Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Aeroflex Industries Ltd (NSE: AEROFLEX) Q4 2026 Earnings Call dated May. 06, 2026
Corporate Participants:
Asad Daud — Managing Director and Chairman
Analysts:
Raman Venkata Kerti — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Prem Luniya — Analyst
Maitri Shah — Analyst
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Ladies and Gentlemen, good day and welcome to Aeroflex Industries Limited Q4 and FY26 results conference call. This conference call may contain forward looking statement about the company which are based on the beliefs, opinion and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation.
Conclude. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchdown phone. I now hand the conference over to Mr. Asad Dawood. 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 Aeroflex Industries Limited fourth quarter and FY26 earnings call. Joining us today are members of our senior management team along with the representatives from Strategic Growth Advisors SGA who are our Investor Relations partner. I hope you have had the opportunity to review our financial results and the investor presentation which is available on the stock Exchange website and also on the company’s website. I’m happy to report that FY26 has been a great year for the company where our execution, excellence, our strategic expansion and the market opportunity have all come together to deliver the highest ever quarterly and yearly performance up to date.
I’m also happy to share that the board has also recommended a final dividend of 20% which translates to about 0.40 rupees per equity share of face value rupees to each. This reflects our continued commitment to delivering value to our to our shareholders. The company operates in a very niche global market with limited competition and we also benefit from a competitive advantage. As the only India based manufacturer with such scale and with such capabilities. FY26 has been the landmark year which has been marked by our successful entry into the skid assemblies and advanced flow control solutions for high performance liquid cooling applications which are used specifically in data centers and AI infrastructure segment.
As the consumption of data increases and continues to scale rapidly across the world, primarily led by AI cloud and high performance computing. There is a limitation of traditional air cooling which is becoming increasingly evident and as the liquid cooling is emerging as the preferred solution for the next gen data center infrastructure given its performance superior performance efficiency. Now talking about the key highlights for the quarter, Our hoses and assemblies business continues to demonstrate steady and consistent growth which is also supported by robust demand coming in from diverse end user industries and also our established global customer presence, we have achieved an ebitda margin of 23.86% in Q4 which also reflects our strong operating leverage and also is a result of the continuous improvement in our product mix.
Talking about our subsidiary Hideout which has continued to gain strong attraction during this quarter, delivering a robust year on year growth, primarily dividend, primarily driven by healthy demand across its entire product portfolio. We also continue to enhance the product portfolio and expand the market of Hideair and also Hideare in the future would play an important role in the new age businesses that Aeroflex plans to enter into in the coming years. Our newest segment of providing liquid cooling solutions continues to expand and with the ongoing supplies of the state assemblies which has commenced from the end of Q3 and also the supply of advanced flow control components for high performance applications in the last financial year we achieved a strong traction in our state assemblies the business with the sales of 617 skid assemblies which resulted in an overall sales of approximately 21.2 crores and this has been done over the last four months itself.
This performance shows the increasing market acceptance of our products and it also reinforces our capability to deliver customized higher value and solution oriented offerings, positioning this segment as one of the key drivers of the company going forward. We also showcased our entire portfolio of advanced flexible flow solutions at the Data Center World Exhibition which happened in Washington last month and it reinforced our strategy of focus towards the next generation thermal management technologies for the global markets.
Currently we have scaled our skilled assembly capacity from 2,000 units per annum to 6,000 units per annum and we are on track to further expand the same by the next quarter to 15,000 kids per annum. We are also strengthening our innovation pipeline with more than 15 products under development which are primarily focused on high growth segment. Now coming to our assemblies segment, we have continued to strengthen our capabilities through expansion of capacity and also have commissioned two robotic welding lines to enhance automation, precision and operational efficiency.
In addition, we are also investing in advanced manufacturing capabilities including a new Annealing furnace facility targeted for commissioning by the end of this year. These initiatives are expected to increase our product offerings, also increase our throughput and also support the deeper penetration that we want to do in especially mission critical applications. Our metal bellows segment has begun to gain traction across a range of applications and we are expecting that this division will to deliver strong growth in the coming years.
I’m talking about the financial performance for Q4FY26. Our total income stood at 126 and a half crores which is a growth of 38% on a year on year basis which is driven by an improved product mix and a growing contribution from Value Added Solutions. The EBITDA for the quarter came in at rupees 30 crores which is robust growth of 59% on a year on year basis. And the EBITDA margin also saw an improvement of 326 basis point and it came at about 23.86 percentage. The profit after tax stood at 17.6 crores which is a growth of 57% on a year on year basis.
With a PAC margin of almost 14%. Our cash profit grew significantly to 25.4 crores which is the growth of 67% on a year on year basis which reflects strong cash generation and improved operational performance of the company. Now Talking about our FY26 as a year the total numbers, I’m happy to share that we have been able to achieve the targets that we had set out. At the start of the financial year. Our total income stood at 443.3 crores which is a growth of 17% on a year on year basis. This is despite the fact that we had a very weak first quarter.
EBITDA stood at almost 100 crores 99.7 to be precise, translating to an EBITDA margin of 22.6% and a growth of 26% in value terms on a year. On a year on year basis our PAT stood at 55 and a half crores with a packed margin of 12 and a half percent. Our skid assembly segment which is our newest segment, has begun contributing to the top line and now and is right now accounting for only 5% in FY26. But we expect that this share to scale significantly in the upcoming years. Our value added product segment which includes assemblies and fittings and bellows contributed 52% of the total sales.
The domestic sales contribution has also increased to 31% from 26% which is mainly driven by the increased attraction coming in from the skill assemblies and also from Hyder. Now looking ahead to the current financial year which is FY27, we remain focused on deepening our strategic shift towards higher value added products and also expand our presence in emerging sectors such as data centers and AI infrastructure. We will continue to pursue growth through new product development, through optimization of margins, capacity expansion, geographic diversification and also inorganic opportunities.
