Q4 25/26

May 15, 2026

Summary

Standalone FY26 revenue rose 25% YoY and the order book grew 23%, while overseas restructuring clarified the core business focus. Medium-term growth target remains 25%-30%, with a 13%-15% EBITDA margin objective and supply-chain lead times a watchpoint.

Ladies and gentlemen, good day and welcome to Centum Electronics Limited Q4 FY 2026 earnings conference call hosted by Elara Securities India Private Limited. As a reminder, all participants online will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand conference over to Mr. Harshit Kapadia from Elara Securities. Thank you, and over to you, sir. Thank you, Nitesh. Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q4 FY 2026 and FY 2026 conference call of Centum Electronics Limited. I take this opportunity to welcome the management of Centum Electronics, represented by Nikhil Mallavarapu, joint managing director, and Sundararajan Parthasarathy, chief financial officer. We will begin the call with a brief overview by the management, followed by Q&A session. I will now hand out the call to Nikhil for his opening remarks. Over to you, Nikhil. Thank you, Harshit, and good afternoon, everyone. Welcome to our earnings conference call to discuss the performance for the fourth quarter and full year of FY 2026. Let me also extend a special thanks to our hosts today at Elara Capital. Now, let me start by briefing you on the key performance highlights for the quarter and the year under review. After which, our CFO, Mr. Sundararajan Parthasarathy, will take you through the financial highlights. This year has been a defining chapter in the company's journey. One that is marked by decisive strategic measures, meaningful expansion, and strong operational execution at the standalone level, and that has further strengthened our long-term foundations. We sharpened our focus on our standalone business while deepening our presence across high-potential sectors, which are defense, aerospace, space, semiconductor equipment, and industrial electronics. Through disciplined execution and a clear strategic vision, we have reinforced our positioning in industries that are expected to shape the future of technology and manufacturing. We ended FY 2026 on a strong note with continued execution momentum across our core standalone business and the continuing operations. During Q4, the company delivered strong growth across both BTS and EMS businesses, supported by robust execution, improving operating leverage, and the continued traction across defense, aerospace, semiconductor, industrial, and electrification segments. For the full year, our standalone business delivered revenue growth of approximately 25% year-on-year, while profitability also improved meaningfully, reflecting a stronger execution, better program mix, and operating discipline. At the same time, FY 2026 was also an important year from the strategic standpoint as we took decisive steps to sharpen our focus around the core India ESDM platform. Let me now briefly address the developments relating to the overseas subsidiaries. As discussed during last quarter, we had initiated decisive restructuring actions with respect to the underperforming overseas operations, with the objective of realigning management focus and capital allocation towards our core India business. I am pleased to share that the restructuring process is progressing broadly in line with our expectations. In Canada, operations were discontinued during Q4 FY 2026, and the wind-up process is under progress. In Europe, the French subsidiary entered the redressement judiciaire, or the legal restructuring process, during March 2026, and we are currently progressing through a court-supervised asset sale process. We have already received multiple preliminary bids, and with final bids expected very shortly. Subject to the court approval process, we expect the divestment process to be substantially concluded by July 2026. Importantly, beginning this quarter, the financials relating to these subsidiaries have already been classified under discontinued operations, thereby providing clearer visibility into the performance of the continuing core business. Sundar will be providing more details on this during his remarks. Overall, these actions represent a continuation of the strategy we outlined last quarter and should allow the company to move forward with significantly greater focus, operational clarity, and financial discipline. Now, moving to the operational performance and business highlights. During FY 2026, we continued to see strong execution across both our BTS and EMS businesses, resulting in healthy growth in our core standalone operations and a significant strengthening of the overall order book. We closed the year with a standalone order book of approximately INR 1,645 crores, representing a growth of around 23% year-on-year and providing strong visibility for the coming years. In our build-to-specification business, FY 2026 was a particularly strong year, with revenue growth of approximately 37% year-on-year. The growth was primarily driven by strong execution across space-based payload programs, radar subsystems for land and missile programs, and other strategic and defense and aerospace platforms. Alongside execution, we also continue to strengthen our order pipeline and systems-level participation. One of the key milestones during the year was securing a marquee AESA radar program from HAL for the UHM platform, representing an important validation of Centum's capabilities in advanced radar systems and indigenous defense