Hello folks, this is my first thread on this forum. I invite all the respected seniors like @phreakv6 ,@hitesh2710 , @rupaniamit , @harshitgoel etc and everyone else to go though it and share their views on my analysis and the company.
Looking forward to hearing from you guys.
Company Overview
Aimtron Electronics is an India-based EMS (Electronics Manufacturing Services) SME specializing in high-precision PCB design, assembly and box-build integration. It offers end-to-end solutions—from initial PCB design through to fully assembled electronic systems (including EV battery management systems)—for global OEMs in IoT/Robotics, MedTech, industrial, telecom, aerospace/defence (drones), power and other sectors.
Key Facts
- Manufacturing & R&D: Two plants (Vadodara, Gujarat; Bengaluru, Karnataka) plus R&D/design centers in both locations.
- Incorporation & Listing: Founded 2011 (Pvt. Ltd.), converted to public in October 2023 via SME IPO.
- Promoters: Mukesh J. Vasani, Nirmal M. Vasani, Sharmilaben L. Bambhaniya.
- Revenue Growth: FY23 +217%, FY24 +11%, FY25 +71%.
Product Portfolio
Key Concerns & Clarifications
- SME Status & Governance
- As an SME, some investors worry about governance risks.(Nuvama Analysts also visited company’s Vadodara facility and interacted with the mgmt, which also raises investor confidence in the company.
- We performed extensive checks (audit reports, SEBI filings, related-party disclosures) and found no material red flags—but no audit can ever guarantee zero risk.
- Inter-corporate Loans: Advances to related parties exist (e.g., Aimtron Electronics LLC, Texas), accounting for ~20% of FY25 revenue. These are disclosed and ring-fenced, but warrant monitoring.
List of Related Parties (From AR)
Accounting Policy Changes
- In H2 FY25, the company revised certain accounting policies, affecting margin comparability both half-on-half and year-on-year.
- Management states these changes better reflect the business’s true economics; disclosures adequately explain the rationale.
Receivables Spike & Cash-Flow
- Receivables rose sharply in FY25 due to clients delaying payments and asking for early delivery amid US-tariff uncertainty, though ~50% of the March 31 balances have since been collected.
- Management highlights a zero-debt balance sheet, which should ease working-capital funding despite higher receivables.
US Tariff Uncertainty
- With ~60% of revenue from the US, tariff changes pose a risk.
- Management argues that “China + 1” supply-chain strategies will favor Indian EMS players, cushioning Aimtron against tariffs.
Investment Thesis
- FY25 Revenue: ₹158 Cr
- Current Capacity: Supports ₹450–500 Cr topline without further capex.
- FY26 Guidance: ₹270–280 Cr (we believe 300 Cr+ is achievable).
- Order Book: ₹189 Cr at FY25 end (up from ₹135 Cr in H1); additional orders in April push it to ~₹275 Cr.
- Enquiries: ₹800–1,000 Cr pipeline; win rates of 20–40%.
- Growth without Capex: At a ~50% CAGR, no new capex required until mid-FY27. Post-FY27 growth may need debt or equity infusion.
- Financial Model (FY26–28):
- Assumes 3.5% depreciation of revenue, 100 Cr debt @10% interest to fund growth.
- Projects FY28 revenue ₹607 Cr (50% CAGR) and PAT ₹72 Cr.
- Valuation Upside:
- At current ~50× P/E, FY28 P/E falls to ~17×.
- Even using conservative exit multiples (35×–65×), investors could see 2× returns over 3 years in a bear-case scenario.
Anti-Thesis Pointers
- High EBITDA Margins vs. Peers
- FY25 EBITDA margin fell to 21% (from 25% in FY24) due to mix shifts.
- While peers like Cyient DLM and Avalon report ~9%/5% EBITDA/PAT, Aimtron’s high margins may be difficult to sustain at rapid growth rates.
- Scalability Constraints
- To maintain ~50% growth beyond FY27, Aimtron must raise capital. Promoters prefer minimal dilution, so debt may increase leverage and risk.
- Niche manufacturing expertise may limit rapid scaling.
- Raw-Material Sourcing Risks
- ~70% of RM is imported. Geopolitical or logistical disruptions could significantly impact operations and margins.
Final Verdict
The Indian EMS sector enjoys strong tailwinds—government incentives, China + 1 shifts, rising domestic demand and competitive labor costs. Aimtron combines these secular trends with best-in-class profitability and a clear growth path. While governance and related-party loans merit watchfulness, no major red flags have emerged.
At present valuations, Aimtron offers an attractive risk-reward profile. Its growth targets appear achievable with existing capacity, and even conservative cash-flow projections imply multi-bag returns over three years. Investors should, however, monitor receivable collections, tariff developments, and capital-raising plans closely.
Disclosure:
For complete disclosure I am not currently invested in the company, but am thinking strongly about buying the stock. But this is not a buy or sell recommendation, kindly do your own research.
10 Likes
Good, very thorough analysis. Thanks for posting!
What’s the rationale for expecting Aimtron to trade at such high (35-65x) forward P/E multiples by end of FY28?