These initiatives position our company to strengthen our market leadership and deliver consistent growth both in terms of top line and bottom line. With the strong order pipeline that we currently have long standing customer relationships and our ongoing investments in technology and capacity. We are well positioned to sustain a growth momentum in the near future. We continue to strengthen our capabilities and to enhance our execution at the ground level and aim to deliver robust growth over the next few years.
With that, I would like to conclude my remarks and thank you so much everyone for attending the call. We can now open the floor for Q and A. Thank you.
Operator
Thank you so much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Nikonj Bhanushali from Walford pms. Please go ahead.
Questions and Answers:
Raman Venkata Kerti
Thank you for the opportunity. Am I audible? Yeah. So I had a few questions. So what is the order book for the liquid cooling skids that we have currently?
Asad Daud
So in the liquid the cooling sketch we work on a long term contract with our, with the supplier who, with whom we have an exclusive contract and they have given a pipeline for the entire year and then they break it down into, you know, quarterly pos. So since right now we are dealing with one specific or only one particular supplier due to disclosure agreements will not be able to share the the order book with them that we have. We have. We have a vision, you know, for the entire year that they have shared with us.
Raman Venkata Kerti
The
Asad Daud
Our capacity expansion is based on this on the same lines.
Raman Venkata Kerti
Okay. Okay. So just for the suggest if you can share something on the planned utilization levels that will have for the 15000 capacity for full year. So in half year we’ll have 6000 capacity. I think about 6000 and then we’ll go on to 15,000. So what, what land utilization levels?
Asad Daud
So I would say the maximum utilization that we can do of the capacity would be about 75 to 80% at the peak level obviously when we start, you know, when we commission the capacity to get it up to 75% would, you know, would take its time as naturally with any expansion. But, but the peak utilization you can consider it at between 75 to 80%.
Raman Venkata Kerti
So just a follow up for 6000 we can utilize up to 75% in the current year.
Asad Daud
Yeah. Yes.
Raman Venkata Kerti
Okay. Okay. And my second question is regarding the metal bellows. Could you share numbers? So what, how much was the business we did in the current year in the previous year for metal bellows in FY26.
Asad Daud
In the current year on an annual basis we did about 8 crores of business from the metal bellows section. And the majority of the business came in in Q3 and Q4 where we have seen the uptick in sales beginning from in the last two quarters. And we expect that this year the bellows the division would grow significantly because we have certain large inquiries coming in from oem. So we are hopeful to to get those to convert it and see a significant uptick in the sales of metal mellows in the current financial year.
Raman Venkata Kerti
Okay. And lastly what was the hide air revenue for the FY26?
Asad Daud
Hide revenue in FY26 was 31.64 crores.
Raman Venkata Kerti
Okay, that’s it from my side. Thank you.
Operator
Thank you. Ladies and gentlemen. In order to ensure that the management will be able to address all the question from the participant we request you to kindly limit your question to two questions per participant. If you have a follow up question please rejoin the queue. Our next question come from the line of Raman KB from Sequent Investments. Please go ahead.
Raman Venkata Kerti
Hello, can you hear me?
Asad Daud
Yes.
Raman Venkata Kerti
Yeah. So my question is just a follow up on the previous participants with respect to Hyder. So what’s our current utilization and are we planning with respect of higher and are we planning to do any capex with in the high deer business?
Asad Daud
So in terms of utilization I think IDAIR is you know currently at about 60% utilization. Our aim in the next in this financial year is to utilize the capacity of IDAIR for internal consumption for Aeroflex industries. Because we have certain projects coming up in the next few months where we have requirements of. Of specific fittings which we are going to manufacture in house at Hidel. And these are products for high end applications. Hence we want to utilize the capabilities of high def for our internal consumption.
Raman Venkata Kerti
Okay. And on the liquid cooling part you mentioned that the liquid. The technology. You have a technology exclusive agreement with one of the US Company US based companies
Asad Daud
With
Raman Venkata Kerti
Respect to your technology, right?
Asad Daud
No, with regards to. With regards to technology, with regards to supply, with regards to everything. So we have an exclusive
Raman Venkata Kerti
Contract
Asad Daud
With them for sketch.
Raman Venkata Kerti
So I just want to understand under this agreement is it a. Are you sharing any revenue or are you giving them any royalty and if so can we know?
Asad Daud
Yeah, I would just like to clarify this is an exclusive agreement where we are going to supply the skid assembly to them. You know. So we have an exclusive you know agreement for the India market where whatever skid assembly that we manufacture, we will be supplying it to them and then obviously they will be supplying to their customers. So, so their customers are all the companies who are setting up data centers, basically.
Raman Venkata Kerti
So basically you’re not paying anything to the U.S. Client. Right.
Asad Daud
So this is a U.S. Headquartered company. They have a very big operations in India. So we have tied up with the, the India subsidiary of this basically.
Raman Venkata Kerti
Okay, understood sir. And so my last question is. So during the quarter we have seen that the exports have decreased like from almost 69%. It went down up to 60% and your domestic business is picking up. So can we expect this to be the new normal like 40, 60 spread between domestic and exports?
Asad Daud
So I would just like to clarify. Export has not decreased. The ratio has changed. That does not mean the value of exports has decreased. So just wanted to clarify that domestic share has increased significantly. Reason being that the domestic sales has almost increased by about 40%. So that’s why the ratio of domestic is higher as compared to the previous. But exports has also increased in double digits in Q4 despite the fact of the entire situation that you are seeing which is happening, you know, in West Asia.
