, right, which is more than 50% of our business assemblies is sold in terms of number of pieces. And you know, we can have an assembly of 1 meter, we can have an assembly of 5 meter length, we can have an assembly of 10 meter length. So hence volume does not justify or does not give a true picture of our, you know, of our results and of our capabilities.
So hence we work on basically numbers. So in terms of value and if you’ve seen that over the last one year we have grown at about 18% in terms of top line and about 25% in terms of bottom line.
Mahesh Bendre
So can we expect similar growth for this year?
Asad Daud
Yes, definitely.
Mahesh Bendre
Okay.
Asad Daud
D efinitely.
Mahesh Bendre
Sure. Answer one question. I mean we have been hearing a lot about the US in terms of their bringing manufacturing inside the usa. So that will be beneficial for us in long term.
Asad Daud
Well, for our products. I would also like to add that in case of our products there are already manufacturers in the US So there are manufacturers who are quite big in the US because our product is a very critical product. So hence, and it goes into critical applications and critical industries. So hence a lot of the competition that we face in the US is actually from US made products. Because in our business sometimes the pricing is not the most important factor. There are a lot of other factors which are more important than pricing. Hence we already face competition from the manufacturers in the US now in terms of our plan.
So yes, we have plans to expand in the US through a more local presence. We are already in talks, we are already identifying actually a couple of companies who we can possibly collaborate with for having a presence in the US that is something which is still at an early stage, but that is something that is planned, that is a plan and then we want to have our local presence in the US in the next, at least in the next few years for sure.
Mahesh Bendre
So I think we were planning some kind of acquisition in usa.
Asad Daud
Yeah, we are, we are planning, nothing is finalized as yet so will not be able to comment on that.
Mahesh Bendre
But manufacturing will be done in India, right?
Asad Daud
So a part of the manufacturing will be done in India. The last mile assembly might be done in the US but that is something for me right now is at a very early stage to say because it depends a lot on the, the kind of acquisition that we do, what kind of capabilities the, the, the potential company has. So it’s, it depends a lot. So it will be difficult to say anything right now at this stage.
Mahesh Bendre
Okay, so last question from my end I missed if you had something about the tariff, will that have any influence on our business in near term?
Asad Daud
So like I mentioned that there might be like short term pain, you know, with regards to maybe a month or so. But I think long term, I think we expect that the demand for Indian manufacturers and the demand for actually demand for India made products will actually increase in the US not only for our products. I’m talking about generally. Obviously there is a pause on the tariffs which is, you know, which is good. But if you see the tariffs have already increased on our particular products from about 3 and a half or 4% to about 10% which is almost close to 2 and a half times.
But we have not seen major changes in the demand in terms of, you know, a huge decline or a huge fall. We have not seen, you know, anything like that. And like I said, because of the uncertainties a lot of our customers are also uncertain. But it will just delay their procurement. I don’t think it will change their procurement, you know, plan. So we don’t expect much of much of a, you know, I would say threat or something from the tariffs.
Mahesh Bendre
Sure sir. Thank you so much sir.
operator
Thank you. The next question is from the line of Prem Lunia from Ashtoot Investment Management. Please go ahead.
Prem Luniya
Hello. Congratulations sir, on the great set of numbers. I just wanted to understand about the competition which we’re facing overall in India and also in other markets like some of our competitors have also set up new plants in India, and how do you see it panning out now?
Asad Daud
So yeah, competition will remain and competition will be there whether in India, whether globally because the market is increasing and the demand for flexible flow solutions is increasing. Right. So our aim is obviously to, to be ahead of the competition. We are the number one player in India and we, and we would want to continue to remain a number One, you know, for the possible future.
And also our plan is not only for India but we ultimately aim to become the number one player in our business worldwide. And like 75% of our business right now is from exports and 25% from India. Which means we have actually, we have actually strengthened our leadership position in India wherein you know, in the last year about 80% of our sales for the export and 20% was India. This year it’s 75, 25. Which means that we have further strengthened up our position in India. And well, competition is good. So that competition keeps us on our toes, it keeps us to innovate.
It forces us to be always thinking one step ahead so that we are always ahead of the competition. So from that angle, competition is always welcome.
Prem Luniya
Right. And also on the domestic growth was it led mostly by some of the one time projects like some new industries been setting up and these are one time budgets which you also talked about last in the last call. Do you see it? Yeah. Moving forward.
