India Aerospace & Defense Field Trip Days 2,3 and 4 highlights

Equity Research 24 August 2026 | 6:23AM IST

India Aerospace & Defense: Field Trip Days 2,3 and 4 highlights: Expanding capabilities; enhancing footprint

3 days, 3 companies. We visited: 1) Triveni Turbines to gain insights into one of the Amit Dixit | critical end-user markets of precision machined components - turbines - and growth Goldman Sachs India SPL

areas that the company is witnessing; 2) Aequs Ltd. to get insights into their Kumari Rishika | Aerospace business and expansion plans; and 3) Balu Forge to gain insights into their Goldman Sachs India SPL evolution from auto ancillary company to an Aerospace and Defence player. Triveni Turbines, Aequs Ltd. and Balu Forge are all Not Covered.

Our visit to the three companies reinforced our view that precision component machining space in India is likely to grow 4-5x until FY31E with companies set to gain from the China+1 factor. The critical success factors per the management of the companies we visited are reliability of supply, zero rejects, and quality of products, rather than cost or labour arbitrage. Among coverage companies, we believe PTC Industries and Azad Engineering (both Buys) are likely to benefit from the increasing TAM of the precision machining segment in the global aerospace and energy space.

Triveni Turbines n Exports have increased materially, rising from 30% of sales in FY22 to 58% in FY26, reflecting stronger international traction. n Product sales dominate the revenue mix at 73%, while refurbishment contributes 27%; management expects refurbishment demand to recover and plans to dedicate the Peenya facility to this segment. n The company has turbine manufacturing capacity of 150 units at Peenya and 350 units at Sompura. n Triveni Turbines is executing India’s first 160 MWh CO2-based long-duration energy storage system project at NTPC Kudgi, Karnataka, with Energy Dome. n The NTPC Kudgi project has entered advanced construction and includes indigenous manufacturing of specialised CO2 turbines by Triveni Turbines. n The company is executing a European order involving re-engineering, manufacture and supply of high-, intermediate- and low-pressure rotors for a 344 MW three-cylinder reheat turbine. n Order booking stood at INR 23.3bn in FY26, indicating healthy business momentum. n Triveni successfully completed re-engineering, supply, installation and

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Goldman Sachs India Aerospace & Defense

commissioning of high-pressure turbine rotor components for 2x210 MW nuclear power units, commissioned in February 2026. n Outsourcing has increased significantly: in-house activity has reduced from around 80% five years ago to 30–40% critical value addition currently. n Lead times have improved from 8–9 months five years ago to 3–3.5 months currently, with Kaizen initiatives targeting assembly time of 21 days versus 70–75 days now and packaging time of 5 days versus 15 days now.

Exhibit 1: Triveni Turbines: Key Financials

Triveni Turbines FY21 FY22 FY23 FY24 FY25 FY26 Net sales 7,026 8,522 12,476 16,539 20,058 21,811 EBITDA 1,476 1,627 2,338 3,188 4,367 4,503 EBITDA Margins 21% 19% 19% 19% 22% 21% PAT 1,025 2,702 1,925 2,692 3,572 3,497 PAT Margins 15% 32% 15% 16% 18% 16% ROE PE Source: Company data

Aequs Ltd n Global aerospace OEMs are increasing outsourcing to India, driven by supply-chain diversification and “dollarization,” where sourcing from USD-linked supply bases helps reduce currency impact. n Management highlighted quality and delivery as the top priorities for aerospace customers; tariffs are not a major concern as they are passed through. n Aerospace contributed 81% of Q1FY27 revenue, with Airbus, Boeing, Safran, Collins Aerospace and SAAB…