So our exports have also increased but because the domestic has increased significantly more than the exports. Hence the ratio of domestic is now more. And obviously because the entire business of skid assembly will be in the domestic market. So this ratio of domestic would also increase in the near future.
Raman Venkata Kerti
So can we expect the same like you mentioned that domestic business increased by almost 40%. So can we expect that domestic business to grow at a higher, higher rate versus the export business or will it normalize?
Asad Daud
Yes, definitely no, because the entire skid assemblies will be sold in the domestic market right now. So the share of domestic would increase for sure.
Raman Venkata Kerti
Okay, thank you sir. I’ll follow up in the.
Operator
Thank you. Next question comes from the line of Karan Gupta from Acmil. Please go ahead.
Raman Venkata Kerti
Yeah, hi. Am I audible?
Operator
Yes, y.
Raman Venkata Kerti
I can hear you. Yeah. So. So my question is related to more understand the product portfolio. So I’ll have some basic questions to understand. What is the share of our product share of in the overall dam of the data center and liquid cooling systems? How much our products contribute in the costing side? Do we have any patent on that product? Or in terms of technology and any competitive advantage or export market, what’s the cost benefit? We have this sort of question, sir.
Asad Daud
Okay, so first of all I’ll go with the last question first. Right now for the export market, for the liquid pulling we they’re not supplying our skid assemblies in the export market right now we are only supplying our whole assembly which goes into data centers international market. So skilled assemblies right now is 100% in the domestic market only in terms of the patent. So we are working with like I mentioned this company. So we are actually jointly developing the product along with them. But obviously since they are the principal, we are designing the product along with them.
So we are aware of the technology that goes into the product. But right now we don’t have any patent on the particular product. Also reason is because every, the design of every data center is unique and it’s different. So hence the skid assembly is required for every data center in terms of the design would be different. So hence there is no patent per se. Right now it is about the technology. How do you, how do you manufacture the product in such a way that you reduce the, the operational cost for the data center?
That’s the real skill in this particular, you know, business. So because ultimately there is a huge operational, you know, cost for data center in terms of cooling. So how do you reduce their operational cost? That’s the real USP in this. And then the total time I think in the data center market right now is huge. It’s growing at almost 35%, you know, on a year, on year basis. Right now it’s about, I think at about 3 billion, 3 odd billion right now and which is expected to grow to almost about 21 billion the next five to six years.
So that’s almost a seizure of close to 34, 35%. Right. So that’s the market that we are capturing right now. Although right now we have a very, very, very, very small percentage of the market. But our aim is to, to keep increasing our market share and, and also expand into more and more, you know, products which will be used in the HR centers in the near future. So, so our aim is to focus. Yeah,
Raman Venkata Kerti
Just, just follow up on that because the, the question will be unanswered. So let’s say just to add here the unit economics of or the cost of 1 GW of capacity. So I have figured let’s say 1 gig of capacity costing you around 50 to 60, 000 crore in India. Not the hyperscale AI data center, but the normal one. Right now this figure is correct. First of all, 50 to 60,000 crore for the one giga. I will
Asad Daud
Not be able to comment on that because I am not in the business of making data centers. I’m probably not able to comment on something which. Okay, okay. Just a
Raman Venkata Kerti
Broad time. I’M just trying to understand here. So let’s say if you just google it, so it will give you 50, 60,000 crore. Now.
Asad Daud
Can you be little specific on your question? Yeah, sure. Thank you. Yeah,
Raman Venkata Kerti
So just, just wanted to know the cost of one gigawatt of capacity. What is the share of our products? Basically
Asad Daud
How much we are, I would say in terms of the entire. I would not see. I see. First of all, to you know, just to clarify, so we are not selling directly to the data centers, right. We are selling to the company who provides the entire liquid, the cooling solution. So the skid assemblies is a part of the entire liquid cooling. It is not just the, you know,
Raman Venkata Kerti
Who are providing cooling distribution units.
Asad Daud
Can I just please, if you don’t mind.
Raman Venkata Kerti
Sure.
Asad Daud
Yeah. So yeah, so my point was that we are only providing a part of the liquid cooling. Hence to give you an exact number in terms of how much is our product as compared to the entire cost of the data center would be difficult to answer for us because we are not supplying directly to the data center. But from, you know, what I understood from the market knowledge that we have gained is that the liquid, the cooling comes to about 10% of the cost of the data centers. Anywhere between 10 to 11%. That’s the cost of the entire liquid cooling which includes your primary, secondary and all kinds of, you know, cooling at a data center.
So that’s the time for liquid cooling. Yeah. Okay,
Raman Venkata Kerti
That’s very helpful, thank you.
Asad Daud
Okay,
Operator
Thank you. Our next question comes from the line of Tej Patel from Navisha. Please go ahead.
Unidentified Participant
Thank you so much for the opportunity and congratulations on a good set of numbers, sir. So the first question is regarding, you know, if I go through the convol of, you know, last quarter probably you said 42 crores of skills were for immediate execution. So is it like something there was some part of execution which was supposed to be done in this quarter but was not done and if not then what was the reason? Is there some supply bottleneck?
Asad Daud
So the right now the main bottleneck is from the design aspect where the design which was initially to be provided by the principal is actually now being done by our entire team. So designing of the skid assembly is the critical aspect here where until and unless a skid smd is designed and finalized, the production cannot start for the same. Plus also what we have seen over the past few, a couple of months is that there is a significant, you know, supplier quality control and sorry, like customer quality control and customer audits.
