Confidential Information Summary
Sale of 100% equity in a licensed light-aircraft manufacturer, southern India · Blind, pre-NDA · CA Dhiraj Ostwal & Co. — Transaction Advisory
Executive summary
Skylark designs, assembles and builds light sport aircraft and related products in a leased unit in southern India. Its position rests on a manufacturing approval that management says covers microlight aircraft and powered hang gliders.
Gross margin rose from 20.6% to 34.3% over FY22–FY25, but EBITDA is thin at 4.4% because family remuneration of ₹63.6 lakh exceeds EBITDA of ₹22.7 lakh. The promoter, the sole shareholder, offers 100% of the equity and all four directors exit.
The seller's own materials quote higher margins than the audited accounts show. This document uses the audited accounts only.
At a glance
Basis of preparation. Audited standalone accounts, reported figures, ₹ lakh, EBITDA before other income, depreciation and finance cost. FY25 is the latest audited year, signed 22 September 2025.
The balance sheet is 18.5 months old; FY26 closed on 31 March 2026 and is not covered here. The order book and FY26 sales are management's, unaudited.
Investment highlights
Margin has moved up three years running
Gross margin was 20.6%, 29.4%, 30.4% and 34.3% from FY22 to FY25.
34.3% FY25 gross marginLicensed manufacturing position
Management states the company holds a regulator's manufacturing approval for two aircraft categories; the certificate comes with the data room.
2 licensed categories, management-statedOne in-house product line
Wooden and carbon propellers for sport aircraft, UAVs and target drones are made in the unit rather than bought in.
50+ propeller varieties, published rangeSelf-funded, profitable since FY24
EBITDA turned positive in FY24 with no bank debt and no working-capital line, per the auditor's report.
EBITDA ₹18.8 L → ₹22.7 LOrder cover and a clean handover
Management reports an order book equal to 55% of FY25 revenue; the owner family exits fully.
₹2.85 Cr order book, unauditedBusiness overview
The company sells a broad catalogue, but only part of it is built from raw material in the unit. Imported engines, wings and kits are assembled or resold alongside.
Microlight aircraft and powered hang gliders
Kit-built and licensed-design assembly, shipped worldwide.
Paramotors and trikes
Stainless-steel trike frames fitted with imported engines and wings.
Propellers
UAV, target-drone and sport-aircraft propellers; the one proprietary line.
Servicing and spares
Maintenance and spares for armed-forces and cadet users, per management.
R&D and job work
Projects for defence research laboratories and custom turbines, per management.
Trading
Wings, engines, spares and accessories bought in and resold.
Business model & economics
Aircraft are built to order and customers pay part of the price in advance. Servicing, spares, trading and R&D are not reported separately in the accounts.
97.4% of revenue, down 4.5% on FY24.
2.6% of revenue; FY22 was ₹55.0 lakh.
Domestic and export only; product split comes post-NDA.
Customer advances swung between ₹8.9 lakh and ₹68.9 lakh across four year-ends, so order timing drives cash more than profit does.
| FY22 | FY23 | FY24 | FY25 | |
|---|---|---|---|---|
| Receivable days (on revenue) | 10.5 | 24.1 | 2.2 | 16.7 |
| Inventory days (on COGS) | 11.9 | 24.4 | 26.1 | 29.8 |
| Payable days (on purchases) | 44.6 | 38.5 | 48.2 | 38.3 |
| Cash cycle before advances | (22.2) | 10.0 | (19.9) | 8.2 |
| Customer advances, ₹ lakh | 68.9 | 8.9 | 61.9 | 28.7 |
Customer mix & concentration
Management names three customer groups: sport flyers, institutional users in the defence ecosystem, and trade accounts for wings, engines and spares. Repeat institutional demand is said to come from servicing and spares.
No customer-level data exists in the files supplied. The masked top-twenty customer table, concentration tiers and revenue by customer type will be released in the data room. Nothing is estimated here.
The audited accounts show channel only: 97.4% domestic, 2.6% export in FY25. Between FY24 and FY25 domestic sales fell ₹23.6 lakh and exports rose ₹9.0 lakh.
The base, in numbers
What a buyer should test
Whether a few large orders drive revenue; the audited ledger cannot answer this, and the customer-wise sales register will.
Financial snapshot
Revenue grew to FY24 and slipped in FY25, while profit after tax stayed small in every year.
Revenue CAGR is 6.8% over FY23–FY25; the 15.5% FY22–FY25 figure includes a year affected by a demerger.
| FY22 | FY23 | FY24 | FY25 | |
|---|---|---|---|---|
| Revenue from operations | 334.8 | 451.6 | 529.8 | 515.2 |
| Cost of goods sold | 265.9 | 319.0 | 368.7 | 338.3 |
| Employee cost | 36.9 | 94.9 | 106.0 | 110.4 |
| Admin and other | 31.0 | 37.8 | 36.4 | 43.7 |
| EBITDA | 1.0 | (0.2) | 18.8 | 22.7 |
| Other income | 11.1 | 25.8 | 3.4 | 0.8 |
| Depreciation and finance cost | 15.3 | 9.6 | 11.6 | 8.6 |
| Profit before tax | (3.2) | 16.1 | 10.6 | 14.9 |
| Profit after tax | (2.5) | 11.5 | 7.7 | 11.0 |
Balance sheet, 31 March 2025, ₹ lakh
Weakest metric: net worth of ₹(46.3) lakh. Current ratio is 0.57, and debt-like items of ₹90.6 lakh (director loans, employee payable, customer advances) sit against cash of ₹6.4 lakh.