electronics. The overall opportunity size for this program exceeds INR 570 crores over the life cycle of the project. We also secured our second complete radar system order for a satellite and space debris tracking application, further strengthening our position in the strategic surveillance and space program. In addition, we continue to see healthy traction across electronic warfare, aerospace test systems, and other high-reliability defense electronics opportunities. Moving to the EMS business, we continue to witness strong momentum during the year, driven by a successful ramp-up of leading semiconductor equipment OEM, along with new business wins across industrial electronics, electrification, grid automation, and defense export programs. The EMS business delivered revenue growth of approximately 21% year-on-year, supported by strong customer ramp-ups, healthy order inflows, and continued diversification across strategic end markets. We remain particularly encouraged by the momentum in the semiconductor equipment segment, where customer engagements continue to deepen alongside increasing global semiconductor investments and supply chain diversification towards India. Capability enhancement and customer diversification continue to remain key focus areas for us. And during the year, we completed more than 80 new product introductions supporting faster customer ramp-ups and new business wins. We also continued investments towards manufacturing capability expansion, including additional manufacturing lines, process automation initiatives, and systems integration capabilities to support future growth. Overall, we believe Centum is entering the next phase of growth from a significantly stronger operational and strategic position. With the overseas restructuring actions now substantially progressing towards closure, the company is increasing focus on scaling its core ESDM platform, supported by strong execution, robust order book, and expanding customer engagements, and healthy long-term opportunity pipeline across both BTS and EMS businesses. We remain optimistic about the medium to long-term outlook across defense, aerospace, industrial and electrification semiconductor segments, where we continue to see strong customer traction and increasing strategic relevance. With that, I will now hand over the call to our CFO, Mr. Sundararajan Parthasarathy, to take you through the financial performance in greater detail. Thank you, Mr. Nikhil, and good afternoon, everyone. Let me now brief on the financial highlights for the fourth quarter and full year of the FY 2026. At the standalone level, our revenue from operations for the quarter stood at INR 344 crores, reflecting a strong growth of 26% year-on-year. EBITDA for the quarter stood at INR 46 crores, which is higher by 5% year-on-year, with an EBITDA margin of 13.22%. Profit before exceptional items and tax for the quarter stood at INR 43 crores, registering a growth of 19% year-on-year. For the whole year, standalone revenue stood at record INR 973 crores, raising a strong growth of 25% year-on-year, and EBITDA stood at INR 121 crores, reflecting a growth of 28% year-on-year, translating into a margin of 12.42%. Profit before exceptional items and tax for the period was at INR 100 crores, reflecting an exceptional growth of 63% year-on-year. During the financial year, the profitability was impacted by one-time exceptional item amounting to INR 203 crores, relating to provisions and impairments in overseas subsidiaries, as discussed earlier. Before I explain the consolidated financial performance, let me clarify the accounting positions and disclosures applied in Q4 FY 2026 financial statements. The net losses incurred by the overseas subsidiaries, that is in Canada and Europe, have been reported under discontinued operations. Canada results were moved under discontinued operations in Q3 FY 2026 itself, and the results of European subsidiaries are now reported under discontinued operations in Q4, consequent to the commencement of the court-supervised restructuring process in France. The numbers of the previously reported periods have been restated under this section in the financial results statement. The balance sheet items have also been classified as assets held for sale and liabilities directly associated with assets held for sale as far as the subsidiaries are concerned. The goodwill and intangible assets, including R&D capitalized, that were impaired and reported under exceptional items in Q3 FY 2026 in the consolidated statements, have been reclassified under discontinued operations now. Coming to the consolidated performance. Revenue from operations for the quarter stood at INR 340 crores, registering a growth of 28% year-on-year. EBITDA for the quarter stood at INR 49 crores, higher by 7% year-on-year, with a margin of 14.31%. Profit before tax expense from continuing operations at INR 46 crores, which is up by 20% year-on-year. For the whole year, FY 2026, consolidated revenues stood at INR 953 crore, up by 29% year-on-year, with EBITDA for the period stood at INR 135 crore, reflecting a strong growth of 37% year-on-year, translating to a margin of 14.22%. Profit before tax from continuing operations at INR 115 crore, reflecting a substantial growth of 73% year-on-year. Profit after tax from continuing operations was at INR 101 crore, doubling on a year-on-year basis. The overall performance continues to be driven by both our business segments, particularly catering to domestic defense and space customers. Our balance sheet also remained healthy, with total debt to equity maintained at a comfortable 0.28x, and adjusted net working capital days improving to 142 days in FY 2026 from the previous year's 159 days, driven by better working capital management. The adjusted ROCE also improved significantly to 21.16% from 12.40%, reflecting stronger profitability and improved capital efficiency. Overall, our performance in FY 2026 reflects the strength of our core business, improving operational efficiency, and continued execution across high-growth strategic segments, positioning us well for sustainable long-term growth. With that, we can now open the floor for Q&A session. Thank you. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the questions assemble. We have first question from the line of Mr. Ankit Balel from Subhkam Ventures. Please go ahead. Yeah, good afternoon, sir, and congrats on the set of numbers. Sir, just one concern here. The margins for the full year had been below our guided range of 14%-15% at standalone basis. So it came at around 12.5%. The share of BTS has also increased, so what's the reason for our margins in this 12.5%? Thanks, Ankit, for the question. First of all, I think, just in terms of our broad guidance, we are targeting to be in the range of 13%-15% at a combined level. We are slightly below that for the full year, basically because of the product mix in the EMS business. We had initially anticipated a slightly better product mix in the last year. Some of this will be executed in the current financial year. With that, we should see a better margin from the EMS business in the current year. That is fundamentally the point. Sir, in FY 2027, what kind of top-line growth and margins we can look at standalone basis? As we said, from a medium-term level, we continue to work towards a 25%-30% growth rate. We feel we are continuing along those lines, and we should be in line with those expectations. Similarly, as I mentioned, 13%-15% EBITDA band is what we are working towards and we maintain that target. Okay. Sir, since you have already received bids for your European business. Last time you mentioned that you do not expect anything to realize by selling those businesses, but is there any change in that? Can we expect some realization by selling European businesses? No, that also remains unchanged. We don't expect to have any realization there. As you will probably see in the balance sheet today, there is a significant amount of liabilities that have been held for disposal that as they've been reported, and we don't expect to receive anything as a result of this asset sale process. Okay. On a net basis, you don't expect anything to get released? That's right. Okay. Sir, since the 25%-30% growth targets was there even when we were running both the businesses, the international one and the domestic one. Now, since you are fully focused on the standalone part, and your bandwidth will also get released, can't we see acceleration in that business going forward? No, I think the 25%-30% was never at a consolidated level. What we always maintained, it was at the standalone level, whereas the subsidiary was relatively flat in terms of performance. We are continuing to look at this type of a 25%-30% on a medium-term basis, is what I am saying. We do not want to give year-on-year kind of guidance. But broadly, considering the industry tailwinds on a multi-year basis, this is our objective. I think we have been delivering quite well in terms of the standalone growth, and I think on a medium-term basis, we can target the similar level of growth, sir. Okay. And sir, my last question is, what was your order inflows as standalone basis in FY 2026, and what kind of order inflows you are looking at in FY 2027? And the CapEx. What CapEx you would be doing this? Sundar, you want to take this? Yeah. So, in terms of the BTS business, which is what we focus as orders in the business, there we booked over INR 400 crores in the current year. EMS, of course, it's an order from DRDO, but we couldn't give you some orders, as you know. So that's on the order. As far as the order book closure, as you will see, consistently we've been growing in terms of order book as we carry to the next fiscal. It grew by over 2.3 times in the last three years with a CAGR of 30% in BTS. On the whole, about 1.7 times with a CAGR of 20% on a three-year basis, and that trajectory will continue, especially with the increased focus on the BTS segment. On the CapEx, if the question is around what kind of CapEx we are looking for in the next fiscal year, it will be in the order of, I would say about INR 40 crores. Equally, more or less 50%, or it could be slightly higher on the BTS segment in terms of order indicatability, but otherwise, it will be INR 40 crores-INR 45 crores you can expect. Okay. Thank you so much, sir. I'm sorry, Nikhil. With your permission, I just want to address the previous question that you raised, Ankit, in terms of can we not accelerate the growth? That could be a question. Yeah You want to ask. If you look at our business model, we do not have very high volume of book-and-build business, right? Our BTS is a fairly longer cycle game, right from the RFP stage to closure to realizing the revenue. So the management bandwidth that could get focused on the BTS will only yield more results in the near future in terms of order booking for the year or the next year and the further growth on a long-term basis. Whereas in the EMS, again, we have a fair amount of open sales orders because demand from the customers, which will be executed during the year. So the direct impact and the immediate impact on