The end customer, I’m talking about not the one that we are working with the end customer who is ultimately at whose data center the particular scale assembly will be installed. So there is a very, very stringent and very detailed, you know, quality check that has been conducted, you know, that are conducted by each and every customer. And every customer have their own unique way of, you know, of doing the, the audits. So obviously some look at some specific things, some look at, you know, the welding aspect, some look at the design aspect.
So, so that is one where, where we still feel that I think we are still slightly behind the supply as compared to the demand is because that the design and the quality she checks the manufacturing. That is where something. We are facing a bit of a bottleneck in terms of the time. But yeah, so I think we are hoping that over the next couple of months, I think that will be streamed out and smoothened out. I’m sorry. And then we’ll be able to see more business, you know, in the sense more, more sales happening from this particular, you know, business.
So we have also. So in terms of manufacturing, they’re still much higher but obviously supply depends on a lot of these quality controls and quality checks.
Unidentified Participant
Understood, Understood. That helps us. So my second question is, you although said, you know, for 6,000 skids will be probably reaching 75% of the utilization. But let’s say once we expand it to 15,000. Right. The incremental capacity would probably reach up to what utilization by let’s say, the end of year.
Asad Daud
Well, our target would be that by the end of the financial year to reach, you know, produce to at least 60 to 70%. So almost very close to the capacity that we are setting up a target would be to reach there by say, you know, March of next year. Obviously it depends on a lot on the, on the, you know, on the operational side because the, the business right now is. So there is a lot of operational excellence required for this kind of to manufacture these kind of state assemblies.
Unidentified Participant
Understood. But so let’s say. And that’s great. And let’s say if we are probably expecting to reach it, reach, you know, 60, 70 of the utilization, you know, are we probably planning to add more capacity towards kids? Are you planning to, you know, go beyond 15,000?
Asad Daud
Our ultimate aim is to go beyond 15,000. But I would say right now the focus of, you know, our focus is to get the first 15,000, you know, commissioned and get it up and running. Obviously the first focus is over there. And then obviously, you know, once that is under process and once it is commissioned we then look at further expansion.
Unidentified Participant
Great. And sir, you know, you mentioned the PPT as well. You probably represented in an expo in usa. Any engagement from there? Any lead from there? You know, are we engaging with some customers? Apart from the one which we probably won in domestic, Are we engaging with some other customers in the international market through that expo or somewhere else?
Asad Daud
So yes, our aim in that exhibition was to expand our business internationally also in terms of the. In terms of the liquid, the cooling space. And that is why we exhibited in that exhibition. We have already got certain leads and then the team has started working on those leads and to discuss with those customers with regards to the liquid cooling solutions.
Unidentified Participant
Great, they already started the discussion,
Asad Daud
But very difficult to comment on that right now. On the status.
Unidentified Participant
No. Understood, understood. And so for high date usage, we probably using it for, you know, niche application and high end applications.
Asad Daud
So
Unidentified Participant
Good higher there we probably use for connectors in D.C. As well. And if. Yes, you know, probably what then? Then what I understand is for us to probably use hider connects, you know, hider connectors, you need approvals from the HVAC players. Right. The customers we are right now working with. So are those, you know, sampling and approvals going to them? You know, what stage are we in that?
Asad Daud
Yeah, so like I mentioned for the. We want to utilize the capacity of ideas for our internal use, you know, right now because we are seeing a lot of demand coming in from end fittings and connectors. Not only for the, you know, you know, for us, for us whole assemblies and for some specific application in H Vac and also for. For data centers. So hence we want to use planning to utilize the capacity of Hyder over there. Yes. In terms of supplier checks and. Sorry, customer checks and customer audits.
I think at whatever manufacturing facility we manufacture any product. Right. They are some kinds of. Obviously first we require all kinds of certifications which are recorded by the customer. And then obviously customer audits and customer supply checks are a must, you know. You know, before we start supplying to these high end industries.
Unidentified Participant
Okay. And we are in the process. I’m sorry to interrupt
Operator
You Mr. Patel, but you may please rejoin the queue for more question. No
Unidentified Participant
Problem. Thank you. Thank you so much sir. Thank you.
Operator
Reminder to all the participants. In order to ensure that the management will be able to address all the questions from the participant, we request you to please limited question to two question both. Participant, if you have a follow up question, please rejoin the queue. Our next question comes from the line of sawmills and from Lucky Investment. Please go ahead.
Raman Venkata Kerti
Thanks for the opportunity. First question, at 15,000 skids full utilization, can you give us a sense on how many megawatts of liquid cooled data centers that can support.
Asad Daud
Oh well, it’s like, it’s difficult to give a number for that in the sense. So you know, I can probably say that at, in terms of the business, I can say that at say 75% capacity utilization. Right. And like you know, which as I said, you know, could be the peak. We can expect a total revenue for the business to come in at about 300 and 325 to about 330 odd crores. Now in terms of May. Sorry,
Raman Venkata Kerti
Sorry, go ahead.
Asad Daud
Yeah, so 300, 325 to about 330 crores in terms of megawatt. It’s, it’s slightly, you know, difficult. The reason being if you see that some skill assemblies that we manufacture sell at a higher price, some skill assembly that we manufacture slightly lower price. So it, and the entire design depends on the design of the data center. Right. And how they have designed the entire data center with, you know, is it a more, you know, flat data center? Is it a more vertical data center? Is it a, you know, you know, is it a different style of data center?
So you know, commenting on specific how many megawatts that would convert into would be difficult for me to give an answer. I can talk about the revenue. Yeah, that how much it will generate us today.
Raman Venkata Kerti
Got it. And on the base business, can you talk about the share of the largest customer and if you could talk about the, you know, growth outlook from that customer or from those set of customers given the infrastructure buildup in, in, in the US that we are seeing now.
