Snowball Effect 📈

Pine Labs Q2FY27 Results Q2FY27 Financial Performance - REV🔼24% YOY - Rs. 806 CR EBITDA🔼27% YOY - Rs. 155 CR EBITDA margin: 19.2% vs 18.8% in Q2FY26 PAT grew by 6x - Rs. 39 CR Contribution margin 🔼18% YOY - Rs. 587 CR Pine Labs operates across two broad platforms: Digital Infrastructure & Transaction Platform (DITP) => In-store and online payment acceptance => Flow, affordability and transaction processing => Fintech infrastructure and data APIs Issuing & Acquiring Platform (IAP) => Prepaid and other card issuance => Processing and distribution => Corporate gifting, employee benefits and mobility Q2FY27 Revenue Mix - => DITP: Rs. 532 CR; +21% YOY => IAP: Rs. 275 CR; +31% YOY DITP contributes approximately 66% of revenue, while IAP is growing faster. The combination gives Pine Labs exposure to both merchant payment infrastructure and expanding prepaid/issuing use cases. Pine Labs reported: => 22.3 lakh Digital Checkout Points (+17% YoY) => 11.6 lakh merchants (+13% YOY) => Mid-market DCP growth of 49% YOY => Subscription revenue at 27% of total revenue => 29%+ of DITP GTV monetised through Flow, Affordability and Online Payments, versus 18% a year ago 👉The strategy is moving beyond installing payment terminals. It is about generating more revenue from each merchant through additional services. Platform GTV reached approximately Rs. 4.45 lakh CR but overall GTV grew only around 5% YOY. However, excluding Fintech Infrastructure, GTV reached Rs. 2.66 lakh CR, growing 31%. Fintech Infrastructure GTV was Rs. 1.79 lakh CR, while transactions in that business grew 33%. UPI Is a Major Growth Engine UPI-related metrics: • Over 70% of DCP transactions are UPI-led. • UPI GTV grew 77%+ YOY. • Monthly UPI GTV was approximately Rs. 20,000 CR. • Management targets Rs. 33,000–34,000 CR monthly UPI GTV in FY28 Pine Labs is also planning approximately 10 lakh QR soundbox deployments over the medium term. Management sees an opportunity from the proposed MDR framework for eligible UPI merchant transactions above Rs. 2,000. Over 65% of Pine Labs' UPI GTV comes from transactions above Rs. 2,000. The company expects to earn its share through acquiring-bank partners if the framework is implemented. Online Payments Is Scaling Rapidly Online payments delivered revenue growth of 45% and GTV of 140% YOY. Growth opportunities include: • Cross-border payments • SMB commerce • Government payment corridors • Agentic commerce International Expansion Pine Labs operates across 22+ markets. Key Highlights: => Southeast Asia revenue grew approximately 40% YOY. => International DCPs in Southeast Asia increased 2.7x. => UAE daily transactions crossed approximately one lakh. => Credit processing operates across 17+ markets. AI and Agentic Commerce Pine Labs is investing in AI-led commerce infrastructure. 👉Key developments - => A live autonomous agentic transaction demonstrated on BigBasket. => An Agent Toolkit for automating merchant workflows. => Cross-border import payment capabilities. => AI adoption across internal engineering and operations. Management says approximately 89% of code changes are contributed by AI agents. More importantly, 14% of quarterly revenue came from products launched within the previous two years. Cash Flow and Balance Sheet Operating cash flow reached Rs. 350 CR, versus Rs. 152 CR a year ago. Management attributed the improvement to working-capital discipline and favourable early-settlement balances. 👉Other highlights: => Net working capital stood at 14% of annualised revenue. => Management targets a 13–15% range. => Net cash stood at approximately Rs. 2,345 CR. => Pine Labs acquired Shopflo for Rs. 88 CR, including deferred consideration Pine Labs is evolving from a payment acceptance and issuing platform into a broader commerce infrastructure business. The next phase of the investment story depends on converting transaction growth, new products and merchant relationships into durable earnings and cash flow. 🟥Disclaimer: Invested. This post is for informational and educational purposes only.

