Aequs jumps 5% as Nuvama sees up to 91% upside for the smallcap defence stock

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Aequs shares rose more than 5 percent on Tuesday after Nuvama Institutional Equities initiated coverage on the stock with a 'Buy' rating and a 12-month target price of Rs 444 per share, implying an upside of over 91 percent from the previous session's closing price.

The stock settled at Rs 244.11 pe share on the NSE, up 5.27 percent. During the session, it climbed as much as 6.37 percent to an intraday high of Rs 246.66 after opening with a gap-up of 2.63 percent.

Aequs also emerged as the top gainer in the Nifty India Defence index, which ended 1.65 percent lower. It was among only three stocks in the index to close in the green, along with Zen Technologies and Dynamatic Technologies. The remaining constituents in the defence index ended lower.

Initiating coverage on the company, Nuvama said Aequs is India's only vertically integrated aerospace Special Economic Zone (SEZ) supplying machined aerostructures, landing gear and engine parts to original equipment manufacturers (OEMs) such as Airbus and Boeing.

The brokerage described Aequs as India's first pure-play aerospace precision manufacturer and said its order book of about Rs 7,600 crore provides visibility for a 42 percent sales CAGR and 84 percent EBITDA CAGR during FY26-FY29.

It said the company's manufacturing ecosystem covers machining, forging, surface treatment and assembly, while its portfolio of 5,654 stock-keeping units strengthens its business moat.

According to Nuvama, the long operating life of aircraft programmes supports long-term revenue visibility for qualified suppliers. It noted that Boeing's 737 programme has been running for 58 years, while the Airbus A320 programme has been in operation for 38 years.

The brokerage also said Aequs' focus on engine components, supported by a Rs 1,900 crore memorandum of understanding with the Tamil Nadu government to develop India's first integrated aero-engine ecosystem, strengthens its growth prospects.

On the consumer electronics business, Nuvama said the segment is currently loss-making, with a gross block of Rs 830 crore operating at 23 percent capacity utilisation.

The brokerage also expects the consumer electronics business to outperform the company's other segments over time, supported by the appointment of MR Ravi Kumar Assudani, who was associated with Apple for 16 years, as head of engineering.