Asad Daud
Talking about the, the US or are you talking about the data, the liquid cooling, the skilled assemblies?
Raman Venkata Kerti
No, the US Business. Exox K.
Asad Daud
Okay. I think our biggest customer in the, in the international market contributes about 25, 26 right now. And in terms of the outlook, you know, we have seen. So you know, despite the fact that the last year US had all kinds of, you know, all kinds of issues in terms of initially beginning the year with tariffs and then, and then the tariffs got, you know, you know, even bigger, uh, coming up to the middle of the year and then ultimately at starting at the almost the, you know, the middle of Q4 when the tariff release came in.
But then suddenly then the, the war happened. So despite all of that, I think our US Business contribution to our overall sales has increased in terms of, you know, the sales in terms of the value. Also the US Business has increased as compared to the previous year. So I think despite all of that, we have seen significant uptake the start of the year, to be frank, we were expecting, expecting the US Business to do much, much, much better. But I think I would say despite everything that happened this year in the U.S.
Despite all of that, the U.S. Business has still shown a significant jump. I think that’s, I think I would say that’s a great achievement by the team to get these, you know, to get this kind of business from the US and despite all of these issues that have happened in the, the year.
Raman Venkata Kerti
Got it. Good to hear. And one final clarification. The connectors that we spoke of, These are the QDs that have proven to be bottlenecks in the hvac industry, especially for liquid cooling elsewhere in the world. Is that is my understanding correct?
Asad Daud
No, not necessarily. The connectors that I’m speaking, that I’m talking to right now are used. Some of it are used for scheduled assembly, some of it are also used for hose assemblies, which are ultimately used in data centers. So in terms of, you know, our, you know, in terms of our bottleneck, the bottleneck is not the connectors per se. It’s. It’s a bottleneck is right now the design part, as I said, the second is the, the customer check and the customer, you know, audits that happen on a rigorous basis and almost like every day.
Raman Venkata Kerti
Okay. And you’re, you know, the largest account growing at a certain pace. Is that because of higher wallet share with that specific customer or the end industry customer growing at that pace?
Asad Daud
You’re talking about in the US
Raman Venkata Kerti
Business?
Asad Daud
In the US Business. So in the US Business, we have seen not only the largest customer grow, but also the other, you know, customers that we have have also shown a lot of, you know, growth. We’re also seeing a lot of demand coming in for whole assemblies from the US from, you know, from, you know, from customers who we, you know, previously did not have. And these customers are the ones who are looking for the products that we are manufacturing, whether it’s the whole assembly, whether it’s. And like I said, even we started to receive orders for metal builders as well.
So we’re seeing attraction for these products in the US as well.
Raman Venkata Kerti
Great to hear that, sir. Thank you so much.
Operator
Thank you. Our next question come from the line of Shweta from I thought pms. Please go ahead.
Unidentified Participant
Yes, sir. My first question is a follow up on the previous question. So this 60%, around 60% utilization that we are targeting by next year March, is that incremental orders coming fully from this principal company or are we also looking at export orders for the skids?
Asad Daud
Right now what we have. Right now what we have is. Right now what we have is for the orders which still come in from the principal only because we have not taken into consideration the orders which will come in for, you know, any other, you know, the customers, because the other customers. The talks have just begun. So it’s too early to say that.
Unidentified Participant
Okay. And sir, I saw that in this quarter’s PPT, we had increased miniature bellows capacity to 60,000 pieces. So will this be sufficient for our 15,000 skids or will we be needing more capex in this regard?
Asad Daud
Sorry,
Unidentified Participant
For the miniature bellow segment. The miniature bellow segment, will we be needing any incremental capex?
Asad Daud
So in minisibular metal, like I mentioned in my previous call, we are, we won’t be doing any further expansion except a few, you know, ancillary equipments on machinery that we require. We have redeployed the capital that we are allocated to miniature metal bellows to. To, you know, the liquid, the cooling vertical. So right now, as I think, there will not be much capex that would happen in the, in the, you know, in the next, in at least to this financial year.
Unidentified Participant
Okay, sure.
Asad Daud
Yeah, yeah, please go ahead. Yeah,
Unidentified Participant
Yes, please continue.
Asad Daud
Yeah, also just wanted to say that, you know, with regards to the utilization of 60. Right. So the 60% is on talking about March closing, you know, which would mean that by March we expect that in the month of March we will be hoping to achieve 60 utilization. So just wanted to clarify to everyone that it’s not 60 for the entire year, it’s for the March closing.
Unidentified Participant
Okay, sir. And this is on the 15, 000 skids, right?
Asad Daud
Yeah.
Unidentified Participant
Okay. All right, so last question. There was an income tax demand of around 40 crores relating to a visa in 2019, if I’m not wrong. So this is like almost a full year spat number. So how confident are we on this appeal? And like, could you give me an expected timeline for when this will get resolved?
Asad Daud
Yeah, so this relates to, I think financial year 1819, I think, sorry, financially assessment year 1819. This is with regards to the. So when we took over this company, which was a stressed company, there was a waiver of loans, sorry, the waiver of. Of interest by the banks and, and you know, by the bank, basically, uh, we have already, you know, we had done the necessary disclosures in both our financials and our income tax return. So we are confident that this is something which will be, you know, which would come in our favor in, in the appeal that we are going to file.
Also would like to just, you know, tell everyone that because of time bar situation also I think the income tax department reopened this particular assessment year where the assessment for this particular year was already closed previously, but it was open. And because of time bar issues I think they have, they have claimed that it is an undisclosed business income where it was, you know, clearly disclosed both in financial statements and also in the income tax return. So as per our, you know, our advisors and our lawyers, we are extremely confident that these things is going to be reversed in the appeals that we’ll, you know, going to fight.