next year's revenue, you would not see in terms of release of management bandwidth and so on. I just want to clarify considering the business model that we operate. But this can accelerate 2, 3 years down the line, right? Absolutely. Yeah. Okay. Yeah. Thank you so much, sir. Thank you. Thank you. Thank you. The next question from the line of Chirag Jadhav from Allianz Global Investors. Please go ahead. Hi. Hello. Good afternoon, sir, and congratulations on the numbers. My first question was related to, until the court approves the sale of the French subsidiary by July, are there any broader themes for any further exceptional losses we should be expecting or modeling in the coming quarter or two related to this? And the second question was related to the margin profile of the vertical. So especially how do defense and aerospace orders compare to the other sectors such as transport, industrial, and healthcare? Yeah. So on the first question, I'll address and probably second also I'll try and Nikhil you can please chime in. As far as the European subsidiaries are concerned, Chirag, the two major items that were booked in Q3 have continued. As far as the whole process is concerned, the court process will conclude by around June, wherein there could be some takers or some part of the businesses and the people, and the remaining that is not getting acquired will eventually move into the liquidation state. But at that point in time also, as we explained, the balance sheet carries much larger liabilities, over INR 100 crores excess over assets. So we don't expect any write-down coming in hitting the consolidated books. Moreover, we'll also be evaluating the point in time of cessation of control in terms of having a necessity to consolidate. If that event gets triggered in Q1, then Q1 we would not be consolidating or in Q2 eventually. We do not expect any exceptional items or one-time losses coming in hitting in the next fiscal year as far as European subsidiaries are concerned in the consolidated financials. Okay. Does that answer that question? Then I will move to margin. Yes. I think the margins question. Yes. In general, the BTS segment, we carry a margin profile of around 20% on an EBITDA level, whereas EMS segment across industries, I would say it is fairly pegged at between 9% and 10%. In some cases, if we get lucky, briefly, it will be at around 11%. Then it will again get reset due to price pressure. Because we operate on cost-plus basis, largely it is a contract manufacturing. There is no major differentiation, I would say, in the EMS between these segments. It could be there on a momentary basis or temporary basis. If we are ramping up our particular customer in the industrial segment, initial quarters could be a tighter margin. Then we gradually scale, build better yield, better process, and better circulation efficiency. All that will kick in, and again, it will get normalized. It will not be substantially exceeding in excess of 10%, I would say. These are broadly the industrial scope, except in the segments that we have. Okay. Just to add towards Sundar saying, on the EMS side of the business, that is absolutely true. It hovers somewhere in the range of 10%, 10%, 11%. The BTS segment is a higher margin business, and that can tend to be at 20% plus. For us at the combined level, the mix is one of the drivers. So the way we look at margins, at least, is more divided by business model of build-to-spec versus EMS, which has, I would say, bigger difference in margin profile as compared to the different segments within EMS itself. Okay. Thank you. Finally, this is my last question. For all the defense segment orders and revenue recognition, are all of them booked under the BTS segment as well, or is that split into the EMS segment as well? Just my own clarity. Yeah. Defense and aerospace is a segment that we address in both business models. Now in our results, on the standalone results, I would say pretty much all of the BTS numbers are for defense, which is what we have been talking about. There is also a substantial amount of orders and revenues contribution from the defense segment in the EMS numbers also. Basically, the defense and aerospace segment contribution comes from both BTS and EMS. But BTS is almost entirely defense and space. Yeah. Okay. Thank you. That's all my questions. Thank you. Thank you. Next question from the line of Vinay Khatri from Toro Wealth Managers, please go ahead. Hello, sir. Good afternoon. Good afternoon. Sir, my question is with respect to the EMS segment of yours. Globally, the specialized CCL capacities are becoming tight. From the industry position that you are in, I would just want to see if you are seeing such supply constraints on the ground, and do you believe that this can lead to a bottleneck for the manufacturing that we do in the EMS segment? Yeah. Could you just repeat again? What constraints did you refer to? The CCL capacities, the copper-clad laminate. Copper-clad laminate. Okay. Yeah. Yes, supply chain bottlenecks are clearly an emerging theme in the EMS part of the business. I think it's not only the copper-clad laminate which essentially affects the PCB lead times. Beyond this, I think some of the other impacts that we've also seen is on specific component categories, like memories, where there is also a lot of demand and pull coming in because of the AI data center build-out that we're seeing. So we have seen an increase of lead time in some of these component categories. There are certain proactive measures and actions that the supply chain team has taken and is taking