Asad Daud
So in the last third quarter. Yes, there were a few projects that we have received in this quarter itself also we have so increased. We have also added the demand from new segments which also includes your some specific requirements of our products at the ports also in the irrigation, we have started to penetrate also we’ve seen increased demand actually coming in over the last couple of quarters from oil and gas, from petrochemicals, from steel industry. So overall we are seeing you know, significant demand coming in from the India market which has obviously, you know, helped us in the sales for, in the sales growth in India.
Prem Luniya
Sure. And can you please elaborate? You, you mentioned that there is a working capital difference between India and Indian international business. But how much would it be? Can you quantify this?
Asad Daud
Well, I can quantify in terms of say you know, days. You know, for example, if an overall working capital days, say for example for an export is just assuming say for example 120 days overall working capital cycle in India that comes down to about six, 75 days. So one is obviously because you know, for a. I’ll explain. So but one is obviously for exports you need to ensure that the, you know, there is a certain quantity of a container that has to be filled in, you know, in the container.
So that increases the inventory cycle plus also the, the time to travel from our, from our manufacturing plant to the customers. So. Yeah.
Prem Luniya
And also on the. Hi there. I see that.
operator
Mr. Prem, I would request you to please come back in the queue for the questions. Yeah, thank you. The next question is from the line of varun Mohanraj, please go ahead.
Unidentified Participant
Good morning. Thank you for the opportunity. So in the previous calls we’ve mentioned that our competitors are mainly from the US and the European. I think for the previous participant you’ve given us your plans with U.S. competition. So I just wanted to know about the plans and also your view on the European competition. Because before the tariff cost we saw Europe having a lesser tariff compared to India and obviously we wouldn’t know how it would be going forward. But I just wanted to know your view about how we will be able to face the competition from Europe if it has a lesser tariff compared to us. Thank you.
Asad Daud
Okay, so well, as of now I think that the tariff from EU and from India is the same. So from that angle, currently do not face competition from there. But in case, say for example, hypothetically if EU has a lower tariff, then obviously it depends on the amount or you know, or the differential in the tariff. If it is, if it is a minor difference, then there will not be any major impact on us. But if it’s a, if it is a major difference, then obviously there might be a few players in the EU who might be able to export in the US but you know, I don’t see there’ll be a very big difference in tariffs between EU and India for the, you know, for the U.S.
Unidentified Participant
Okay, thank you. And my second question would be on the metal bellows. So which industry would the metal bellows go into? Will it be going more towards the newer age industries which we’re doing or it will go into our traditional revenue by oil and gas and the other split?
Asad Daud
Both, both. So metal bellows goes into the new age industries. So like I mentioned in my speech, so we are, we have collaborated with one multinational company, large company based in the US for providing some, for providing flow solutions which includes metal bellows as part of that particular entire solution and that is being used for cooling systems, for AI data centers so that the new age, the new age opportunity that metal bellows provides. But also bellows are used in, in power generation plant, in steel factories, in petrochemical factories, in oil and gas factories, in, in steam and turbine applications.
So a lot of the, the applications for metal bellows are there in the traditional, which is the, your, the hardcore industries and also for these new projects and new age sectors as well.
Unidentified Participant
Okay, and my last question in the previous slide, we’ve given a long term guidance for like four, five years down the line. So at that point how much percentage of revenues would come from the metal bellows in our overall revenue cycle in.
Asad Daud
In, in which financial year?
Unidentified Participant
Maybe four, five years down the line.
Asad Daud
Oh, okay. Okay. Four, five years down the line. Well, hard to give a number for four, five years down the line. But in terms of I think about at least I would say 25% to 30% of our business, if not more would come from metal bellows four or five years from, from now.
Unidentified Participant
Okay, thank you.
Asad Daud
And it’s just a ballpark figure, right? It’s difficult to say because. Yeah, the world is evolving. The world is evolving, you know, every month.
Unidentified Participant
Okay. So. But the metal balance would be more of a bottom line increasing like since.
Asad Daud
Yeah, definitely. Yes, yes, you’re right.
Unidentified Participant
Thank you. Thank you. That’s it.
operator
Thank you. The next question is on the line of Pritesh Sherda from Lucky Investments. Please go ahead.
Pritesh Chheda
Yeah, hi sir, I have few clarifications. One you have given that assembly is 50% more than 50% of sales in FY25.
Asad Daud
Yes.