Unidentified Participant
All right, thank you so much.
Asad Daud
Yeah,
Operator
Thank you. The next question come from the line of Aman, which from Institute Investment Management. Please go ahead.
Unidentified Participant
Good morning, sir. My first question is on the data center business. New products. So could you talk about when can we expect these products to be launched in the market and start contributing as well as I believe we are also adding a lot more products. So what is your strategy of in terms of building a team, what it is today, what do you see this team size in next two, three years.
Asad Daud
So in terms of the team, right. I think we, the entire team, whether you talk about sales and marketing, operations, technology, I think everywhere you’ll see significant push on increasing the team which is also pretty evident by the increase in the employee cost if you see from our financial numbers. So the thrust is to build the team and to scale it up with regards to the. Sorry, I forgot the first question. What was the first question?
Unidentified Participant
Yeah, it was when do you expect new products apart from skid? So we are adding a lot more new products in data center business. So
Asad Daud
In the data center business, apart from the SK assemblies we have our, our host assemblies. So you know, which we are designing specifically, you know, for data center projects. So these hose assemblies will be used in data center applications. Whether it’s for the last mile, you know, cooling or whether it is for the firefighting solutions or whether it’s for transfer of any kinds of other liquids. We have already started developing those products. It is under approval at the customers end are also our annealing plant that we are planning to commission would also, you know, contribute to this because a lot of the whole assemblies and data centers have to be unealed.
So that would also be. That would also contribute to that. So these are the new products that we’re developing. Some of it are under development, some of it are, you know, under customer approval. And I’M hoping that from the next quarter, you know, we’ll start to see the sales coming in from these products as well.
Unidentified Participant
Sure, sir, that is helpful. My second and final question is we have started supplying skits for domestic market and I believe our customer will put these skits in the data center. So I also think that you would have already started the process of getting some global approval because the same customer is a very big player in the global market. So where, where are we in that journey of getting the approval of the skids for the global markets? Can we expect something in FY27 or mostly in FY28 only?
We will start getting the approval and maybe supply also for the global market.
Asad Daud
See, in terms of the global market, our aim is to have or to start at least some supply of skid assemblies in the international market in the current financial year. But it’ll be difficult to give any specific number or any specific guideline on that. But yes, the idea is that the future expansion plan for us is that, you know, apart from the business in India with regards to state SMGs, there is also a very big business internationally for the street smd. So definitely we will be, you know, working on it now, whether it is with the, our existing, you know, exclusive partner or whether it’s with, you know, different, you know, other companies or internationally.
I think that’s a decision that we would, you know, take as and when, you know, we see some inquiries coming in.
Unidentified Participant
Thank you for answering the question.
Operator
Thank you. Our next question comes from the line of Ashok Shah from Eclip Invesco family office. Please go ahead.
Unidentified Participant
Thanks for taking my question sir. We are manufacturing skid assembly and also batter belows and also OS5. So can you just give some rough idea how much is we are competitive compared to the if it is manufactured outside India or it’s in USA or something like that.
Asad Daud
Well, in terms of skid assemblies, right now we are manufacturing and supplying only in India. So our competitiveness internationally. I’ll not be able to comment because we’ve not started to supply internationally, but obviously in India right now we are among the only players who are manufacturing and supplying skid assembly. So I think right now it’s more about supply than about pricing with regards to the bellows and the hose assembly. So yes, we are the largest manufacturer in India for host assemblies.
Right. So from the economies of scale perspective, we are extremely competitive in terms of our pricing. Especially if you consider the international market where, you know, in terms of our business almost so 60% of our overall business is exports. But if you see the from the hose assembly perspective, almost 75 to 80% of the business of whose assemblies actually comes from exports. Which means that our products first of all are, you know, meet the quality which is requirement of the international market.
And secondly, it comes at a much, you know, better price as compared to what they, you know, would be buying locally. So you know,
Unidentified Participant
So percentage, so percentage it could be a 30, 40%. We are cheaper.
Asad Daud
Yeah. I would say on a ballpark figure on a landed cost will be definitely 25 to 30% cheaper. But that would depend a lot on, on product to product, on market to market. So it’s, it’s, it’s slightly more in the US it’s slightly lesser in Europe. It’s, it’s even slightly lesser in the Middle east and Africa. So it depends. So internationally it’s a big market. So you know, US works very differently as compared to Europe, which works very differently as compared to Middle east and Africa.
Unidentified Participant
Thanks for answering. And my last question is regarding we have got three this group companies. So are any plan to marjorie to get some economy upscale or something like that or can you explain what are the business we are doing that.
Asad Daud
Well, we have, you know, other group companies. But I think since this call is specifically for aerospace industries, I limit my answer to RFX industries itself. So if, if you have any other questions on AerofX industry, I’ll be able to answer with regards to the group companies. You know, we can discuss it offline.
Unidentified Participant
So but our management bits will be which will be involved in that managing other companies also. That’s why my question.
Asad Daud
No sir, right now I’m managing Aeroflex Industries.
Unidentified Participant
Okay. Okay sir, thanks for answering and very best wishes for current year. Thank you, sir.
Asad Daud
Thank you. Thank you very much.
Operator
Thank you. Our next question comes from the line of Akshay from again investment. Please go ahead.
Prem Luniya
Hi sir, thanks for taking my question and first of all, congratulations for the great set of number. Sir, specifically for the other business, excluding the speed SME, what type of growth are we seeing in this year? And if you can specify about the EBITDA margins, consolidated ebitda margin for FY27, that would be very helpful.