to be able to mitigate these challenges that we are seeing. For now, we are still working on mitigating these, but I think it is something that we are monitoring very closely and need to keep an eye on as this evolves over the course of this year. Understood, sir. But sir, specifically for copper-clad laminate, the severity has increased in the past few months. If you can give just an indication for that, and from where do you procure it, if you can share? Yeah. With regard to copper-clad laminates, as I was mentioning, this really goes into the delivery of the PCB, the bare boards. And we procure these boards from multiple different suppliers in different geographies based on which segments we are catering to. It can be from China for certain industrial applications, it can be from Europe for military applications, and in certain cases, from Indian suppliers also for some of our defense and space applications. So we procure from different geographies. I would say in general, we have seen an increase of lead time, but we continue to have supplies coming in as per our requirements. So we basically need to place orders a little bit more in advance to be able to secure it. But we have seen these impacts over the last couple of months, and as I mentioned, we need to monitor how this pans out in the coming months. Thank you, sir. That was really helpful. All the best for the future, sir. Thank you. Thank you. Next question is from the line of Raj Agarwal from New Asia Asset Management. Please go ahead. Hello, sir. It's great to see business scaling. I have a few questions on the semiconductor side. Are we on line to doing $30 million annual revenue in the next 2, 3 years? Are you in talks with any other semiconductor client who would require similar kind of equipment from us? Yes, I think we are progressing quite well. I would say broadly in line with our expectations for the growth from this customer segment. Yes, today it is largely driven by a key anchor customer in this segment, and we have begun discussions with a couple of other customers here, but I would say it is still in preliminary stages. The major growth is really coming from the anchor customer. Got it. I wanted to understand two new projects, if you can even directionally quantify them. One is the Virupaksha order, and the second one is, I think in the PPT we have mentioned that we have won a second order for radar systems for satellite and space debris. How big are these contracts? How long will this order cycle execution last? Yeah. Virupaksha is still a development order, and so is the space debris tracking order. Virupaksha, just to clarify, what we have won is there are, broadly speaking, four critical subsystems that get integrated into a full radar. We have won two of the higher value subsystems, which is the antenna array and the exciter receiver. It is, I would say, a relatively small development contract, less than INR 10 crores. The second one, which is a space debris tracking radar, which is a long-range radar. This is about a INR 30 crore order, and it is essentially for one system. This is a pretty large, I would say, radar system. The reason why we feel it is also a milestone is, again, it is a long-range, high-power radar, which is different from the other UHM airborne radar system that we had been awarded, and which is more for airborne platform. It is a nice complementarity in terms of our product portfolio, in terms of radar solutions. That's great to hear, sir. Sir, one more question I had was, sir, when we move from system integration and up the value chain, do you think we would have any kind of issues because we will be basically competing or bidding against our own current customers? It depends on the program, I would say. In many cases, our customers, I would say, in many cases are basically HAL, DRDO, and in certain cases with BEL. It's evolving scenario. There are programs that we're collaborating, there are certain programs where we compete. I think that's a natural process of the evolution of the ecosystem in the country, and it's not unique in India. It's something that is seen world over. Got it. Sir, just one last question. Sir, we basically had some losses on our book this 2023. Will we have tax benefit for a few years going forward? Which one specifically are we talking about? Sorry. No, the losses on the subsidiary side. Okay. The losses incurred in subsidiary, that tax benefit would accrue if someone is acquiring the company that is holding the tax credits. I don't think that's not going to be the reality. As far as the losses incurred in standalone business is concerned, there we booked 200 crores of exceptional items. Out of that, the investment-related impairment, that 153, that's a capital loss. So that will be available for us for the future, any capital gains set off. Whereas the other items are being used to offset against the profits made during the current year. Got it, sir. Thank you, sir. And sir, we don't have any impact of this Middle East war in terms of raw material procurement, right? No, we don't see any. We had certain short-term impacts at the end of Q4 because of some logistics delays as a result of the war. But I would say we are not seeing any major supply disruptions directly as a result of the Middle East war right now. Got it, sir. Thank you. Wishing you all the best. Thank you. Thank you. Reminder to all the participants that you may press star and 1 to ask the question. The next question from the line of Vijay Sarthi from Subhkam Ventures. Please go ahead. Thank you, gentlemen. Just want to