Domestic brokerage firm Nuvama Wealth Management has initiated coverage on Aimtron Electronics with a 'BUY' rating and a target price of Rs 2,036. The recommendation implies a potential upside of nearly 47% from the current levels. Nuvama values the company at 40x its FY28 estimated diluted earnings per share of Rs 50.9, citing a structural shift in its business profile and superior financial visibility over the medium term.
Strategic transformation drives high-margin growth
Aimtron Electronics is undergoing a fundamental shift from being a conventional printed circuit board assembly vendor to a full-fledged Electronics System Design and Manufacturing player, Nuvama noted. The company is actively moving up the value chain by focusing on complex box-build solutions and customised automated micro-electronics assembly. This strategic realignment allows Aimtron to operate in the high-barrier industrial B2B segment, where safety-critical applications command premium realisations and offset lower production volumes.
The company's operational trajectory is firmly supported by its expanding order pipeline. Standalone order bookings jumped 176% year-on-year to Rs 521.2 crore in FY26. On a consolidated basis, incorporating its recent North American acquisition, the total order book stands at approximately Rs 604 crore, providing strong revenue execution visibility over the next 12 to 16 months.
Global expansion and domestic capacity additions
To deepen its international presence and establish closer proximity to key global OEMs, Aimtron completed the acquisition of US-based International Control Services for around $8 million, subsequently renaming it Aimtron International Controls. The US unit manufactures high-reliability electronics for major industrial players, including Caterpillar, Deere & Company, and CNH Industrial.
Alongside its global moves, Aimtron is ramping up domestic manufacturing capabilities through a new greenfield facility in Vadodara. The site will feature six surface-mount technology lines, dedicated sheet metal fabrication, and in-house injection moulding. Once fully operational, this facility alone is expected to unlock nearly Rs 500 crore in additional annual revenue potential. The company has also applied for benefits under the central government's Electronics Components Manufacturing Scheme to manufacture optical transceivers for telecom and data center applications.
Upbeat earnings outlook and margin trajectory
Supported by continuous capacity expansion and higher-margin product execution, Nuvama forecasts strong operational momentum for the company. Aimtron is projected to deliver a compound annual growth rate of 60% in revenue, 59% in EBITDA, and 55% in net profit over the FY26-28 period.
Despite these strong multi-year compounding metrics, the stock currently trades at 17.3x FY28 estimated EV/EBITDA and 27.2x P/E. Nuvama notes that the stock currently carries a liquidity and scale discount compared to its larger B2B ESDM peers. However, as Aimtron continues to scale up its revenues and operational footprint, this valuation gap is expected to narrow significantly.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