Asad Daud
Yeah. So in terms of the business. Right. The, the overall growth in the business, I think if you see in this quarter we have grown by almost more than 35%. Right. Our aim is to have a similar, you know, growth in, in the next few quarters as well in terms of our EBITDA margins. You know, last year we had an ebitda margin of 22 and a half percent. I think this year, the full year target is to have an EBITDA margin of around 23% in terms of EBITDA. And our aim is that ultimately over the next couple of years the EBITDA margin should reach to about 25% annually.
Prem Luniya
Okay, sir. And specifically for steel assembly, what type of EBITDA margin currently are we enjoying in skid assembly for data center cooling?
Asad Daud
Will not be able to comment on specific EBITDA margins for specifically skid assembly. Reason being that we are working with just one customer right now, so will not be able to share that on public forum. But I can say that the overall margin for skid assembly is in line with the the average margins of the company.
Prem Luniya
Okay, so the average selling price of first speed assembly, what type of ASP can we expect in this year or the going forward for the next two to three years? Currently for this year we had around 3 point something 3.4 lakh.
Asad Daud
Typically skid assemblies, you know, there’s a wide range, you know, you know, with regards to per skid and like I mentioned, the wide range is because of, you know, because the different data centers have different specifications and different requirements. So I would say if to consider an average, I think a 3 lakh to 3.25 lakh would be an average that we can consider in terms of the average selling price for a skit assembly.
Raman Venkata Kerti
Okay, sir, thank you so much and all the best for the. Thank
Asad Daud
You. Thank you so much.
Operator
Thank you. Our next question come from the line of maitricia from Sapphire Capital. Please go ahead.
Maitri Shah
Yeah, hello, good morning. I’m audible.
Raman Venkata Kerti
Yep.
Maitri Shah
Yeah, so congratulations on the numbers. A few questions from my side on the cooling skid. So you mentioned that we’ll reach close to 60% utilization on the 15,000 capacity by March. So that’s close to a 700 unit number just for the month of March. So how do you see the volumes of skid assembly kind of standing out for FY27 and maybe FY28 as well? If you could guide
Asad Daud
Difficult to give a volume specific number like I mentioned. Right. Skid assembly, you know, right now we are at about. So last financial year, you know, we sold about 617. Right. Obviously the plan for this year is to, you know, obviously we’ve scaled it up to 6,000 and that’s for further scaling up to 15,000 by the next quarter. The idea is like I said, to reach, you know, by March 27th to reach about 60% utilization for that particular Month. Right. That’s the aim that we have right now, obviously.
You know, I think one year is a, is a big time. A lot of things can, you know, change for the good. Right. So last year, same time, we did not, we did not even have skill assemblies as part of our business. Right. We just, we just ventured into it and you know, this year itself, it’s now contributed about 5% of our business. And I think
Raman Venkata Kerti
I expect that
Asad Daud
The contribution of this business in, in the current financial year would be close to, you know, I would say, you know, anywhere between 20 to 20.
Unidentified Participant
I’m sorry, I lost
Asad Daud
20 to 22% contribution of the entire business would be through skit assembly.
Maitri Shah
Okay, okay, that’s great. Also, secondly, on the metal bellows, so you said we had a 8cr revenue figure for FY26. How do you expect that scaling up? Because I think the margins and metal bellows are the best of all of your products currently. So how do you expect that business is going to scale up in the next two years? How much contribution you expect coming from metal bellows specifically?
Asad Daud
Yeah, so yeah, I think this year has at least the start of the year was a bit of a challenge for the metal builders division, you know, specifically, you know, into the fact that we were expecting this business to big business to come in from the US and the tariffs did not, you know, the tariff actually paid as foil sport specifically for the metal bellows business because that was a, you know, new vertical for the company. But if you see that over the past couple of quarters we started to see the traction, you know, we are at an error right now of about, you know, 12 crores right now at an ARR.
We are looking to, you know, to grow that significantly over the next two years so that we reach at least, you know, at least 50 to 60% of our capacity utilization. Metal bellows definitely has the best margins as compared, you know, in relation to all our products. But. In relation to all our products. But the, the, the sales cycle in metal bellows is slightly longer as compared to our other products.
Maitri Shah
Okay. And this 50, 60% capacity utilization will, will you achieve in that the two year time frame? That’s what we are kind of the
Asad Daud
Target. Between two to three years. Yeah.
Maitri Shah
Okay. And the current utilization for metal bellows, the 26 was at what level?
Asad Daud
Very low? I’m not on the exact figures, but yeah, I think extremely low.
Maitri Shah
What sort of revenues could you achieve on the metal bellows side?
Asad Daud
I think at the peak utilization of the metal bellows? I think we would reach about about 80 crores at the top. Utilization,
Maitri Shah
That’s close to 85% utilization.
Asad Daud
Yeah, about approximately.
Maitri Shah
Okay, that’s great. Again, you said that we are targeting the 20, 22% from the liquid cooling. So how do you see the proportion of the business vertical kind of changing? Where do you see the assemblies and the metal builders kind of having a proportionate in the sales going forward? Because this, I think they contributed close to, I think 50 to 53%. So
Asad Daud
Yeah, I think the whole assemblies would. Would continue to contribute the major portion of the business of the company for the next few years for sure, because that’s the core business right now. But you know, we’ll see over the next few years the percentage of contribution of state assemblies would, you know, would increase year on year. And obviously the reason is because that we are expanding our capacity in that particular segment. And this is a segment where we see a huge opportunity being there right now and we want to take the full advantage of that.
So the contribution of skit assemblies would definitely continue to grow to our overall business. But I would say in the next, at least for the next two to say two to three years, I think most assemblies would still be the major contributor to, you know, to the business.
