The company, which underwent a dramatic transformation from ICVL Steels Limited to Supremex Shine Steels Limited in 2017, and finally to Aerpace Industries Limited in April 2023, has reported zero net sales across all quarters of FY26. This complete absence of revenue generation, coupled with escalating employee costs and operating losses, paints a concerning picture of a company struggling to execute its strategic pivot to become what it describes as "a national flying system for inter-city and interstate travel."
The quarterly loss of ₹2.47 crores in Q3 FY26 represents a 14.83% sequential deterioration from Q2 FY26's loss of ₹2.90 crores, despite the absence of any revenue. On a year-on-year basis, losses have marginally improved by 3.78% compared to Q3 FY25's loss of ₹2.38 crores, though this provides little comfort given the company's complete lack of operational revenue.
Financial Performance: A Revenue Vacuum Amid Rising Costs
The most striking aspect of Aerpace Industries' financial performance is the complete absence of net sales throughout FY26. In Q3 FY26, the company reported zero revenue whilst incurring employee costs of ₹1.01 crores, up from ₹0.77 crores in Q2 FY26 and ₹0.62 crores in Q3 FY25. This represents a 31.17% sequential increase and a 62.90% year-on-year surge in employee expenses despite generating no income.
| Quarter | Net Sales (₹ Cr) | Employee Cost (₹ Cr) | Operating Loss (₹ Cr) | Net Loss (₹ Cr) |
|---|---|---|---|---|
| Dec'25 (Q3) | 0.00 | 1.01 | -1.86 | -2.47 |
| Sep'25 (Q2) | 0.00 | 0.77 | -2.70 | -2.90 |
| Jun'25 (Q1) | 0.00 | 0.72 | -1.26 | -1.72 |
| Mar'25 (Q4) | 0.00 | 0.75 | -3.42 | -2.76 |
| Dec'24 (Q3) | 0.00 | 0.62 | -1.48 | -2.38 |
| Sep'24 (Q2) | 0.00 | 0.34 | -0.63 | -0.73 |
| Jun'24 (Q1) | 0.00 | 0.05 | -0.92 | -0.71 |
Operating profit before depreciation, interest, and tax (PBDIT), excluding other income, stood at a loss of ₹1.86 crores in Q3 FY26, an improvement from Q2 FY26's loss of ₹2.70 crores but significantly worse than Q3 FY25's loss of ₹1.48 crores. The company's only source of income has been minimal other income of ₹0.02 crores in Q3 FY26, down sharply from ₹0.14 crores in Q1 FY26 and ₹0.19 crores in Q3 FY25.
Depreciation charges of ₹0.55 crores in Q3 FY26 remained stable compared to ₹0.56 crores in Q2 FY26, though significantly lower than the ₹0.90 crores recorded in Q3 FY25. Interest costs have been volatile, ranging from zero in Q3 FY26 to ₹0.27 crores in Q2 FY26, reflecting the company's uncertain capital structure during its transformation phase.
Critical Concern: Zero Revenue Generation
Aerpace Industries has reported zero net sales across all quarters of FY26 and FY25, indicating a complete absence of operational business activity. The company's transformation from a steel manufacturer to an aviation services provider has resulted in a revenue vacuum lasting over 18 months, whilst costs continue to escalate. This represents an existential risk to the company's survival without immediate revenue generation or substantial capital infusion.
Operational Challenges: The Aviation Pivot That Never Took Flight
Aerpace Industries' operational metrics reveal a company in transition limbo. The firm's return on equity (ROE) of just 1.56% ranks amongst the weakest in the iron and steel products sector, reflecting both the loss-making nature of operations and inefficient capital deployment. The company's return on capital employed (ROCE) stands at a deeply negative -12.33%, underscoring the destruction of shareholder value.
The balance sheet as of March 2025 showed shareholder funds of ₹48.69 crores, a substantial increase from ₹12.70 crores in March 2024, driven primarily by a capital infusion that raised share capital from ₹13.67 crores to ₹15.39 crores and transformed reserves from negative ₹0.97 crores to positive ₹33.30 crores. However, this capital raise appears to have been consumed by operating losses rather than deployed towards revenue-generating activities.