Pritesh Chheda
So I wanted to know how much of host production least converted into assembly and sold. So maybe if you could give that indicator as well.
Asad Daud
So, so like I mentioned. So in terms of the assemblies, the assemblies includes, you know like I mentioned, it could be about 1 meter assembly, it could be 5 meter assembly, it could be a 10 meter assembly, it could be 1 inch diameter assembly. Could be a 10 inch diameter assembly. So we don’t track the, the assemblies in terms of how much of holes that is produced. Because for us sometimes the, you know, in some, in some assemblies the value of the hose is 70% the cost of the assembly in some cases.
Pritesh Chheda
So I’m not asking the value, I’m just saying that if you had produced whatever out of 16 and a half million meter, whatever meter that you have produced in hose.
Asad Daud
Yeah.
Pritesh Chheda
How much got stolen as was only and how much? So you would always know in your erp, right. This many meters are produced, this many meters went build as horse and whatever was not built as hose was builders assembly. Right.
Asad Daud
Yeah. So you know, obviously it’s a difference. The reason being because when you convert the hose into an assembly, you’re converting meter into, you know, in terms of pieces. I don’t have the data right on top of my. But post the recall will probably share with you offline.
Pritesh Chheda
My second question is on the 16 and a half million meter capacity that you have, or let’s say on the 20 million capacity that you have at the current SS prices, how much of revenue potential this capacity would have based on your assumption of assembly being sold at whatever percentage of sales. So what you’re doing at 370, 375 crores. What it should be at a max potential.
Asad Daud
So at a 20 million meter annual capacity. And say, I just assume that say if 70% of the business comes from the assemblies. Right. So we can see a revenue potential of about 650 crores.
Pritesh Chheda
Okay. These are based on the currency prices.
Asad Daud
Yeah, obviously current price and current steel prices.
Pritesh Chheda
Asset prices are how lower versus the peak asset prices which were experienced a couple of years back?
Asad Daud
I think. A couple of years back. Steel prices right now I think would be at least, I would say 20 to 25% lower as compared to the peak prices. Okay, so peak is I think about two years back. One and a half, two years back.
Pritesh Chheda
And on metal bellows, you mentioned that your current capacity of 10,000 species a month is about 100 crore revenue potential.
Asad Daud
Right. 85.
Pritesh Chheda
This includes both. Right. Types of metal, the low pieces. So this includes everything. Right?
Asad Daud
Sorry, I didn’t catch your last, what did you say? The last sentence?
Pritesh Chheda
Okay, I’ll read for you. Capacity of 10,000 pieces a month. That translates into 100 crore revenue. Right?
Asad Daud
As I said, 85. Yeah.
Pritesh Chheda
And you have done about, in the six months of this year, once the capacity is operational, you have done 5, 7 crores. That’s what the number was.
Asad Daud
No, so this, the Bellows project started as in the first production started in, in the month of January. So it’s basically. But you know, three months, you know, even less than three months. And the bellows, like I said, the sales cycle for Bellows is slightly longer than as a whole because of the criticality involved. So they started to receive the orders from the domestic market. They’re expecting more orders to come in from the international market from the next quarter.
Pritesh Chheda
What is the EBITDA loss on this capacity?
Asad Daud
I don’t have the exact number on the bit and loss. But yes, obviously right now the, the Bellows, the project is not, is not contributing EBITDA because it just started the, you know.
Pritesh Chheda
Substantial number to be shared.
Asad Daud
I, I don’t have the data as of top of mind so it would be difficult for me to, to quantify it. But I can get back to you with the number on specifically that. But yes, obviously you know, there is a, there is no profit in the Bellows business as yet because they may have just started the business. So our actual, our actual EBITDA would have been much higher obviously if the bellows business had, had, has had reached its potential. But it’s obviously too early to say because it’s Just a few months in the business. So.
Pritesh Chheda
So this peak area of 650 plus 85, let’s say 735, maybe 750 to 800 based on few things here and there, prices here and there, you will be able to achieve the peak utilization on an exit basis in FY27 or in FY28. And I’m saying exit basis, peak utilization.
Asad Daud
Yeah, I think it will be closer to FY28 because we’re talking about the utilization of both the holes and the bedrooms. Yeah. Yeah.
Pritesh Chheda
Okay. Thank you very much and all the best.
Asad Daud
Thank you so much. Thank you.