check, the order inflow for the standalone BTS has been very low growth there, at 4% if I am right. So close to around INR 466 crore of order inflow for this fiscal FY 2026. Any particular reason, and how should we look at this for 2027? That is the first question. You are right. The orders that we could close and book on report was only about INR 430 crore roughly. Whereas, because this is mainly driven by, as you know, some of these programs do take time to get concluded and then the orders get released. So there are a good number of orders that are in the pipeline. Some of them have moved to the current fiscal. So at least, majority of what got spilled over to the current year, we hope to book in the first or second quarter. But as far as the current year order book, I would say, again, because of the same reason, we cannot point to a particular number, but we do foresee a significant growth in terms of order that we can be booking during this current fiscal. Nikhil Malavapu may want to add any specific color to it. Yeah. I think broadly speaking, one point just to clarify again is that the BTS piece of the business, as previously reported, had some contribution also from the subsidiary. And with that being eliminated, I think the numbers have been recast, essentially to focus only on the BTS business that is within the standalone business. So that is one point. The second is, I think, even with what we are seeing, as Sundar said, we did about INR 250 crore of revenue in the BTS business, in the standalone business, and booked about INR 400 crore. So from a book-to-bill ratio, we still maintain a pretty healthy rate. And I think that continues to give us a pretty strong visibility in terms of what we are going into the new year with. Close to, I would say, INR 800 odd crore of orders in this segment. And the third point is I think what Sundar also said, which is that we were also expecting another about INR 150 crore of orders to come in, which have been pushed to the current fiscal at the end of last year. But those, I would say, are fairly well secured, and we expect those to come in. And generally, the outlook for the current fiscal year also is fairly strong in the BTS side of the business. Sir, should we look at With all of these 30%. Sorry. Yeah. Sorry. Please continue. Yeah. I am saying in general, with all of these, we feel fairly confident that we can continue to grow the BTS business also at a pretty healthy rate. Sir, fair to assume that there will be 30% revenue growth in the BTS standalone this fiscal, which means that if you, whatever the spillover of order that comes through, would mean that you will have an order inflow growth of minimum of 15%-20%, and therefore taking your overall order book growth at the close to be in excess of 30% for BTS. Is that the fair number to look at? Yeah. I do not want to give specific quarterly or annual guidance with regards to order booking revenue over there. But as we mentioned, medium-term outlook of growing it at this rate is something that we feel pretty good about. Okay. And we have the visibility and pipeline to be able to achieve that. Yeah. Sure. This UHM platform, INR 570 crore order. This INR 570 crore is the total order for us. When do we start this? Can you give us a timeline and what is our- Yes. scope of work and all that? Yeah. Yes. The INR 570 crore order is basically divided into two phases. The first phase is the development phase, that accounts for about INR 66 crores. INR 67 crores or so. The second phase is the remainder, which is about INR 500 plus crores. Okay. This is without tax or anything. The development phase of this is expected to be done in basically two years from the date of the order. That is in progress right now. Once it is successfully demonstrated, we expect to have the remaining part of it, which is to be executed out till basically FY 2030, 2031. Okay. What is our scope of work in this? What is that we- Sorry for interrupting, Mr. Vijay. Please join the queue for a follow-up question. Okay. Thank you. I will just maybe in a minute address that because it is an important development. Our scope of work in the UHM is, again, a full turnkey radar system. So we deliver the full radar to HAL, and we will be working very closely with them in terms of the integration on the platform and so on. So, this goes right from development to qualification, certification, and all the requisite airborne certification requirements and support that goes with a program like this. We have next question from the line of Mehul Panjwani from 40 Cents. Please go ahead. Hello, sir. Thank you so much for the opportunity, and congratulations on good set of numbers. Sir, my first question is, how quickly can our BTS business scale and the margins can improve? I have joined the call a bit late, so I may have missed earlier responses. Yeah. Mr. Mehul, please, this noise coming from your line. Can you check? Okay. Yeah, I'll go back in a better place. Is it audible now? Yes. It is audible. Sir, you can go ahead. Okay. Sir, my first question is, how quickly can our BTS business scale and our margins improve out there? Yeah. The BTS part of the business, as we mentioned, we have a pretty healthy pipeline of order book, first of all, and then a pipeline of opportunities that we're seeing. We've been basically saying that at the combined level between EMS and BTS, both which are growing pretty healthy rate and probably fairly similar rates, can be in the range of 25%-30% CAGR. You will have certain years where we're able to grow a little faster in one segment or the