Fixed assets increased modestly from ₹4.36 crores in March 2024 to ₹4.86 crores in March 2025, suggesting limited investment in the purported aviation infrastructure. Current assets collapsed from ₹6.41 crores to ₹3.05 crores over the same period, whilst current liabilities surged from ₹1.84 crores to ₹5.32 crores, indicating deteriorating working capital management and mounting operational pressures.
Cash Flow Crisis: Burning Capital Without Revenue
For FY25, Aerpace Industries reported negative operating cash flow of ₹5.00 crores, investing cash outflow of ₹37.00 crores, offset by financing cash inflow of ₹41.00 crores. This pattern reveals a company entirely dependent on external financing to fund both operations and investments, with no internal cash generation capability. The company's cash and cash equivalents stood at a mere ₹0.01 crores, leaving virtually no liquidity buffer.
Industry Context: A Steel Company Attempting Aviation Without Credentials
Aerpace Industries operates in a unique and precarious position. Officially classified in the iron and steel products sector, the company has attempted to pivot entirely to aviation services—specifically positioning itself as "a national flying system for inter-city and interstate travel." This dramatic strategic shift raises fundamental questions about management capability, regulatory approvals, capital requirements, and execution feasibility.
The Indian aviation sector is highly regulated, capital-intensive, and dominated by established players with deep operational expertise. For a company with zero aviation experience, minimal financial resources, and no demonstrated revenue-generating capability in any sector, the barriers to entry appear insurmountable. The company's complete absence of revenue since announcing this pivot in April 2023 suggests that regulatory approvals, operational infrastructure, or market acceptance remain elusive.
In the iron and steel products sector, from which the company has evidently exited, FY26 has been moderately positive with the sector delivering 28.15% returns over the past year. Aerpace Industries' 16.82% decline over the same period represents a stark 44.97 percentage point underperformance, reflecting investor scepticism about the company's transformation strategy.
Peer Comparison: Valuation Disconnect From Fundamentals
| Company | P/E Ratio (TTM) | Price to Book | ROE (%) | Debt to Equity |
|---|---|---|---|---|
| Aerpace Industries | NA (Loss Making) | 8.97x | 1.56% | 0.46 |
| India Homes | NA (Loss Making) | 23.43x | 0.00% | 3.86 |
| Bedmutha Industries | NA (Loss Making) | 3.12x | 68.86% | 1.44 |
| Shah Metacorp | 41.39x | 1.36x | 1.53% | 0.21 |
| Manaksia | 7.79x | 0.66x | 12.76% | -0.53 |
| Riddhi Steel | 43.14x | 4.80x | 8.13% | 1.89 |
Aerpace Industries trades at a price-to-book ratio of 8.97x, significantly higher than profitable peers like Manaksia (0.66x) and Shah Metacorp (1.36x), despite delivering an anaemic ROE of just 1.56%. This valuation disconnect suggests the market may be pricing in speculative hopes for the aviation business rather than current fundamentals. With a market capitalisation of ₹402.49 crores and zero revenue, the company trades at an undefined revenue multiple, making traditional valuation metrics meaningless.
Compared to genuinely profitable steel sector peers like Bedmutha Industries (68.86% ROE) or Manaksia (12.76% ROE), Aerpace's 1.56% ROE highlights the vast gulf in operational efficiency and profitability. The company's relatively low debt-to-equity ratio of 0.46 is one of the few positive metrics, though this reflects more the recent capital raise than prudent financial management.
Valuation Analysis: Speculative Premium Without Justification
Traditional valuation metrics are largely inapplicable to Aerpace Industries given its loss-making status and zero revenue. The company's P/E ratio is not meaningful, whilst its EV/EBITDA multiple of -71.63x and EV/EBIT of -54.22x reflect the negative earnings. The price-to-book ratio of 8.97x appears extraordinarily high for a company with minimal tangible assets and no revenue-generating capability.