Pritesh Chheda
Yeah.
operator
T hank you. The next question is from the line of Karan from Acid. C. Mehta, please go ahead.
Karan Mehta
Yeah. Am I audible?
Asad Daud
Yes.
Karan Mehta
So first of all, congratulations on achieving great results. I just have one quick question. Historically I’ve seen March for quarter performing better than December quarter, but this time it has not performed well. Like on revenue and EBITDA front, it has declined. So could you please throw some light on this?
Asad Daud
Yeah. So you know, to reiterate what I also said in the last quarter. Right. So we actually don’t look ourselves on a quarter on quarter, specifically from last quarter to current quarter because every quarter is that different because, you know, when we are in an International Market, Q3 is the, is the Q4 for a lot of companies in the international market and Q4 for us is Q1 for them.
Right. So we, you know, we encourage that we are compared on a year, on year basis or even in case of a quarter, it’s, it should be the same quarter of last year. And like I said in some quarters in my speech last, in the last quarter as well, I said, I mentioned that some quarters might be, you know, very good in terms of revenue, some quarters that might be, you know, not so good in terms of the, the top and the bottom line because that depends on a lot of factors. But if you see on a Y and Y basis, I think we have shown significant growth both in terms of the top line and in terms of the bottom line and the same on the annual basis.
Karan Mehta
Okay, just one more question. What are the competition we are facing in domestic market? Do we have any major competition?
Asad Daud
So in the domestic market we have competition from the international players who are, who have their manufacturing in India as well and who, and with whom we compete. But as I was mentioning earlier that we have strengthened our position in the domestic market where we’ve increased our market share and we have grown at a much, much faster pace in the domestic Market as compared to our competition. So we, this is an on account of a lot of new, you know, new segments that we have entered, new projects that we have taken. We have increased the business from our existing customers as well. So a result of, of all of that has resulted. I’m sorry, the efforts of all of that has resulted in this particular growth.
Karan Mehta
So thank you so much, sir. Thank you.
Asad Daud
Thank you.
operator
The next question is from the line of Rajesh Chan from NB Investments. Please go ahead.
Rajesh Jain
Sir. I had two questions. You had said that for our products the US has increased the tariff rate from the 3 and a half 4% to almost 10%. But the new tariff that Trump government has passed for 90 days. If that were to be implemented or imposed, what would be the tariff rate for our products to be supplied to us?
Asad Daud
So I think the tariff rate would have been Approximately, I think 20, 27 or 30%. Approximately.
Rajesh Jain
27. Okay. And it is not sure the same amount would be imposed on EU also. Right.
Asad Daud
I think it from the, from the tariff list that was, that was published I think towards the end of March or the 1st or on the 1st or the 2nd of April. I think at that time the tariff on EU and the tariff on India there was a minor difference of I think about 4 to 5% from what I remember.
Rajesh Jain
They would be cheaper or we would be cheaper, sir.
Asad Daud
So we would, if in that case if those tariffs would have been implemented, we would still be cheaper than you know, then EU reason being that the cost of manufacturing in EU is much, much higher than the cost of manufacturing in, in India. So yes, we would still be, you know, cheaper but obviously you know, when such high tariffs would be implemented. Right. It, it does not, it actually does not matter from where it is going. The problem happens inside that country like for example, you know, inside the US where with such high tariffs demand would fall because the cost, the inflation in that country would increase. Right. So yeah. But as of now it is on pause. Sorry, on pause mode.
Rajesh Jain
My second question is I know you had mentioned that our products are not decided based on the pricing as they are all used in a critical application. But we started supplying to US and Europe market post Covid and one of the USD for our products was the pricing. Having able to maintain the same quality as well as meeting the, you know, standards. Whatever the U.S. and European customers wanted, even a 10% tariff, wouldn’t we be costlier than the U.S. manufacturers?
Asad Daud
So just a couple of points to clarify. One is that we were selling to Europe and USA even before COVID so we have been selling to Europe and USA since almost, I would say 20 years, more than 20 years. All right, so one is that obviously in terms of the scale at that time was lower than what it is right now. So one is that second is in terms of, you know, 10% tariff is not as much to compare because still the cost of manufacturing in the US and in, in India, the US manufacturing is still, is still expensive.