other. But over a medium term, that's a reasonable target which we feel comfortable achieving. That's, I would say, broad level point, but there is a significant amount of opportunities and pipelines which we are actively working on the BTS part of the business. Sir, my second question is with regards to the West Asia crisis. If this crisis were to extend further, would we face challenges in procuring material which we require for our business? I think I answered that just a couple of minutes ago. I think the West Asia crisis basically had some short-term impact in terms of logistics. We are not seeing any major long-term impacts as a result of this war in terms of supply chain. We do have certain customers and programs that we are engaged with in the region. There are some opportunities that we are seeing as a result of the ongoing war. We will continue to monitor these as they evolve. Okay, sir. Thank you so much, and wish you the very best. Thank you. Thank you. Thank you. We have next question from the line of Vivek Gautam from GS Investment. Please go ahead. Hello, sir. Many congratulations for good numbers. A few questions I had. Avendus is a very old listed company. What have been the triggers behind the recent improvement in the performance? Are they sustainable? How is the opportunity size for us, the expected growth rate, and the differentiators for our company, sir? Thank you. Okay. I think to speak about the performance of the company, I think fundamentally, this is what we've been saying is that we've had overseas subsidiaries that have been masking the good story that we've been having at the standalone core India business. If you look at the numbers over the past four years or so, we have been growing at a pretty healthy rate. Once again, at the standalone level. Both in terms of revenue, and in terms of margins, the overseas subsidiaries have been dragging us down over these last years, and this is where taking this decisive step to put this into a restructuring and basically get out of those businesses was a decision that the board has taken. That allows us to really capitalize and focus on the opportunities that we have with our India platform for the ESDM business. I think that's one at a higher level. Specifically, with regard to markets and opportunities, I think defense and aerospace clearly has been an area that we've been focusing on. With both the push for Make in India, as well as the global increased demand, whether it's in Europe or in the Middle East, as a result of the increased budgets from the ongoing wars or even otherwise. Those have all been very good tailwinds, and we've been very well-positioned to capitalize on those. Beyond that, I think on the EMS side of the business as well, one I would say differentiating point, is that from a long time we have been an export-oriented business, and so the levels of quality, reliability, performance, and internal systems and processes that we maintain and run are at a global standard. We've seen big global customers that are now looking to indigenize production of their electronics, which they were previously importing from outside the country or, in certain cases, even buying for their global demands from other parts of the world, choosing India as a key destination. Seeing the global standard that we're able to run and operate has given us a strong edge in winning these opportunities with these customers. I would say, a combination of our positioning. On the defense and the BTS side of the business, I must also emphasize our strong and deep domain knowledge in the design and IP creation of technologies, many of which are created for the first time in the country. I've talked about several of these programs, whether it's space-based electronic warfare payloads or hyperspectral imaging payloads. Even, as I mentioned most recently, a major program for an airborne radar platform. All of these are, I would say, examples of- IP that we're creating, and those, I think, are fairly differentiated from what many other companies can do. Okay, sir. Thank you. Keep up the good work, sir. Thank you. Thank you. We have next question from the line of Raman KV from Sequent Investments. Please go ahead. Hi, sir. Can you hear me? Yes. Yes. Yes, sir. From your presentation, I have seen that your order book is now. More than 50% of your order book is your BTS segment. Currently, BTS segment contributes to around 28%. Can we expect in the coming year as well as by FY 2028, can we expect this to move towards more 40/60 split between BTS and EMS, thereby improving some margins as BTS is a higher margin business? Yeah. Maybe I will answer it in two steps. The first is that there are fundamentally different order execution cycles in BTS versus EMS. BTS inherently is an order book-driven business, and the execution period of a typical order is somewhere between two to 2.5 years. Whereas on the EMS side of the business, it is an annuity business in most of the products that we do. What we get from our customers is a firm purchase order for, I would say, a shorter period of time and maybe a forecast for a longer horizon. What we report here is only firm purchase orders that we have, but the visibility is more considering the forecast also, but that is not reported. The split of order book between EMS and BTS, I would say, is not an indication by itself of the split of revenues going forward, because EMS orders typically may be in the range of nine months or so execution period. Six to nine months, depending on the product mix and customers and so on. This is where I would say