The company's enterprise value to sales ratio of 239.91x is based on historical minimal sales of ₹1.00 crore in FY25, making this metric equally meaningless. The stock's current price of ₹26.16 represents a 24.17% decline from its 52-week high of ₹34.50, though it remains 56.65% above its 52-week low of ₹16.70, suggesting continued speculative interest despite deteriorating fundamentals.
Valuation Warning: High Risk, No Visibility
With an overall valuation assessment of "RISKY" and a quality grade of "BELOW AVERAGE," Aerpace Industries presents an unfavourable risk-reward proposition. The company's Mojo Score of just 33/100 with a "SELL" rating reflects deep concerns about financial sustainability, operational execution, and value creation potential. The absence of dividends, institutional holdings, and analyst coverage further underscores the speculative nature of this investment.
Shareholding Pattern: Promoter Reduction Amid Dilution
| Quarter | Promoter % | QoQ Change | FII % | Mutual Fund % | Non-Institutional % |
|---|---|---|---|---|---|
| Dec'25 | 44.74% | -0.19% | 0.00% | 0.00% | 55.26% |
| Sep'25 | 44.93% | -0.42% | 0.00% | 0.00% | 55.07% |
| Jun'25 | 45.35% | 0.00% | 0.00% | 0.00% | 54.65% |
| Mar'25 | 45.35% | -1.25% | 0.00% | 0.00% | 54.65% |
| Dec'24 | 46.60% | — | 0.00% | 0.00% | 53.40% |
Promoter holding has declined steadily from 46.60% in December 2024 to 44.74% in December 2025, with sequential reductions in each of the last three quarters. The cumulative 1.86 percentage point decline over four quarters suggests either dilution from capital raises or promoter stake sales, neither of which inspires confidence. The absence of any foreign institutional investor (FII), mutual fund, or insurance company holdings indicates zero institutional interest, a significant red flag for a company seeking to execute a capital-intensive aviation business.
The promoter group is led by Kaushal Anand Shah (19.61%) and Anand Manoj Shah (18.89%), with the remaining stake fragmented amongst family members and a small holding by Aerpace Robotics Private Limited (0.40%). Positively, there is no promoter pledging, suggesting the promoters have not leveraged their holdings for external financing. However, the steady dilution pattern raises questions about promoter commitment to the transformation strategy.
Stock Performance: Extreme Volatility With Negative Long-Term Trend
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +2.87% | -0.91% | +3.78% |
| 1 Month | -15.53% | -0.97% | -14.56% |
| 3 Months | +32.05% | -1.96% | +34.01% |
| 6 Months | +18.69% | +2.83% | +15.86% |
| YTD | -10.56% | -2.82% | -7.74% |
| 1 Year | -16.82% | +8.78% | -25.60% |
| 2 Years | +189.06% | +15.74% | +173.32% |
| 3 Years | +2181.96% | +37.05% | +2144.91% |
Aerpace Industries exhibits extreme volatility characteristic of micro-cap speculative stocks. The three-year return of 2,181.96% appears impressive but likely reflects the stock's recovery from penny stock levels rather than fundamental value creation. More tellingly, the one-year return of -16.82% significantly underperforms both the Sensex (+8.78%) and the iron and steel products sector (+28.15%), generating negative alpha of 25.60 percentage points.
The stock's beta of 1.50 indicates it is 50% more volatile than the broader market, amplifying both gains and losses. With an annualised volatility of 53.27% over the past year, the stock presents extreme risk for investors. The negative risk-adjusted return of -0.32 over one year, compared to the Sensex's positive 0.77, underscores the unfavourable risk-reward profile.
Technical indicators present a mixed picture. The stock trades below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, suggesting weak momentum across all timeframes. The overall technical trend is classified as "MILDLY BULLISH" as of January 20, 2026, though this follows a prolonged bearish phase. Immediate support lies at the 52-week low of ₹16.70, whilst resistance clusters around the 20-day moving average of ₹27.06.
Investment Thesis: High Risk Without Corresponding Reward Potential
Aerpace Industries' investment thesis is fundamentally challenged by the absence of revenue generation, escalating losses, and an ambitious but unexecuted transformation strategy. The company's Mojo Score of 33/100 places it firmly in "SELL" territory, with below-average quality, risky valuation, flat financial trends, and only mildly bullish technical indicators providing no counterbalance to the fundamental concerns.
