Q3 25/26

Feb 16, 2026

Summary

Continuing operations posted strong Q3 growth, while Canada and France restructuring drove substantial one-time charges. Defense-system wins, semiconductor EMS growth and a stronger Q4 order pipeline underpin the outlook.

Good morning, ladies and gentlemen, and welcome to the Centum Electronics Limited Q3 and 9-month FY 2026 earnings conference call hosted by Ashika Institutional Equities. As a reminder, all participant lines 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. Before we proceed, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Ms. Krishna Doshi from Ashika Institutional Equities. Thank you, and over to you, Ms. Doshi. Thank you. Good morning, and a very warm welcome to everyone on behalf of Ashika Institutional Equities. I welcome you all to Centum Electronics Limited Q3 FY 2026 earnings conference call. Today, we have with us the management, be presented by Mr. Nikhil Mallavarapu, Joint Managing Director, and Mr. Sundararajan Parthasarathy, Chief Financial Officer. We thank Centum Electronics for giving us the opportunity to host the call, and we will now like to hand over the floor to the management for their opening remarks. Post which, we will open the floor for Q&A. Thanks, and over to you, Nikhil, sir. Thank you, Ms. Doshi, and good morning, everyone. Welcome to our earnings con call to discuss the performance of the third quarter and 9 months of financial year 2026. Start with a special thanks to our host today at Ashika Stock Broking. Let me start this call by summarizing the essence of the call. This quarter clearly represents an important inflection point for Centum with few critical announcements, and as a result, allow us a little bit extra time to share our opening remarks, after which we will open the floor for the Q&A. We have delivered a healthy operating growth in our continuing business during the quarter and have taken decisive steps to realign our global portfolio and strengthen the long-term foundation of the company. I will first brief you on the key performance highlights for the quarter and the period under review, provide an overview of the decisions taken with regard to our overseas subsidiary, after which our CFO, Mr. Sundararajan Parthasarathy, will take you through the financial highlights. Starting with the core business, our standalone operations continued to demonstrate strong momentum during the quarter, driven by robust execution in our high-margin build-to-spec segment. Growth was led by strong execution in our domestic defense and space programs, particularly across radar systems, space-based electronic warfare, and tank electronics programs. We continue to see a healthy demand visibility in these segments, supported by our differentiated capabilities and long-standing customer relationships. A key milestone during the quarter was forging a strategic partnership with GRSE for the air navigation program. This marks our entry into mission-critical air navigation systems and aligns strongly with our strategy of moving up the value chain towards integrated systems and platform-level solutions. I am happy to share that we have already received the first order under this program, and we expect more orders in the coming quarters as we build traction. Further, we were declared L1 winner for the development and production of a complete radar system for a major airborne platform of a defense PSU. This is a significant validation of our capability in complex radar systems and strengthens our position in high-value defense programs. On the capacity expansion front, we also completed the groundbreaking at KIADB Aerospace Park in Bengaluru, where we will be setting up a dedicated facility for systems integration and capability enhancements in critical technology areas. On the EMS front, we also saw strong execution with the ramp-up of deliveries to a new semiconductor equipment customer. We also secured new orders from this customer during the quarter, and with the favorable policy announcement under the India Semiconductor Mission 2.0, we believe we are well-positioned to benefit from the growth in the semiconductor CapEx cycle globally. We also secured new business awards in the energy and industrial segment from an existing customer, a leading global OEM for new grid automation and power distribution product lines. These initiatives further diversify our revenue base and strengthen our industrial electronics portfolios. Our order book is also strengthened further during the period, providing healthy revenue visibility into the coming quarters. Based on the current pipeline and customer traction, we expect good momentum of order intake in Q4 as well. Now, let me address the overseas subsidiaries candidly. Over the past several quarters, we have been transparent about the challenges in our Canada and France operations and our intent to address them in a time-bound manner. In line with this commitment, we have now discontinued operations in our Canada-based subsidiaries and initiated closure-related actions in accordance with applicable regulations. This effectively stops further operational losses from these entities. In the European subsidiary, over the past few years, we have also made sustained and serious efforts to bring a turnaround. These included leadership changes, strategic repositioning, operational restructuring, cost optimization initiatives, and capital infusion from the parent company. We committed management bandwidth and financial resources to restore stability and growth. However, despite these efforts, the prolonged weak macro environment in Europe, subdued demand in the ER&D services market, increased competitive intensity impacting margins, and balance sheet constraints at the subsidiary level have not enabled a sustainable turnaround. After careful evaluation, we determined that reallocating capital and