we do have a pretty good and strong visibility in terms of growth in the EMS side of the business as well. But you may see one or two years where BTS can grow a little bit more than the EMS part of the business like you saw in the FY 2026. But I would say directionally, both businesses are growing quite well. And over a medium term, I would say they would be moderately in a similar direction, but not significantly different from the current mix. Maybe a little bit more towards the BTS side. The second part of your question with regard to margins, that we do see opportunity for us to improve the margin. As I said, we are targeting to be at 13%-15% in the next one to two years time horizon. And that should be coming basically from some operating leverage also as we see the growth kicking in. But yeah, over time, depending on the year, depending on the mix, you may see some improvement beyond that on the margins. But directionally, this 13%-15% for the next two, three years is where we feel we will be. Okay, sir. Sir, my final question, with respect to the disinvestment of your foreign subsidiary, how much are we expecting as a quarterly loss from Q1 FY 2027? Yeah. Q1, as we are speaking, the process has kicked in already, and the current first quarter trade is already over in the quarter. The losses could be in We don't have a precise forecast because we are not even sure in terms of what happens in the month of June, which business segment will move out and so on. But like I mentioned earlier, there is high possibility that we might lose control because of the process effects based on the court order, we will evaluate again. And we might not even consolidate in Q1 if the triggering event takes place in the month of June itself, which we will know sometime in June only, because we can't predict it until we see the court order. So it can be in a very similar range of what we've been seeing, plus probably some acceleration because of reduction in slowdown. In general, May is a slow month in France, so I would say it could be in the order of around that time. I mean, broadly speaking, just to add, the main point here is that it is already a discontinued operation, and there is no cash that is going from the standalone entity or parent company to the subsidiaries. There hasn't been any over the last several quarters, in fact. This will be deconsolidated very shortly, and we are looking at whether this will happen at the end of Q1 or, I would guess worst case, in Q2. We don't expect any. Basically, in our optimized scenario, this should be fully deconsolidated, hopefully by Q1, if not by Q2. Just to put some numbers, we had INR 33 crores of loss from discontinued operation in Q4. We can expect somewhere in that range for Q1, right? No. In Q4, there are several other items also included, from Canada and so on. The old. I think continuing operations is what we should ideally be looking at, because Q1, it will only eventually, what do you say, die down in terms of numbers, because it is the third month of the quarter and still we do not know whether some of the segments will be part of us or not. Yeah. Not more than what we reported during this quarter? No. It should not be even at that range. Like what you are saying. Okay There is a lot of one-times and so on that was happening in the current quarter, so we do not expect that to happen. In all likelihood, we will hopefully deconsolidate it completely. The other point, just to note, is that if you look at the balance sheet, today, if you look at the lines for items held for disposal, the quantum of liabilities held for disposal is significantly higher than the assets over there. I think it is important to keep all of that in the context. Really, consolidated numbers do not really mean much from a PNL standpoint anymore. It should really be focused on standalone. Understood, sir. Sir, if I can just squeeze a small question with respect to the HAL order. Sir, this is a 570 crore order. I just want to understand what will be the total addressable market. Once you are done with the development part, and it is successful, and you go on to do the execution work for the shares Sorry, Mr. How much will it open? Mr. Raman KV, please rejoin the queue, please. Okay. Ladies and gentlemen, this was the last question. I now hand conference over to Mr. Harshit Kapadia for closing comments. Thank you, Nitesh. We would like to thank Nikhil and Sundararajan sir for giving us an opportunity to host this call. We also would like to thank all investors and analysts for joining this call. Any closing remarks, Nikhil or Sundararajan sir, you want to share with investors and analysts? Thank you all for participating in our earnings conference call. Hope we were able to answer all your questions satisfactorily, and at the same time offer insights into our business. As I would say in a short sentence, I think it's been a landmark year for us. We have taken the tough decisions of making the strategic calls with regard to underperforming overseas subsidiaries. Standalone performance is strong, order book and visibility is strong, and I think we're quite well-positioned to maintain a very good rate of growth and profitability as we move forward. If you have any other further questions or would like to know more about the company, please do reach out to our investor relations managers at Valorem. Thank you, and look forward to further interactions. Ladies and gentlemen, on behalf of Elara Securities, let's conclude this conference. Thank you for joining us, and you may disconnect now. Thank you. Thank you.