This thread is intended as a notes taking place for stocks which don’t have a thread of it’s own and perhaps the stock story is not at a stage where they deserve a thread of their own. Typically companies which just released some interesting information in their firs ip/concall/press release etc… Hang on, while i add the stock specific information.
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Few Inferences on Afcom Holdings from publicly available information.
Afcom held it’s maiden call in Nov’24 immediately after listing. One thing is clear by now with benefit of perfect hindsight, that Mgmt. gives very aggressive timelines and guidance.
H1 numbers are with 1 or 2 freighters in operation ??
Company claims to operate 2 freighters on dry lease for H1 of FY26. Those freighters are VT-AFO and VT-AFN as per their presentation.
One can track flights on many pubic sites (like flightradar24, adsbexchange etc). While one could find data for VT-AFO the VT-AFN freighter was almost never seen flying during H1 on these sites. There were some rumors that they had disabled the tracking of this freighter on public sites and there were others who said even people of Elon’s influence can’t disable such tracking, as it’s mandatory. So the argument was that only one flight was operational during H1 and mgmt. is misleading the public that both freighters are operational. Then, there was another rumor that one of the freighter was used only as a backup and hence it never flew !?
In Q1, company published an IP and a press release post Q2 results, which gives us some clues on what might be happening, though questions still remain.
No. of trips in Q1 410. = 4.5 trips/day (410/91 days).
No. of trips in Q2 478 = 5.19 trips/day (478/92 days)
H1 Trips/day = 888/183 = 4.85 trips/day
I have been tracking the flight VT-AFO on and off for much of Q1 & Q2 FY26 and it was indeed making very close to 4-5-6 trips per day with some off days in between (like 1-2 days/week). But i doubt if the average trips/day would come close to 4.85 trips/days.
But the twist in the tale is, since sometime in September/October even VT-AFN data is now available for tracking on the public sites. Does that mean, VT-AFN started flying only from Sep-Oct? Or was the tracking enabled only from that time? Not sure.
In free version in these public sites one can track only past 7 days data. Which tells us, the average trips/day for both freighters (7th -12th December)
VT-AFO : 16 trips/ 6 days = 2.6 Trips/day.
VT-AFN : 26 trips/ 6 days = 4.33 Trips/day !!
Combined :
VT-AFO+VT-AFN : 26+16 trips / 6 days = 7 trips/day
So, data is not very conclusive, but there is a fair chance that VT-AFN has only started operating from H2 and we may be seeing a gradual ramp up in trips/day in H2.
Revenue per aircraft per month
They did about 240 cr. of topline for H1 by doing 888 trips, which is 240 Cr./888 = 27 Lacs/trip.
So, assuming each flight did one trip/day , then the revenue number comes to 8.1 cr. per month (27L*90 days).
This doesn’t match up with their revenue projection per flight per month made in the first call. So by now we know enough to take their projections with pinch of salt.
But the trips in H1 were made with average 13.3 Tonnes/trip. And the projection of 20 Cr./month was with 22.5 Tonnes. So maybe we can cut some slack there.
Guidance of FY26 & Beyond.
Mgmt. guided for 700 Cr. topline for FY26 in the AGM held on 25th Sep’25. I.e., 460 Cr. kind of topline for H2. If the VT-AFN has indeed started operation from H2 and the H1 numbers are with one flight only. Then maybe there is a fair chance for 550-600 Cr. topline for FY26.
If margins are maintained then 125-137 Cr. kind of PAT is a possibility for FY26. So it’s available at a valuation of 16-17 times current year.
Future Plans
Mgmt. is working on the plans for induction of more freighters, as can be seen from various updates on
and fund raise through preferential and QIP.
If they are able to even induct one freighter in full operation for next year, there is a good possibility that its available at a forward multiples of high single digit.
Disc: Invested and transactions in last month. Kindly do your own due diligence. Am not a registered advisor. I might add/exit without notifying.
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In my understanding, Afcom does not own its aircrafts, they operate on a Dry Lease model.
The aviation industry operates almost exclusively on the USD for major capital expenses. For Afcom a large part of their operating costs (Lease, Maintenance) are in USD. Whereas only a small amount of their revenue is in USD (from return flights). The rest is in INR.
With rupee depreciating against the dollar (~7% in last 1 year), their operating cost will increase and that will impact the margins.
Another thing, Afcom’s margin (30%) is inflated because of Ind AS 116. Before 2019, lease payments were treated as Rent (an Operating Expense). If you paid 1 Cr in rent, your EBITDA went down by 1 Cr. Under the new accounting standard (Ind AS 116), companies must capitalise these leases. The lease rent is removed from Operating Expenses. It is moved below the EBITDA line and split into two parts: Depreciation (of the Right-of-Use Asset) and Finance Cost (Interest on lease liability). Since the massive rental cost is no longer subtracted before calculating EBITDA, the EBITDA number looks artificially huge. So INR depreciation will have significant impact on the margin.