leadership attention towards our core growth segments would generate stronger long-term returns for shareholders. Accordingly, the board has approved initiating actions with respect to our French subsidiaries to assess options including divestment, sale, or transfer of business, or Redressement Judiciaire as permitted under the relevant laws. To summarize, we have discontinued operations in Canada and initiated restructuring actions in France. In line with these decisions, certain one-time exceptional items have been recognized in the quarter to appropriately reflect their financial impact. Based on our present assessment, we do not expect any further material financial impact beyond what has already been recognized. Overall, with the overseas restructuring actions now substantially addressed, our strategic focus remains on strengthening the company's capital allocation discipline, allowing us to fully concentrate on profitably scaling our rapidly growing core ESDM platform. With that, I would like to hand over the call to our CFO, Mr. Sundararajan Parthasarathy, to brief you on the financials. Thank you, Mr. Nikhil Mallavarapu, and good morning, everyone. Let me now brief you on the financial highlights for the third quarter and nine months of the financial year ending March 2026. At a standalone level, revenue from operations for Q3 FY 2026 stood at INR 238 crores, reflecting a very strong growth at 27% year-on-year. The EBITDA for the quarter stood at INR 26 crores, higher by 27% year-on-year. The profit before exceptional items and tax for the quarter stood at INR 19 crores, registering a growth of 77% year-on-year. For the nine-month period, the standalone revenue stood at INR 630 crores, registering a growth of 25% year-on-year. The EBITDA registered a growth of 50% to INR 76 crores, translating to a margin of 12.1%, representing about 200 basis points over the corresponding period last year, sorry. Profit before exceptional items and tax for the nine-month period stood at INR 15 crores, reflecting a growth of 128% year-on-year. This clearly reflects improved scale, better program mix, and operating leverage in India's ESDM business. Now coming to the consolidated performance. Revenue from operations for Q3 FY 2026 stood at INR 331 crores, registering a growth of 21% year-on-year. The EBITDA for the quarter stood at INR 31 crores with a margin of 9.5%. The profit before exceptional items and tax expense from continuing operations was at INR 18 crore, which is up by 53% year-on-year. For the 9-month period, the consolidated revenue stood at INR 873 crore, up 15% year-on-year. The EBITDA for the 9 months stood at INR 78 crore, translating to a margin of 8.9%. Profit before exceptional items and tax expense from continuing operations was at INR 45 crore, which is up by 155% year-on-year. To reiterate, we delivered strong results this quarter and are well on the path to delivering a stronger quarter to end the year, largely backed by the standalone performance. The financial results for the quarter end 9 months period reflects the impact of exceptional items and one-time impacts to give effect to the developments relating to the overseas subsidiaries as discussed by Mr. Nikhil earlier. Now, let me explain the accounting treatment relating to these overseas subsidiaries. Following the board approval during December 2025, we have discontinued the Canadian operations that has been specifically classified as discontinued operations in the Q3 financial statements. Accordingly, all the prior period numbers have been restated to reflect the operating results of the continuing operations. The net operating results include loss relating to Canada that has been reflected separately under discontinued operations in the consolidated financials. For the 9-month period, the loss before tax from discontinued operations amounted to INR 39 crore, and for the quarter 3 FY 2026 it was at INR 29.8 crore, including one-time impact of INR 24.9 crore. These numbers relate to Canadian subsidiaries again. Now coming to the exceptional items included in the consolidated financial. The exceptional items for Q3 in consolidated financial statements were at INR 57 crore, and for the 9 months period it was INR 55.6 crore. These relate primarily to impairment of goodwill and intangible assets arising from restructuring options of the French subsidiary. At the standalone level, the impact is more pronounced due to impairment of investments. During the quarter 3, the company has fully impaired its investment in subsidiaries amounting to INR 153.8 crore in standalone books. In addition, exceptional items at standalone books also include provision for receivables relating to supplies made to the Canadian subsidiary. All these actions ensure that the standalone balance sheet now reflects a conservative and realistic valuation of the overseas exposures. To summarize clearly, number 1, Canadian operations have been classified as discontinued. The numbers have been recast accordingly. Standalone exceptional items largely relate to the impairment of investments in subsidiaries and provisions against receivables connected to Canada. Lastly, the consolidated exceptional items, that is in the consolidated financial statements, primarily reflect goodwill and assets impairments relating to the French subsidiary. However, it is important to emphasize that these exceptional items are largely one time in nature and predominantly non-cash accounting adjustments. With these provisions now substantially recognized, we believe the balance sheet appropriately reflects the current structure, and the future performance will more clearly represent the strength of our continuing India-based operations. I can now confidently say that the underlying business momentum remains positive, margins are improving, and the capital structure is now cleaner and more aligned with our strategic focus. With this, we can open the floor for Q&A session. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Ankit Babel from Subhkam Ventures. Please go ahead. Good morning, sir, and congrats for good standalone numbers. My first question is that, why there has been an adjustment of last year Q3 numbers on a standalone basis? Because whatever restructuring which has happened is all in subsidiaries. So why the standalone numbers have been adjusted, restated? Sorry, Ankit, I didn't get your question. Standalone numbers have not been restated relating to these two subsidiaries for prior years. It's only the consolidated financial segment, if you read the notes also. Because if I see your standalone numbers for last year. As of now, your profit is coming at around, at PBT level it's INR 107 million. Right? But when you had declared the results of last year, it was coming somewhere. One second. Yeah, it was coming at INR 91 million. There is a difference. And in the notes also, you have mentioned about this, note number 8, where you have presented the restated numbers in your- In standalone, sorry to interrupt, Ankit. There was an amalgamation last quarter we announced about the GNS India Private Limited. There was one entity. That's the only restatement in the standalone financials. Again, I can provide the reconciliation offline if you want. Okay. Yeah. Okay. Second question is, what is the value of the radar order, where you are relevant from a defence PSU? Ankit, we will disclose that at the time that we receive it. No problem. Yeah. We expect that to hopefully happen in Q4. Okay. My last question is now on, as you had mentioned in the press release that you guys are looking for even divestment of the French subsidiary. Since you have already taken the write-off of full investment value, do you expect any realization happening if you succeed in selling or divesting your French subsidiaries? Yeah. Thanks for the question, Ankit. I think based on our assessment today, we do not expect to realize anything meaningful from this divestment. We have taken certain actions already over the last couple of months to assess this. While we continue to look for options, I think based on the current external environment in France and Europe, the general M&A activity also has slowed down in anticipation of better future. As a result, we do not expect to realize much from this process. That is why, to be prudent also, we have taken full impairment of the carrying value of the asset. Okay. So any timeline wherein you expect to close it, the divestment? Ankit, as mentioned, there is a Redressement Judiciaire process also that may kick in, which typically has about 4 to 6 months of observation period. Within that, they will have to find suitable bidders, and the process will take its own time. I think by next quarter, that is Q4 financials reporting timeframe, we expect some more clarity. As soon as we get to know any further details, we will definitely be updating the investors. Why I was asking this question is, till the time you do not divest, also whatever loss or profit comes in, those subsidiaries will be borne by Centum, right? Will be part of Centum. That is correct. So that is why during the quarter, next 6-8 weeks, we will get to know more. And based on the IFRS standards, at the appropriate time when we need to stop consolidating, we will stop consolidating also when it requires. Okay. So again, one confusion here. As you mentioned that in cases there are losses because you have not been able to turn around the company. So in case there are losses, then you had also mentioned that you have already taken the provisions. If any further losses comes in, would be over and above the provisions which you have already taken? And I am talking about the operational losses because that business is still continuing. It is still running. You are right. The operating loss, we cannot accrue ahead of time. Until the time we consolidate the financials of the European subsidiaries, the operating loss will be consolidated. At the same time, like I mentioned, once the process kicks in, we will get more clarity on the date of losing control or any subsequent action. Accordingly, we will stop. Considering the visibility- Sorry to interrupt you, Ankit. I would request you to please rejoin the queue again for more questions. Okay, ma'am. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management should be able to address all the questions from the participants in the question queue, we request you to kindly limit your questions to two per participant. If you have a follow-up question, please rejoin the queue again. We will take the next question from the line of Bala Subramaniam from Arihant Capital. Please go ahead. Good morning, sir. Thank you so much for the opportunity. My first question, I think we have been declared as an L1 bidder for complete radar system. I am trying to understand what is the approximate order value and execution timeline for this project. Generally, what kind of margin profile for this kind of competency systems levels, compared to traditional BTS business. Secondly, we also got a partnership with GRSE for air navigation program. What is the total potential value for this program over the next three to five years? Whether we can able to extend this kind of program to other shipbuilding partners like MDL or GSL or any other navigation system partners in Navy. Thank you for the question. Yes, sir. First, with regards to the radar system order, this is a, I would say, development followed by production order. What we will receive first is the first phase of the production orders, and then subsequently, we will be receiving the production orders. The total value of this program is to the tune of about INR 700 crores, over a, I would say, five to six year sort of time horizon. The first tranche, of