Maitri Shah
Okay, that’s great. And on the skid assemblies, you said you are looking for some global sales. So this will be through the exclusive client we have or are we looking to tie up with another company based in US that is also selling in us? How do you see that kind of panning out? Like I said.
Asad Daud
Yeah, like I said, we right now we have not. We have not, you know, finalized anything. We are, you know, you know, we are open to exploring all opportunities. So right now we don’t have any fixed, you know, plan that we would go only on this route. So right now we are pretty flexible on it.
Maitri Shah
Okay, so this 15,000 capacity, you were sure that. Sorry
Operator
To interrupt you, ma’. Am. You may please.
Maitri Shah
Thank
Operator
You.
Maitri Shah
Thank you.
Operator
Next question come from the line of J. Chauhan from Trinity Asset Managers. Please go ahead. I’m sorry, but the participant has left the queue. We’ll move forward to the next participant. The next question come from the line of Muskan from. Please go ahead.
Unidentified Participant
Hello. Yes, thank you for giving the opportunity. So recently in US they have announced the section 232 tariff. So what is the impact of that on our business?
Asad Daud
So the 232 tariff was, you know, prevalent before as well. But right now on our products, the tariff has been reduced. So with effect from February I think about 15 of 15 on the middle of February approximately. So right now the tariff on our products is, you know, has been lowered. We don’t have any issues with tariffs as I speak.
Unidentified Participant
Yes, but what is the percentage of tariffs currently on our products?
Asad Daud
I think it’s around 15%. I will just double check. I think in the range of between 10 to 15%.
Unidentified Participant
Okay, thank you.
Operator
Thank you. Our next question comes from the line of Prem lunia from Institute Investment Management. Please go ahead.
Raman Venkata Kerti
Hello sir. Congratulations on the numbers. Most of the questions are answered. I just wanted to understand. Can you just react to the complete company guidance for the year both X Bell or X kids and on the basis.
Asad Daud
Well the you know like I mentioned that with regards to the capacities that are, you know coming up right now, I think we, we expect the last quarter we grew at about more than 35% and I think on a yearly basis we expect to, you know, to achieve that kind of a growth primary being that we have significant capacities which will be commissioned at the start of the year and which will help us to scale up the business. Obviously skilled assemblies would play a significant role in that growth naturally because we have, you know we are expanding significantly on that.
So but yeah, you can say about 35 odd percent growth is something that we are looking at.
Raman Venkata Kerti
What would be the contribution for the base business? Base business growth would be around what range?
Asad Daud
Base business growth would be somewhere in the range of about 15 to 20%.
Raman Venkata Kerti
Okay, sure. And I just wanted to know as we are expanding into new products in data center, would it only be products which would be developed in house or maybe we are also looking at some acquisitions to acquire some capabilities.
Asad Daud
We are open to that in India. Right on. There are not many opportunities in companies in this particular space because it’s a very, very new space in India. Internationally there might be but you know we are open to that. Not finalized or not, you know, not finalize anything as yet.
Unidentified Participant
Sure, sure. Thank you so much.
Operator
Thank you. Our next question come from the line of JJ. Chauhan from 3 Net Asset Managers. Please go ahead.
Unidentified Participant
Hello, good afternoon. Thank you for the opportunity. I just had one question sir. I just wanted to understand some mature bellow players seems to operate a materially high EBITDA margins then 2830 that you know, we are targeting. I just wanted to understand is the gap mainly due to product mix, customer qualification, maturity, utilization. I don’t like. I just wanted to understand over the medium term, you know if Aeroflex moves into more mission critical export oem Bellows and assembly. Can the margin profile move above the current 20 or 30% that you’ve guided?
Asad Daud
You know, the margin in metal bellows is like you mentioned, is significantly higher as compared to the whole assemblies in terms of, you know, competitors who, who have a higher scale of business in, in bellows. I think the margins, you know, with them obviously depends first of all on the customer segment that they have. Second of all in which industry that they are supplying it. And obviously, you know, as you know, like in any business, the higher the scale of the business, the higher the margins.
Right. That’s naturally which, you know, which comes with most businesses. So these things are critical factors. Obviously as we move our products into higher, you know, higher end, you know, for example, you know, for example applications such as AI infrastructure, data center, you know, plus also some kind of ancillary to aerospace industries. Definitely margins over there are much higher than, than other, you know, conventional industries.
Unidentified Participant
Makes sense. Basically the industry that we are targeting at the moment, we would, you know, make approximately the margins that you mentioned, 28 to 30%. But obviously if we move to better industry and learning curve according to scale, margins can get better. Right?
Asad Daud
It can get better, but obviously it’s obvious, you know, it depends on the industry that we are entering into.
Unidentified Participant
Got it. Makes sense. Thank you. That’s it from my side.
Asad Daud
Thank you.
Operator
Thank you. Ladies and gentlemen, due to the time constant that was the last question for today, I now hand the conference over to the management for the closing remarks. Thank you. And over to you team.
Asad Daud
Thank you so much. Thank you to everyone who joined the call and if I have not been able to answer anyone’s questions or if you have any further questions that you would like to ask, you can get in touch, you know, with SGA who is our investor relation partner and also you can get in touch with the management to get your queries answered. Thank you so much. I would just like to, you know, also thank the entire team at Aeroflex Industries who have done a great job to achieve, you know, the targets that we had set out at the start of the year, despite the initial hiccups that we had and despite all the geopolitical issues that have happened in this entire year.
So I would like to congratulate and thank the entire team at Aeroflex for the same and just would like to tell everyone that yes, we are in an industry which is at a high growth. We are expanding our capacity and expanding our capabilities every year and we look forward to your support in the future as well. Thank you.
Operator
Thank you so much, sir. Ladies and gentlemen, on behalf of Aeroflex Industries Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.