Quality of earnings
EBITDA here is revenue less cost of goods sold, employee cost and admin and other expenses, with no add-backs taken.
Gross margin gained 13.8 points from FY22 to FY25 but EBITDA gained only 4.1, because employee cost rose from 11.0% to 21.4% of revenue once family pay entered the books.
| FY22 | FY23 | FY24 | FY25 | |
|---|---|---|---|---|
| COGS | 79.4 | 70.6 | 69.6 | 65.7 |
| Employee cost | 11.0 | 21.0 | 20.0 | 21.4 |
| Admin and other | 9.3 | 8.4 | 6.9 | 8.5 |
| EBITDA | 0.3 | (0.0) | 3.5 | 4.4 |
| Family remuneration, ₹ lakh | n/a | 37.8 | 51.7 | 63.6 |
| EBITDA before family remuneration, ₹ lakh | n/a | 37.6 | 70.5 | 86.3 |
Cash and leverage, ₹ lakh
Perimeter and recency
Accounts are standalone; no subsidiaries are reported. FY22 carries a ₹137.1 lakh demerger receivable collected in FY23. The latest balance sheet is 18.5 months old, and FY26 accounts are outstanding.
Related-party transactions are limited to four directors' salaries; the family board is the only related-party cost disclosed.
Management & organisation
Four family members form the board and the promoter holds all the equity. Eleven permanent staff and contract workers deliver the output.
| Role | FY24 | FY25 |
|---|---|---|
| Promoter-Director (1), sole shareholder | 18.0 | 24.0 |
| Director (2) | 13.3 | 13.2 |
| Director (3) | 13.2 | 13.2 |
| Director (4), joined FY24 | 7.2 | 13.2 |
| Total | 51.7 | 63.6 |
Employee payable of ₹42.7 lakh equals 4.6 months of employee cost. The auditor's opinion on FY25 is unmodified.
Key-man dependence. Management's materials present the promoter as head of the business, and no approval, supplier right or customer contact is yet shown to sit with the company independently of him. Since every director exits, the handover design is a first-order deal term.
M&A proposition
The offer is the whole company, sold by its sole shareholder, with the board leaving at completion.
Export share is far below FY22's 16.4%.
Gross margin is at a four-year high.
Management's order book against FY25 revenue.
Aerospace or UAV component maker
Adds licensed light-aircraft capability and a propeller line.
Defence-ecosystem integrator
Gains in-house propellers and R&D job-work capacity.
Operator-led buyer
Brings the management team that the exit removes.
Transaction parameters
Value-creation levers, management's view
Management's ambitions of tripling revenue and reaching 50% exports are its own, are not forecasts, are not validated by the adviser and carry no weight in valuation until tested.
Use of proceeds. A 100% share sale pays the selling shareholder; no cash enters the company. Settlement of the ₹90.6 lakh of debt-like items belongs in the price mechanism.
Risks & mitigants
Thin earnings
EBITDA is ₹22.7 lakh and family pay is 2.8 times that. Mitigant: EBITDA before family pay is ₹86.3 lakh; the cost of replacing management is for the buyer to size in diligence.
FY26 unaudited
A full year has closed since the last audit. Mitigant: management accounts go into the data room, and bids can be conditional on audited FY26.
Negative net worth
Net worth is ₹(46.3) lakh and the current ratio 0.57. Mitigant: bank debt is nil; debt-like items of ₹90.6 lakh are quantified and can be settled through price.
Key-man
Design, regulator and supplier relationships appear to converge on the promoter. Mitigant: all directors exit under a defined handover; retention terms are open for negotiation.
Currency
Foreign-currency spend of ₹207.1 lakh against ₹13.4 lakh of export earnings leaves a net short of 37.6% of revenue. Mitigant: order-based quotes can be repriced; no hedging is evidenced.
Approvals and IP title
The approval, defence registrations, licences, brands and drawings are management-stated, and their legal holder and change-of-control terms are unconfirmed. Mitigant: certificates and title documents precede bids.
Product liability
Sport aviation carries accident exposure; contingent liabilities are nil in the accounts but claims and insurance history are not provided. Mitigant: both go into the data room.
Customer concentration untested
No customer-wise data exists in the file, so concentration is unknown. Mitigant: the three-year customer register is a first-tranche data-room item.
Process & next steps
All communication runs through CA Dhiraj Ostwal & Co. — Transaction Advisory, quoting Project Skylark (SEL-101). Direct approaches to the company, its directors or its staff are not permitted.
Disclaimer. This summary is prepared by CA Dhiraj Ostwal & Co. from information supplied by the company, which has not been independently verified. It is not an offer or a recommendation, and no representation or warranty is given as to accuracy or completeness. Management figures, including the order book and FY26 sales, are unaudited. Recipients must rely on their own enquiries and keep this document strictly confidential.