course, as I mentioned, for what we will receive in the short term, we will announce it, as and when we receive it will be disclosed. The second one, which is the air navigation system, this again, we had already disclosed the order that we have received already is to the tune of about INR 30 crores from GRSE itself. You are absolutely right, we expect to receive orders from several other shipbuilders or shipyards, including GSL and HSL and so on in the coming quarters and years. We estimate that again, the total opportunity here is again to the tune of about INR 500 crores or so, again in a three to five year kind of time horizon of order booking. Sir, if you could elaborate on the margin side for these programs. Yes. The margins for these programs, obviously, I would categorize it just generally to say that in this business we expect to be at 20%-25% EBITDA margin. These are more or less in line with that profile. Okay, sir. Sir, my second question on that space-based surveillance program. I think the addressable opportunity size is nearly INR 1,000 crore. How much we can expect next one or two years, sir? Secondly, if you could elaborate more on India Semiconductor Mission 2.0. Sir, it is one of the major tailwinds for the EMS business. I am trying to understand what kind of specific opportunities we have. We are looking specifically for, especially on supply chain for assembly, testing, marking, and packaging side. We are focusing on design and prototyping side. Oh, yeah. Great, thanks. So the first one with regard to the SBS program, it is substantial. We are starting to see some orders coming in. We expect to book some of this in Q4. Some of them we have been declared L1, and again, we expect to start receiving those orders in Q4 or Q1 of the following year. As I said, total opportunity size is there in the range of about INR 1,000 crore. As things progress over the next few quarters, we will be having a clearer idea of how much of that we will be able to book. But things are moving in a very positive way, and we expect orders to start coming in, as I mentioned, or have already started to come in in Q4 and subsequent quarters. The next point with regard to India Semiconductor Mission 2.0. This is a new policy announcement that we saw in the budget. The details are still yet to be fully clarified on this front. But we understand that in this instance, there is a major impetus and push to involve the broader ecosystem of semiconductors, including the capital equipment used in semiconductor fabs. In that respect, as I was mentioning earlier, one of our major new customers that we have added in the last year and ramped up in Q3, in fact, is a major player. They are one of the top global capital equipment suppliers to semiconductor fabs. They have a strong commitment in terms of their procurement in India. So we expect revenues from this sector to also increase in a very good way over the next two to three years. Thank you. We will take the next question from the line of Jatin Jadhav from Sahasrar Capital. Please go ahead. Hello, am I audible? Yes, you're audible. Yes. First of all, congratulations. I actually had two questions regarding the airborne platform, the complete radar system. Sir, could you just elaborate what exactly is the kind of radar which we are providing or the kind of solution which we are providing for the defense PSU? Sure. It's essentially a radar system for a helicopter platform, and it is intended for multipurpose function, including search and tracking for surveillance, and a few other modes. I can't disclose too much about the technical details of the program. But suffice to say, it's for a major helicopter platform. As I mentioned, more details will be announced once we receive the order. Got it. Sir, the partnership which we have done with GRSE, what exactly is this air navigation system which you provide? If you could throw some light on it. Yeah. Very simply put, this is a navigation system that enables aircraft to land on ships, land or take off from ships. It is like an air traffic controller that you would typically see at an airport. This is a more sophisticated, advanced version of that is there specifically for military applications. We are making the system that is on board the ships itself. As of today, there is really only one such system that is deployed on the aircraft carrier that we have. There is a need that many more warships that are already in service or are under construction, will require this system. What we are delivering essentially is for that. Got it, sir. Thank you so much. I will get back into the queue. Thank you. Thank you. We will take the next question from the line of Rupesh Tatya from Long Equity Partners. Please go ahead. Hello, sir. Thank you for the opportunity. My first question is, can you just talk about T-90 tank stabilization system? I think there is a big effort to indigenize those systems. How many systems are present? What kind of opportunity that will be? That is question number one. Second question is, recently, I think ISRO one PSLV satellite launch failed. Maybe you can give some idea about how it will impact us positively, negatively, and any subsequent orders we can expect in this program. These are the two questions initially. Yeah. Yeah. Sorry, I did not understand exactly the first question. It was something about stabilization system. Could you just repeat? The T-90 tanks, right? The T-90 tanks. Yeah I think it is a Russian design, and I think India is looking to indigenize those tanks. Some of the components. Are we present in that program? Yes. We have the tank electronics, right? We have a division, tank electronics. Yes. We have indigenized several things on tank electronics, which were previously Russian designs or Russian imports. We have been successful in doing several different subsystems onboard the tank, and we