Aequs Secures Long-Term Contract from Airbus for Critical Aircraft Components

Aerospace components maker Aequs has secured a long-term contract from European aircraft major Airbus for the supply of critical components for A320 family, A330neo, and A350 aircraft. The 10-year agreement will see Aequs make detailed parts, parts with bench assembly for wings, fuselage, and pylons for these planes.

A Significant Moment for Aequs

Aequs has been a longstanding supplier to Airbus, and the latest supply order from the aircraft OEM comes as a big boost to the company as it sets its eyes on a two-fold increase in its aerospace revenue in the next three years from around USD 100 million at present. Aravind Melligeri, Chairman and CEO of Aequs, said in a statement that the contract is a significant moment in the company's journey with Airbus.

Melligeri added, "We are proud to stand alongside the world's largest aircraft maker as a long-term strategic partner. It is also a testimony to the confidence in Aequs by global OEMs to enter into deeper and longer relationships, particularly at a time when the global supply chain is passing through a recalibration."

Expansion Plans

The Karnataka-based company recently announced raising USD 54 million (Rs 448 crore) in a fresh round of equity funding from a bunch of investors led by Singapore-based Amansa Capital for entry into a new vertical -- consumer electronics and existing operations. Currently, it provides vertically integrated product solutions across the aerospace, toys, and consumer durable goods industries with manufacturing facilities across India, France, and the US.

After expanding into Europe and the US, the focus has now come back to India to grow here, Melligeri said. "We are growing at 30-50 per cent year-on-year on the aerospace side and expecting to grow at 20-30 per cent in the next five years. And through 2030, we have great visibility of the order book. The good part of the aerospace business is that in this we sign long-term contracts," he said.

Aiming to Double Revenue

Melligeri said that Aequs will double its revenue in the next three years in the aerospace side from about USD 100 million. According to him, India's components and assembly side exports from a purely manufacturing perspective, should be around USD 1 billion with components exports estimated at closer to USD 500 million or somewhere in that range.

He believes that this can be used as leverage because India is one of the largest markets today whereas its aerospace export is not in line with whatever it imports aircraft and engines. He added that the government needs to do something on this as it is important that India gets its fair share as a country.

New Vertical - Consumer Electronics

Part of the funds that Aequs raised during the latest round was to support the growth and also to enter a new vertical -- consumer electronics for making precision components for the industry.

Melligeri said, "We are keeping some dry powder for the future opportunities because we have seen significant growth coming out of aerospace. It may accelerate further because Western suppliers are having challenges in manpower availability and cost of capital."

The new vertical leverages the capability that Aequs has built on all these years, Melligeri said, adding, "We make a lot of parts for aerospace with very low volume, but when you get to consumer electronics, it's going to be a few parts, but large volume."

Noting that manufacturing of consumer electronics has historically been focused in China, which is a big market too, he said India is also now opening up as a market and manufacturing also makes sense to do that.