It’s not, it’s not the differential amount is not 10%. It’s much more than that. All right, but what happens is obviously when you are made in the US you are approved in certain industries and certain critical applications where they will only take a make in the US product and not take any imported products, you know, specifically for some critical applications like your aerospace or defense, your, you know, certain communication devices. And also over there they, they have mandate to use only US made products. So over there obviously we don’t have much entry right now, but yeah, so you know, as long as the tariffs remain at 10%, we don’t see any, any issues for us.
Rajesh Jain
Okay, so even if it maintains a 10% or any more further increase, so then your plan of either collaborating or acquiring a manufacturing company in US should have to be done at a faster pace. Is that understanding is correct?
Asad Daud
Yes. So we are already working on that. We are already, you know, even before these tariffs were even a part of the discussion, we were still, you know, we are, we were exploring and we are exploring opportunities to, for acquisition in the U.S. so that is, that has been a part of our business plan since, you know, since the last year. So we are still actively working on it and we are hoping that, you know, very soon we’ll be, you know, able to close something.
Rajesh Jain
Okay. So with this 10% tariff, our margins to US sales would be down by few percentage.
Asad Daud
Minor. It could not be, it would not have a major impact. So like I mentioned before, this is the tariff was among 4%, so now it is 10%. So there the reduction in margin is there, but it’s minor, not much.
Rajesh Jain
Thank you very much for the clarification, sir.
Asad Daud
Thank you. Thank you.
operator
Thank you. The next question is from the line of Raman KV from Sequin Investments. Please go ahead.
Raman KV
Hello sir. Thank you for the follow up question. So in this quarter, how much did we did the company do from versus the flexible resources business and how much did the company do from the SME and fitting?
Asad Daud
In this particular quarter it was Approximately, approximately about 40% was from the, the hoses and about 60% was from the SMD. 40%. Yeah. For Q4 I’m talking about it was around 52% from assemblies and about 48% from flexibilities.
Raman KV
So my question is now in the previous three quarters of the year we have been approximately around 50 crores from the horses business. But this quarter we did around 37 crores. Why? There was like a significant dip in the revenue from hoses. Can you explain why was there a significant dip in the revenue?
Asad Daud
So there is no actually dip in the revenue. Reason being the assemblies that we make hoses is part of that. Okay, so when we make an assembly, right. A hose is one of the, I would say one of the component of the assembly. So technically speaking an assembly can. Can only be made if it, you know, if it has a hose. So without the hose you cannot make an assembly. So technically speaking the, the revenue from, you know, is not down. It is just that the revenue which was earlier being sold as flexible hose is now being sold assembly.
So there is value addition. I hope I was able to clarify your point. The point. Yeah.
Raman KV
So my last question is with respect to the realization of hoses. Last year in FY24 we did around 180. The realization for the entire year was 181 rupees. This year I think when I’m calculating it’s 122. Rupee per watt per meter.
Asad Daud
No. So I don’t know how did you calculate that figure? Because when we excel we sell it in the form of like the hose obviously, you know, goes in the form of meter, but the assembly goes in the number of pieces. So.
Raman KV
Okay.
Asad Daud
Yeah. And then what happens? So obviously if you can, you can share your calculation with me offline because this is something which I’m not aware of. But what happens is when you sell a lower diameter hose, the value is lesser. When you compare a higher diameter hose of the same meter, the value is higher, you know, obviously because there is more material has gone, there is slower process and so on and so forth. Yeah.
Raman KV
So. But my overall understanding is the main reason why the revenue from hose had a dipped was one you like. So you, you. Some percentage of the revenue was shifted to the assembly assembly business as a value added product and as well as the Overall revenue in Q4 added took a impact due to shipment delay. Right?
Asad Daud
Yeah. So some of. So like I mentioned, assemblies, you know, whatever we sell as, as assembly holes is big is a part of that. So the. There is no drop in the business of specifically the hose. It is just that we have done a bifurcation in a way that we are showing holes as a separate vertical and the assemblies as a separate vertical. So there is, you know, there is no drop in the sales.
Raman KV
Okay. So thank you, sir.
Asad Daud
Okay. Thank you.
operator
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today’s conference call. I would now like to hand the conference over to the management for closing comments.
Asad Daud
Thank you so much everyone for joining the call. And if I was not able to answer any questions or if you require any further information or any further details, you can contact us or you can also contact sga, who is our investorization advisor. I would like to thank everyone for taking out your time for joining this call and hope all of you have a great day and a great weekend ahead. Thank you.
operator
Thank you. On behalf of Aeroflex Industries Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.
Asad Daud
Thank you.