continue to work on a couple of others, which are in advanced stages of development and so on, including what you just mentioned. This is an ongoing program, and there are also some potential new opportunities for an upgradation and so on that are in the pipeline. Yeah. These are for various parts of the tank, including the sighting systems to the fire suppression systems and so on. That was the first question. Then I think your second question was with regard to the unfortunate event of the failed launch a few weeks ago. Actually, the main payload for the launch, in fact, was something that was delivered from Centum. It was quite an unfortunate event because we were looking forward to establishing a capability that would have been, again, a first time for India. It was a hyperspectral imaging payload with a high level of resolution and accuracy, which we do not have today. That being said, to your question, there is expected to be a repeat mission, but we are yet to receive any concrete details regarding that as of now. Clearly, the need for such programs and payloads is only increasing. To use space-based intelligence is a critical need, and we are fairly confident that the demand for such payloads and electronics will only increase as we go forward. Just one follow-up. For both of these programs, can we expect, let's say, INR 500 crore of orders each over the next, let's say, 3-5 years? Yeah. Let me not say specifically for the program, but more broadly. If you are talking about the tank electronics upgrades or the space-based payloads, then yes. We do see a fairly healthy pipeline to the tune of what you mentioned in the coming few years. Okay. Thank you. I will get back in the queue. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. We will take the next question from the line of Mehul Pajiani from Forty Cents. Please go ahead. Hello, sir. Thank you so much for the opportunity. Sir, if you can highlight how do we see the budget in terms of the budget spending on defense and aerospace for our company? That is question number one, and I will ask question number two later. Yeah. I think at a high level, several positives I think we can still take away. Clearly, the increase of the defense CapEx budget has been important and significant, and with the continued trust and focus on indigenous production or indigenous design and manufacturing, clearly a very positive sign for companies like us who have been in this space for a long time with very strong capabilities and strong relationships. The budget, I think was in line and reflective of the need to modernize our forces and I think it is a positive direction for Indian companies in the space. Sir, my second question is about the global market. With the kind of evolving geopolitical scenario, has the prospects for our company, you would say, are we in a better position than last year in terms of the geopolitical market scenario, in terms of the total addressable market? Yeah, very good question. Actually, with all that is happening in Europe or in Israel and so on, we have seen, on our EMS side of the business, an increased order book coming from some of these customers. We clearly are seeing the increased spending on defense hardware coming in over there. We expect this to continue for the next few years, also because there are capacity constraints in some of these geographies. Some of our existing customers itself, we are seeing more opportunities coming from them, which is for exports, and nothing to do within India. Positive opportunity. Yeah. Right. One last question. When do we know about the L1, where we have been classified? By when will we know about the final decision? We hope in this quarter, we should have the orders from this. Sir, can we reveal the PSU which is where we have bid for? No. We will release all of that at the time of receiving the order. Okay, sir. Thank you so much. Thank you. We will take the next question from the line of Somil Jain from Lucky Investments. Please go ahead. Yes, sir, thank you for the opportunity, and congrats on the set of numbers. First, on the BTS side, the sequential execution seems to be slightly on the softer end. Anything that we should read from that? The order book still remains healthy. If you could talk about the execution in this quarter. Secondly, of the BTS order book, how much is the LN systems unexecuted bit already remaining in our order book? On the first part, as you know, in our BTS segments, typically, we keep reminding all the investors that it is not supposed to be viewed as a quarter-on-quarter business because it is not a linear thing. The values and the timing depend on the programs that are at various stages. Right? That way, if you look at it sequentially, yes, there could be up and down, but there has been a trend also, as you could see maybe from Q4 of last year to Q3 of this year. But that does not reflect the full year's prospects, if that is a concern. Year-on-year, you can see clearly it has grown very well, and BTS contribution to these trend growth also is on the rise. That way, you can be assured that there is nothing concerning on that front. Yeah. I will just add one point here, because in fact, as we mentioned in our opening remarks, Somil, that a good part of the growth has been driven by the BTS part itself. So we have seen growth happening on the BTS side. One thing just to keep in mind is that if you are trying to compare the order book with the revenues, it is just something to keep in mind that typically, order execution cycle on the BTS side of the business would be typically in the range of about 2 to 2.5 years. Whereas on the EMS side of the business, it is a lot more shorter, maybe less than 12 months. So that is just something that is important to highlight while viewing the numbers. Got it. The portion of LN systems in our unexecuted order book for the BTS