The company's attempt to pivot from steel manufacturing to aviation services represents one of the most dramatic sector shifts in Indian equity markets. However, nearly three years after the name change to Aerpace Industries, there is no evidence of operational progress, regulatory approvals, customer contracts, or revenue generation. The aviation sector requires substantial capital, regulatory compliance, operational expertise, and established partnerships—none of which are evident in Aerpace's financial statements or public disclosures.
For the transformation to succeed, the company would need to demonstrate several critical milestones: securing aviation regulatory approvals, establishing operational infrastructure, forming strategic partnerships with established aviation players, raising substantial additional capital, and most importantly, generating revenue. The complete absence of these developments after 33 months raises serious questions about the feasibility of the entire strategy.
Key Strengths & Risk Factors
Limited Positives
- No Promoter Pledging: Zero pledged shares indicate promoters haven't leveraged holdings for debt
- Low Debt Burden: Debt-to-equity ratio of 0.46 provides some financial flexibility
- Recent Capital Raise: Shareholder funds increased from ₹12.70 crores to ₹48.69 crores in FY25
- High Beta for Traders: 1.50 beta offers volatility for speculative short-term trading
- Improving YoY Losses: Q3 FY26 loss improved 3.78% compared to Q3 FY25, though from a very weak base
Critical Concerns
- Zero Revenue: No sales across all quarters of FY26 and FY25—complete operational standstill
- Escalating Losses: Consecutive quarterly losses with Q3 FY26 loss deteriorating 14.83% QoQ
- Unproven Business Model: Aviation pivot lacks evidence of execution, approvals, or partnerships
- No Institutional Interest: Zero FII, mutual fund, or insurance holdings signal lack of confidence
- Declining Promoter Stake: Steady reduction from 46.60% to 44.74% over four quarters
- Negative Cash Generation: Operating cash flow of -₹5.00 crores in FY25 with minimal liquidity
- Weak Quality Metrics: ROE of 1.56% and ROCE of -12.33% indicate value destruction
Outlook: What to Watch For
Positive Catalysts (Low Probability)
- First revenue generation from aviation operations
- Regulatory approvals for aviation services
- Strategic partnership with established aviation player
- Substantial capital raise from credible institutional investor
- Detailed business plan disclosure with execution timelines
Red Flags (High Probability)
- Continued absence of revenue in Q4 FY26
- Further deterioration in quarterly losses
- Additional promoter stake dilution
- Depletion of raised capital without operational progress
- Inability to secure aviation regulatory approvals
- Working capital crisis requiring emergency funding
Investors should monitor Q4 FY26 results closely for any signs of revenue generation or operational progress. The absence of revenue for eight consecutive quarters suggests the aviation business remains in conceptual rather than operational phase. Without substantial capital infusion and demonstrable progress towards revenue generation, the company faces existential risks within the next 12-18 months given its cash burn rate.
The Verdict: Avoid—Speculative Risk Without Fundamental Support
Score: 33/100
For Fresh Investors: Avoid entirely. The complete absence of revenue, mounting losses, unproven business model, and lack of institutional confidence make this an unsuitable investment. The aviation pivot shows no signs of execution after nearly three years, whilst the company continues burning capital with no path to profitability visible.
For Existing Holders: Consider exiting at current levels or on any technical bounce. The 16.82% decline over the past year likely understates the fundamental deterioration. With no revenue visibility, escalating losses, and declining promoter stake, the risk of further value erosion significantly outweighs any speculative upside from the aviation concept.
Risk Assessment: EXTREME RISK. The combination of zero revenue, negative cash flow, unproven business model, and absence of institutional backing creates a high probability of permanent capital loss. The stock's 53.27% volatility and high beta of 1.50 amplify downside risk in adverse market conditions.
Note: ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. The extreme risk profile of Aerpace Industries makes it unsuitable for conservative investors or those seeking stable returns. Past performance, particularly the extraordinary three-year returns, should not be considered indicative of future results.
