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Key management meet takeaways:

We attended AUPS’ Analyst Day and the key takeaways are:

(1) The company’s strategic focus has driven a clear shift toward higher-value IP-led offerings, reflected in revenue per employee increasing from INR 2.9 Mn in FY21 to INR 4.7 Mn in FY26, representing 64% growth.

(2) Future growth in the Transit business will focus on scaling the international AFC business in the Middle East, Asia, and Africa, while diversifying into airport systems, EV charging, and Mobility-as-a-Service (MaaS).

(3) Aurionpro is expanding from data centre consulting and execution into modular infrastructure, cybersecurity and AI services to offer end-to-end solutions.

(4) AUPS is building seven compounding growth engines across Lending, Mobility & Payments, and Enterprise AI, targeting a Serviceable Obtainable Market (SOM) of USD 560 Mn –1.7 Bn by FY30. We maintain a ‘BUY’ on AUPS with a TP of INR 1,250 on the basis of average of FY27E & FY28E EPS, as valuation remains attractive with the PEG below 1x.

Vision 2030: The company reiterates its Vision 2030 that outlines a strategic evolution from a small, diversified services model into a focused global contender within the technology product space. This transition is built upon a pivot initiated several years ago to move away from low-investment services toward building real-scale IP-led global products. They are positioning themselves as a full-stack, AI-native enterprise partner operating as a global contender.

Strategic M&A and Product Innovation: We believe AUPS has strategically deployed its capital to scale its operations. The company has pursued strategic acquisition of smaller companies with strong Intellectual Property (IP) and has made disciplined investments in R&D in areas where it has confidence in building products. This strategic focus has driven a clear shift toward higher-value IPled offerings, reflected in revenue per employee increasing from INR 2.9 Mn in FY21 to INR 4.7 Mn in FY26, representing 64% growth. Growth is further supported by a "land-and-expand" strategy, with 75–80% of revenue generated from the existing customer base

Strong Opportunity in Global Transit Business: The company is targeting a global transit mobility market with nearly USD 1 Tn in Capex. There are over 480 metro projects declared across 56 countries. Both the Automated Fare Collection (AFC) and Smart Mobility solutions market are expected to grow at a ~14% CAGR from FY25-30E. The company has its own manufacturing capabilities across the value stack, differentiating itself from competitors. There is a significant shift towards SaaS-based transit models, where any token (card, phone, etc.) is linked to a bank account, moving the intelligence from hardware to the back-office software. Future growth will focus on scaling the international AFC business in the Middle East, Asia, and Africa, while diversifying into airport systems, EV charging, and Mobility-as-a-Service (MaaS).

Expanding the Data Centre Ecosystem: The industry is moving from traditional racks (4–5 kW) to high-density racks requiring 70 to 200 kW to support AI workloads. To capitalize on this shift, the company is expanding its data centre ecosystem. In addition to its existing capabilities in design consultancy and project execution, it plans to manufacture modular products in-house by leveraging the manufacturing expertise developed through its transit products business. The company is also expanding into cybersecurity and hybrid AI services. We believe that expanding its presence across these five segments will enhance its ability to offer various solutions, thereby increasing average deal sizes and driving stronger growth over the medium term

Long-Term Targets: The company’s long-term targets by FY30 are as follows:

* Rule of 50: As the product business reaches maturity over the next decade, the company aspires to achieve a "Rule of 50+" metric, where the sum total of growth and margin exceeds 50. * Return on Capital: The company targets a long-term return on invested capital to be more than 20%

* Recurring Revenue: The company aims for high levels of ARR of ~85% while NRR rate is expected to be more than 100%

View: Aurionpro's Analyst Day reinforced our positive view on the company's long-term growth potential. The company is well positioned to benefit from multiple structural growth themes including AI-native software, transit digitisation and data centre infrastructure, while its strategy of owning a larger share of the value chain across key businesses should support higher deal sizes, stronger margin and improved return ratios.

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