side? Sorry, we do not have exactly the numbers with us right now, but we are making good progress on that. We expect to have a fair amount of billing also happening in Q4. But there is always a mix of orders and we are expecting also pretty healthy inflow of orders in Q4 as well. From various types of even space-based electronics, apart from the other ones that I already mentioned. Got it. If I can squeeze in a couple of more questions. On the EMS side, can you talk a little bit about the ramp-up on the semiconductor equipment? If you can give any quarterly numbers for this quarter, and going ahead, what kind of further ramp-up you see, if any. We won't disclose specific quarterly numbers, but I'll just say that this is a customer that we had won just at the beginning of this financial year. It has been a very rapidly moving business. Typically, the timeline from when you get awarded a business to when you do a prototype and qualification to actually starting to see a ramp-up of production is something that takes two to three years. But, in this case, it's been very fast. We were awarded, in fact, already about 65 different part numbers that have all been qualified. In Q3, the series production deliveries have begun. We expect, as I mentioned earlier, that on this financial year, we expect to do at least $10 million of business, if not more, which was practically zero in the past year. Going forward, we feel we can get to at least a $30 million revenue range per year with this customer in the next two to three years. So, actually, probably even in a two-year kind of timeframe. Very bullish about this segment and our engagement with the customer is moving in a positive way. Perfect. Okay. Finally- Sorry for the interrupt, Somil. I would request you to please rejoin the queue again for more questions. Sure. Thank you. We will take the next question from the line of Nemish Sundar from Elara Capital. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Sir, just two, three questions from my side. Firstly, on the QRSAM order that BEL is expected to receive by Q4 or Q1, would we be part of that? Would we be receiving any orders from BEL for the same, for radars or any subsystems? Yes. It's a major program, clearly. There are certain active opportunities that we are engaging with BEL on. We do expect to have some order booking coming from this program specifically. I am not able to share exactly the numbers now, but we have a few different opportunities and products that we are engaging on this program. Okay, sir. For a longer term, two major projects are currently being talked about, like the AMCA program where consortiums have been shortlisted, and for the 114 Rafales that have now received the AoN approval from the MoD. For these two programs, I know they are longer term, but could we be in any position to say what would be our scope, if any, in these projects? Yeah. With regard to the Rafale program itself, first of all, we are already a supplier to this program through Thales, who is our major customer here. We are one of only two companies, I would say, who are supplying electronics to this platform currently. What we are supplying is, in fact, something that we are integrated into the global supply chain, and it is being delivered and shipped all over the world. We hope and expect that as these programs evolve in India, that we will work to have a larger book share and partnership with our very strategic customers on this side. On the AMCA, that I would say is still quite an early stage, but here again, we are positioning to work on the various core electronic systems on board the aircraft, whether it's the radar, EW or the avionics that go on board the program. Those are still at the early stage, and we will be closely monitoring that as it evolves. Sir, Thales, are we supplying any electronics or any design or how is the Okay, sir. Just one last thing on LCA Tejas Mark 1A. Are we involved there? Are we supplying any components to them, components or subsystem? Sorry, could you repeat that? LCA Tejas Mark 1A to HAL. Are we also involved there, like the 180 numbers order that HAL is currently executing? On LCA, our presence is fairly small, so we don't have a big presence on board the LCA. Okay. Thank you so much, sir, and all the best. Thank you. We will take the next question from the line of Ankur Gulati from Genuity Capital. Please go ahead. Sir, can you give some color on the standalone margins and when can we Sorry to interrupt in between, Ankur. You are not audible. Hi. Audible now? Yes. Please proceed. Yeah. Can you give some color on standalone margins? When can we expect them to steer back to mid-teens? Yeah. I think this is where we mention the mix of business, whereas our build-to-spec business is in the range of 20% or more. The EMS side of the business is closer to 10%. We do have some operating leverage that will open up. You have seen already, as we mentioned, in the 9-month period, EBITDA margins have improved by about 200 basis points at the standalone level. Typically, Q4 for us is a bigger quarter also, so we will maintain or improve our margins in Q4. Going forward into the next years, again, as we continue to have revenue growth, you will see the operating leverage come in, and we expect a steady improvement of margins also in the coming years. The last question, is there a seasonality in EMS and build-to-spec, quarter-on-quarter-wise, or is it pretty much well spread out across the quarters? Yes, we do have, clearly, most definitely, especially in our BTS business, there is a lot of lumpiness. These are, again, the revenues are tied to major program deliveries and so on. So we do have a fair amount of lumpiness, especially in our BTS business. On the EMS side of the business, it is a little bit more stable. But here, again, there are certain programs and customers where you will see a