Aeroflex Industries Q2FY27 Results - Aeroflex Industries manufactures metallic flexible flow solutions used to safely transfer liquids and gases across industrial applications. Its products are used in oil & gas, chemicals, pharmaceuticals, bulk terminals, fire protection, HVAC, defence and data centres. Aeroflex earns revenue by manufacturing and selling four broad product categories: => Stainless-steel flexible hoses => Hose assemblies and fittings => Liquid-cooling skid assemblies => Metal bellows Its competitive positioning relies on engineering expertise, product quality, customisation and customer relationships rather than simply selling standard commodity products. Q2FY27 Financial Numbers - REV 🔼87% - Rs. 207.36 CR EBITDA🔼94.49% - Rs. 50.34 CR EBITDA margins: 24.27% vs 23.3% in Q2FY26 PAT🔼156.85% - Rs. 36.56 CR PAT margins: 17.60% vs 12.82% in Q2FY26 H1FY27 Numbers - REV 🔼80% - Rs. 352 CR EBITDA🔼102.68% - Rs. 83.83 CR EBITDA margins: 23.77% vs 21.19% in H2FY26 PAT🔼158.65% - Rs. 55.35 CR PAT margins: 15.65% vs 10.93% in H2FY26 👉Aeroflex changed its depreciation method from Written Down Value (WDV) to Straight Line Method (SLM), effective April 1, 2026. The company says the change reduced H1FY27 depreciation expense by Rs. 8.41 CR. Its illustrative comparison shows: => Reported H1 PAT under SLM: Rs. 55.35 CR => Illustrative H1 PAT under WDV: Rs. 47.12 CR The change does not affect EBITDA. Therefore, the improvement in operating profit and EBITDA margin is more informative than the headline PAT growth alone. Product mix: A diversified revenue base Aeroflex's Q2FY27 product mix: => Assemblies and others: 41% => Stainless-steel flexible hoses: 35% => SFN liquid-cooling skid assemblies: 24% Company is adding a new growth vertical alongside established industrial application Domestic vs Exports Domestic revenue grew 178% YOY in Q2FY27 and 52% growth in exports. The export share of revenue declined from 74% to 60%. Management highlighted encouraging demand in the US and Europe, with ports and terminals emerging as important contributors. Liquid-cooling skid sales are scaling rapidly Reported liquid-cooling skid assembly sales: => Q3FY26: Rs. 2.29 CR => Q4FY26: Rs. 18.94 CR => Q1FY27: Rs. 32.39 CR => Q2FY27: Rs. 50.03 CR Volume increased from 1,040 skids to 1,475 skids, while average realisation increased from ₹3.11 lakh to ₹3.39 lakh per skid. Aeroflex describes its liquid-cooling solutions as compact, engineered assemblies designed for coolant distribution within data-centre environments. The product proposition includes: • Plug-and-play installation • Reliable, leak-resistant operation • Efficient heat dissipation • Space-efficient layouts The business can benefit from rising cooling infrastructure requirements as AI and high-performance computing expand. Capacity expansion: Preparing for demand Aeroflex has completed expansion to: => 20 million metres per year of SS flexible hoses => 12,000 liquid-cooling skids per year Skid capacity is targeted to reach 15,000 pieces annually by December 2026. By March 2028, the company plans to reach: => 30 million metres of flexible hoses => 30,000 liquid-cooling skids annually 👉The plan aims to accommodate higher volumes and a richer value-added product mix. Capex Opportunity The next expansion phase involves approximately Rs. 202 CR of capex. Management estimates potential incremental peak revenue of ₹500–550 Cr from the expanded capacity. 👉Need to monitor commissioning, utilisation, margins, customer demand and returns on capital Hyd-Air Engineering merger Aeroflex has announced the proposed merger of Hyd-Air Engineering with itself, subject to necessary approvals. The stated objectives include: • Better utilisation of infrastructure • Reduced operational overlaps • Lower administrative and compliance costs • Improved resource allocation • Greater in-house engineering flexibility 👉The merger could improve efficiency, but should monitor approval timelines, integration costs and measurable financial benefits. The company has also received an Indian patent for a system that automatically generates 3D CAD models of braided hose assemblies. This supports its engineering and product-development capabilities, although the presentation does not quantify the patent's direct financial contribution. Risks to monitor => Working-capital absorption and cash conversion. => Execution and utilisation of the Rs. 202 CR expansion plan. => Sustainability of liquid-cooling demand and customer orders. => The impact of depreciation methodology on reported earnings. => Export demand, customer concentration and the ability to maintain margins as volumes scale. Aeroflex is showing strong operating momentum, improving EBITDA margins and a rapidly scaling liquid-cooling business. The next phase depends on disciplined capex execution, customer demand, cash conversion and sustainable returns on capital. 🟥Disclaimer: This post is for informational and educational purposes only.