Obviously current multiples are based on very high growth rates (50% CAGR at current margins) for the next 3 years.
The only reason you’d see multiples in 35-65x range three years later if FY29-31 expected growth is again 50% over next 3 years with the current margins preserved.
But three years later, the whole China + 1 thing will have played out (or festered out) so I am not sure if it would be reasonable to expect a similar outlook for FY29-31 as FY26-28.
Also, have they shared any information on what their revenue split looks like across products?
6 Likes
I had the similar growth concerns and sustainability of current margins too. I had the opportunity to attend one of their concalls, but I lack the conviction due to the fact that, the company operates in a stiff competitive environment. As of now, the only plus point for this company seems to be sector tailwinds.
4 Likes
Segment revenue for H2FY25: PCBA – 70%, Box-Build – 27%, and End-to-End Solutions – 3.5%.
As Aimtron’s major revenue is from Industrial & Robotics, they can keep up with the margin (with minimal dilution) while making growth, provided they keep getting good orders with similar revenue split.
Growth FY25 revenue stands at INR 159 Cr, up 71% from FY24, against a guidance of INR 135 Cr (45%)
Company is targeting a 40–50% CAGR for the next 3 to 5 years and has an order book of INR 189 Cr as on 31st Mar 2025 +128 Cr order received on April 24, 2025, in Network
Security for a turnkey box-build project, over and above the stated
order book = 317 cr order book, while remaining a zero-debt company as of 31st Mar 2025.
First of all apologies for the late reply. Secondly, my rationale for taking an exit multiple range of 35-65x was based on the fact that even if they do 50% CAGR in revenue their revenue in FY28 would be around 600-650Cr. Now if you look at the size of opportunity and the industry growth rates, that number is not a very significant market share. The industry is itself growing at a CAGR of ~20-25%. What I feel is even beyond FY28 even if the growth slows down it won’t slow down too much(given the mgmt does CAPEX and prepares for growth). I feel that the company could still be growing at 20-25% CAGR beyond FY28 for a few years. I might be wrong in this thinking, but it’s something I feel given the strong tailwinds in the Industry. If you look at the peers (Avalon, Vinyas, Syrma etc) everyone trades at a much higher multiple than Aimtron. Although two major risks that I see in the business is whether these high margins will hold or not maintaining such high growth rates. Also the corporate structure seems very complicated with a lot of related party transactions which gives the mgmt more leeway to commit various shenanigans.
So that is a call one has to take.
3 Likes
Thanks @Vansh_Dhelia for starting this thread. When I was building my position, there was very little information available. However, after the H2 FY25 earnings call, more details became clear, and this thread has been a great source of shared learning.
- For anyone who needs it, here’s the video link to the H2 FY25 call: https://www.youtube.com/watch?v=UHt2Ov9UX1c
- The management has promised greater transparency and improved documentation as they target a migration to the main board—let’s see how that unfolds
- Also, post-results, cash flow seemed to be a major concern. That might explain why, despite strong H2 performance, the stock price didn’t moved much.
2 Likes
It’s a good sign that the management is taking investors advice seriously and has provided a clarifying document as promised.
Doc Link: https://nsearchives.nseindia.com/corporate/AIMTRON_18062025151110_Business_Update.pdf
3 Likes
it’s unclear why this allotment wasn’t extended proportionally to all shareholders, based on their current holdings, to ensure a more equitable structure. https://nsearchives.nseindia.com/corporate/AIMTRON_14072025223415_Reg_30_Issuance_of_securities.pdf
It’s important to ask was debt financing considered as an alternative to this preferential allotment?
2 Likes
I remember in the last call mgmt saying that they won’t raise further equity…and then they go on with this move!
I mean they were gung ho on raise debt over equity and end up doing this. So that’s a bit if concern, but not that material tho!
2 Likes
@Vansh_Dhelia They have diluted equity at the expense of minority shareholders, with promoters and insiders appearing to be the primary beneficiaries.
Earlier today, I sent them an email with three key questions:
- How was the price of ₹666 per share determined?
- Why was the offer not extended proportionally to all existing shareholders?
- Why did the company choose equity over debt for this funding round?
4 Likes
I totally agree with you on that, that’s a big governance concern towards the retailers. It was just outrageous to issue shares at such high discount and even the option was not available to the retailers, but this is the problem minority shareholders will always face in the listed companies, its a sad reality!
Till one is a small player he/she will always be run over by such management!
1 Like
Pref price as per sebi guidelines last 90 days moving average.. i guess.
You can run a query on this in ChatGPT. Price is around that range
Chat gpt answers for pref price queries:
Here’s a breakdown of Aimtron Electronics’ volume-weighted average price (VWAP/VWMA) and related moving average insights:
VWAP Highlights
Based on Moneycontrol data (as of July 8, 2025):
5‑day VWAP: ₹695.14
10‑day VWAP: ₹691.95
20‑day VWAP: ₹670.73
50‑day VWAP: ₹654.79
100‑day VWAP: ₹625.78
200‑day VWAP: ₹620.28
Current share price (~₹742.75) is well above all these VWAP levels, indicating strong upward momentum .
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