spike of deliveries in a specific quarter. But more or less, as a trend, I would look at this as a lot more stable as compared to our BTS business, which tends to be a lot more lumpy in nature. Okay, thanks. Thank you. We will take the next question from the line of Shahi Vijay from Capstocks & Securities. Please go ahead. Thank you for the opportunity, sir. My question is regarding the subsidiary, just a follow-up. Sir, for the Canada subsidiary that we wrote off around INR 50 crores, which was for the Sorry, am I audible? Yeah, yeah. Go ahead. Yeah. For the Canada subsidiary, INR 50 crores that we wrote off was the receivables. Can we expect a similar write-off for the French subsidiary as well? Because I understand that the INR 150 crores investment- No. Yes. Yeah. Sorry to interrupt. You were asking if there is anything similar expected relating to French in, like INR 50 crores? Yes. Okay. No, as far as the French subsidiaries are concerned in standalone, there is nothing that we expect to come and impact in Q4 or in the future. Whatever the investment impairment that has been taken, and there is no accounts receivable that is doubtful or anything, because there have been some steady payments also coming in. All right. And sir, regarding the 50 crore Canada subsidiary write-off, can we expect some recoverable amount in the future? That is a good question. When the accounts are finalized and audited, we took a clear assessment of what is outstanding and how much is receivable, recoverable. To tell you what we wrote off or provided for, is after considering the values that we received in this quarter, about 500K dollars or about INR 5 crores has been received. Towards the end, when the entities get eventually wound up, any subsequent cash collections from customers that we carry may also come back to India after everything gets settled and the court order gets received. If at all, they have to be very minimal, but not a major recovery that we can expect. Got it. Thank you, sir. And all the best. Welcome. Thank you. Thank you. We will take the next question from the line of Karan Sanwal from Niveshaay. Please go ahead. Yeah, thank you for the opportunity. Just wanted to understand what products are we doing for the semiconductor business currently? Yes. Our customer is one of the leading suppliers of the capital equipment used in the semiconductor manufacturing process itself. And what we supply to them essentially are box builds and PCBAs. These are build to print services where it is the customer's design, and we are a contract manufacturer for them. This sits in our EMS part of the business. As I mentioned, we supply either box builds or PCBAs to them. So majorly, it would be a part of the EMS business, right? The entire- Yes. It is all part of the EMS business. Yes. Just to confirm, previously you mentioned it is a $10 million opportunity for FY 2026, and it would be $30 million for the next two years, right? No. Yes, $10 million for FY 2026 is correct. We expect it to get to an annual run rate of about $30 million in two years. Understood. One last question. Are we expecting any other semiconductor client coming up in a big way apart from what we have already received? There are also talks in the industry that another big semiconductor equipment player is targeting India for setting up bases. Are we at one stage or any intimation from the client to explore the parts of them? We are exploring. I can't say anything that I can disclose at a very advanced stage to be disclosed at the current stage. But we are very well-aligned in terms of our capabilities and processes for this type of business. So as and when opportunities come up, I am fairly confident we would be well considered for this. Understood. Thank you so much. Thank you. Thank you. We have the next follow-up question from the line of Somil Jain from Lucky Investments. Please go ahead. My questions have been answered. Thank you. Thank you. We will take the next question from the line of Anant Shenoy from AS Capital. Please go ahead. Sir, my question is on the semiconductor side. Since many of the companies in the semiconductor who are working on the capital equipment side are like it is a high margin segment for us. Since we are reporting it in the EMS side, what kind of margins are they similar to the EMS margin of 10, 12%, or do we expect higher margin on semiconductor side? No. The business model is what drives the margins here. We do expect, you may have a very minor variation, but a rough mean of about 10% EBITDA is what we feel is a sustainable long-term margin for any EMS business in these type of industries. Whether it is defense, aerospace, whether it is semiconductors or industrials, and so on. Of course, as you go into consumer and so on, those drop. But we typically have done various global benchmarking and all of that, and the EMS business in these type of sectors are typically around the 10, 11% EBITDA levels. Sure. Thank you. My next question is about the As I mentioned. Yeah, I was just mentioning again that it's important to keep in mind these are all cost-plus models because the customer designs the product, and we are manufacturing for them. We always obviously look at various ways to improve productivity and reduce costs and so on. But with the EMS business, it's typically around 10%, 11% is what is to be expected. Sure. My next question is about the Virupaksha. We were supposed to get the order. Did we already win the order? For the tile quantity, aggregator, receiver part, have we won the order? Yes, we won the order and the programs are in execution, sir. Okay. What is the quantum? Can you throw some light? What kind of These are development orders at this stage. So they are, I would say, still at the smaller stage. Obviously, when these come into production, they will be much larger programs, going into hundreds of crores