Aeries Technology's Turnaround and AI-Driven Growth: A High-Conviction Buy for FY2026

In the ever-evolving landscape of AI-powered enterprise solutions, Aeries Technology (AERT) has emerged as a standout performer, transforming from a struggling mid-market player into a disciplined growth engine. With FY2026 shaping up as a defining year, the company's strategic pivot toward AI-driven delivery, private equity partnerships, and scalable nearshore operations has unlocked profitability and positioned it as a compelling long-term investment.

A Profitability Turnaround Fueled by AI and Operational Discipline

Aeries' Q2 FY2026 results underscore a dramatic turnaround. Revenue grew 3% year-over-year to $17.36 million, while net income surged to $0.64 million-a stark contrast to the $2.31 million net loss in the same quarter of FY2025, according to a QuiverQuant report. Adjusted EBITDA turned positive at $2.55 million, with a margin of 14.7%, reflecting the company's ability to leverage AI and automation to drive efficiency, as noted in a StockTitan report. For the first half of FY2026, Aeries reported a net income of $2.32 million, compared to a $17.62 million loss in the prior year period, according to the QuiverQuant report. These metrics highlight a disciplined approach to cost management and margin expansion, critical for sustaining growth in a competitive market.

The catalyst? Aeries' AI-powered content automation solution, which delivers 80% efficiency gains and a 12× throughput improvement, according to the StockTitan report. By embedding AI into its Global Capability Center (GCC) model, the company has reduced operational friction while scaling delivery capacity. For instance, its nearshore operations in Guadalajara, Mexico, have already generated over $20 million in client savings, according to the StockTitan report.

Strategic Differentiation: Dual-Shore Delivery and Private Equity Synergies

Aeries' competitive edge lies in its integrated India-Mexico delivery model, which combines the cost advantages of India with the proximity and time-zone alignment of Mexico. This dual-shore strategy not only enhances client engagement but also future-proofs operations against geopolitical and labor market shifts. The company plans to hire over 500 new employees in FY2026 to further scale this model, according to the QuiverQuant report, ensuring it can meet rising demand without compromising margins.

Equally critical is Aeries' alignment with the private equity ecosystem. As private equity firms increasingly adopt AI to optimize portfolio companies, Aeries has positioned itself as a key enabler. CEO Ajay Khare emphasized that the company is now "operating from a position of strength," with a growth playbook centered on sponsor-led expansion and deeper relationships with private equity clients, according to the QuiverQuant report. This strategy is paying off: Aeries recently signed a multi-million-dollar AI partnership, signaling strong client confidence, as reported by StockTitan.

Long-Term Sustainability: AI as the Third Pillar of Private Equity

The broader market trends further validate Aeries' trajectory. According to an EY report, 84% of private equity funds expect AI to have a "significant transformative impact" on their operations, according to an EY report. AI is now the third pillar of private equity, alongside financial engineering and operational expertise, enabling firms to streamline due diligence, enhance portfolio management, and improve exit timing, as noted in a Magistral Consulting report. Aeries' focus on AI-driven solutions aligns perfectly with this shift, offering a recurring revenue model that private equity firms crave.

Moreover, Aeries is addressing ESG and regulatory demands, which are becoming non-negotiable for investors. By leveraging AI for data transparency and automation, the company helps clients meet ESG mandates while reducing operational risks, as noted in an Observer report. This dual focus on profitability and ethical governance positions Aeries to thrive in a post-AI market where "responsible profitability" is the new standard, as noted in the Observer report.

Why This Is a High-Conviction Buy

Aeries' FY2026 adjusted EBITDA guidance of $6 million to $8 million, according to the StockTitan report, reflects management's confidence in sustaining its momentum. With a scalable business model, strong client retention, and a clear path to margin expansion, the company is poised to outperform in a sector projected to grow at 8.6% CAGR through 2034, according to the Magistral Consulting report. For investors, the risk-reward profile is compelling: Aeries is no longer a speculative bet but a proven operator with a defensible moat in AI and private equity services.