Yes. Current batch of aircrafts are leased from https://spectre.aero/
Good Point. Let’s see how this shapes up in Q3.
Can you explain this point in little more detail please.
In this, are you saying the operating cost doesn’t include the lease payments ?
I guess, the amortization of dry lease expenses are surely not the current lease payments.
The Chennai-based cargo airline, Afcom Holdings Ltd, is expanding its fleet by adding a passenger aircraft converted freighter (PTF) by the end of this month.
“With the third freighter from Aeronautical Engineers Inc, US, we will add Dubai as the next international destination,”
Looks like they do not use IND AS 116 accounting. I guess SME companies are exempt from that.
I am still trying to figure out how they are clocking 30% Ebitda margins in air cargo business.
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Just to be clear the monthly revenue calculation has an error. With ₹240 crore from 888 trips, revenue per trip is ₹27 lakh. Since 888 trips over 183 days equals 4.85 trips per day, one aircraft would complete about 146 trips in a 30-day month. At ₹27 lakh per trip, the correct monthly revenue comes to ₹39 crore per aircraft, not ₹8.1 crore.
In this exercise I am trying to evaluate the current earnings of “per aircraft per 1 schedule -with full 22.5 MTT load - per 1 month” VS what mgmt. guided in first con call (see the snapshot i attached in my first post), which is 20 cr with same assumptions. Every part of this assumption is important to evaluate current performance vs guidance.
With the data of 27L/trip as earning I multiplied with 30 (90 days) and arrived at 8.1 Cr. /month.
But I made a mistake. Not the one you pointed out, but a different one. I assumed a trip=schedule. Perhaps mgmt. meant a ‘round trip’ or 2 trips by “schedule”. With that change in assumption, the 8.1 becomes 16.2 Cr.
Also, like i mentioned earlier, this 27L/trip is with just 13.3 Tonnes/Trip. So now, i think Mgmt. guidance in first call is very close to what they are able to achieve in reality. Thanks for your inputs which helped me to fix this aspect.
But of course, like you mentioned, if one aircraft is able to do more than 1 schedule per day i.e., 4+trips/day, (we don’t know for sure if H1 numbers are with 1 aircraft or 2) then the numbers go to what you mentioned.
Hope it’s clear now.
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Afcom Fund raise.
Preferential allotment
12,10,390 Equity Shares at an issue price of Rs. 863.17/- [including a premium of Rs. 853.17/-] for an amount aggregating to Rs. 1,04,47,72,336/-
Convertible Warrants
11,65,000 Convertible Warrants for cash at an issue price of Rs. 863.17/- per Warrant for a total investment amount aggregating to Rs. 1,00,55,93,050 /-
Company now gets 125 Cr. in kitty to purse the next leg of growth. To receive another 75 Cr. on conversion of warrants in next 18 months.
Existing paid-up Equity Share Capital No. of Equity Shares - 2,48,57,706
Share dilution by 9.5% .
Hind Rectifiers (Hirect)
The Future Growth Drivers:(extracted from Q226 Call)
- Core Business : Traction Transformer - 45-50% market share.
- Copper Conductor (Continuously Transposed Conductors - CTC & Enameled paper insulated Copper Conductor - EPICC): Completed backward integration and commercial production of highly specialized copper conductors for transformer industry. It’s very critical product with demand higher than supply in Indian market. This is a raw material for their own traction transformer plus can meet industry demand. This was a bottleneck for Hirect and has now been removed. Total Capex of 56 Cr.
- Acquisition of BeLink (France) : Belink has 4 decades of experience in robotics, electronics manufacturing and power electronic R&D. Doing about 10 Mn EUR and not profitable. Mgmt. has a commitment to fund 1.5 Mn EUR every year for 3 years (working capital support). Belink has a patented product (printed Electronics). Was supplier to Auto Industry and had 30 Mn EUR sales in 2021. Had 300 Mn EUR sales at some point. No debt, inventory, receivable write off etc.. Hirect has taken it from receivership (like Bankrupty?)
- Propulsion Systems: Company has developed propulsion system for locomotives and is scheduled to complete field trial (50k Kms), which should take about2-3 months from start to finish. But it’s already classified as a development source is eligible for participating in orders.
- Capex for FY26: 60 Cr. (34 cr. From term loan and rest from internal accrual). No need for large capex in near future to sustain 20-30% kind of growth rate.
- Exports: Exported a traction transformer to Germany, it’s commissioned and working well. Will export a IGBT transformer to US (unique design). Opens gate for further export orders.
- Compression in gross margins in H1: Attributed to shortage of CTC, which had to be sometimes ailifted from S.Korea & China.
- Appointment of new CEO: A promoter driven (3rd generation) business has appointed an industry veteran Mr. Manoj Nair (ex cummins) to handle India operation. Promoter Mr. Surmya Nevatia to focus on international business and strategy.
Disc: Invested after Q425 results and first concall.
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