of possibilities. But at this stage, these are development orders, so they are smaller orders. Thank you. We will take the next follow-up question from the line of Rupesh Tatya from Long Equity Partners. Please go ahead. Yeah. Hello, sir. Thank you. Thank you for the follow-up. This Virupaksha order, I have a follow-up on that. So will we get major share? Are there more competitors in this space? Can you give some idea? There are 250 Su-30 MKIs, right? That will come for upgrade 25-30 per year. So what kind of market share we expect in this product? Yeah. It's a bit early at this stage to give a very confident, clear answer with regard to market share and so on. There's still various things that will play out as the development progresses. I think suffice to say that there are two other major players or competitors in this part of the program. But we are building a very critical and important part of the entire radar system itself. Okay. Sir, then other than some of these programs we have talked about in SBS, in tank electronics, in Virupaksha, any other major programs that we are looking to win market share? Anything about SSN Alcora kind of size, anything bigger than that, maybe you can give some idea around that. It's a bit early for me to disclose those at this stage. There are clearly multiple irons in the fire that we are working on. I would say broadly in the areas, again, of electronic warfare systems. That's a big focus area for us. I'm not able to divulge at this stage the programs specifically, but we have a pretty healthy pipeline of opportunities coming up there as well. Okay. Thank you. Thanks for answering my questions. Thank you. Thank you. We will take the next question from the line of Pranav Bastawala, an individual investor. Please go ahead. Yeah. Congratulations, Nikhil. I think so after a very long time, some very decisive decision, very tough decision has been taken, and I am sure that this will go a long way in clearing a path for this organization. My questions are basically how you place this company from where you want to take it? Say maybe it may be around 900 to 1,000 crore turnover, say, individual level. From this level, where we are looking at in next 3 years? And how you want to concentrate on the EMS business itself, which is going to be quite bigger on the coming time when we are seeing the global opportunities? And especially even in the defense when the others are expanding, do you look at it that how we can move to tier 1 level in this particular space? Especially Centum is very good in as far as space sector. Please. Thank you. Thank you, Pranav, and I must, you've been a long-term investor and a guide for us over the years. Some of these, I guess, difficult decisions, as you rightly mentioned, are also things that we take as a result of the strong and clear inputs from investors like yourself. Appreciate the vote of confidence on this decision. With regard to our path forward, here we have obviously very aggressive growth plans. I think, starting first on the defense side of the business, we have strong objectives of growing this multifold in the coming years. I won't specify exactly a number in terms of guidance or anything like that, but we will grow this substantially. As you already see, we expect to close this year's order book already at a very healthy rate based on what we are seeing from Q4 also. The pipeline of orders and opportunities that we are driving internally is quite aggressive. We do expect to see a multifold increase of our defense and space business. A big part of this is also driven by our objective to position at system level. As I mentioned already on the call today, two of the first major validations of this strategy have come in the form of this navigation system and the full radar system, which we are expecting the order for in the current quarter. We are well on our way on that side. Secondly, on the EMS side of the business, again, on one side have been focused on the product segments that we've been addressing, in terms of, apart from, of course, defense aerospace, but also industrial, medical, and mobility. I would say the vision for this part of the business going forward also is quite positive. We want to ensure we have high quality for our customers. This is a business that is very easy to take business at a low margin and scale, but we want to ensure we take high quality customers and ensure that our execution of these type of programs are done well. A lot of investment and effort is going into our own internal processes and systems in terms of implementing automation, AI kind of solutions in critical core areas. That also, I think, will be a key point of differentiation as this business evolves. Pipeline is healthy. I think we talked also on a few of these areas throughout the call today. Our defense and aerospace global customers itself are seeing increased demand volume. We will continue to work on that. We have certain strategic opportunities there. Also, on some of the newer areas, whether it's industrial or the semiconductor kind of equipment, are all also progressing well. Even in terms of new customer additions and so on, we have a very clear plan and strategy of identifying key target accounts and having a sales team and sales force that's driving to capture that business. These are some of the actions that are ongoing, and as I say, we want to scale up this business in an aggressive way and working the granular details to make sure that it's executed well. Yeah. With my second last question, basically EMS is a business which has an ROI of 10%-12%, and it's a different kind of a business. But when we are looking at defense and aerospace sector, many of them command an EBIT of 35%-40%. So what we are planning to move to that kind of an EBIT level, or are we even planning for tier 1 supplier even coming 3-5 years with some JVs? Yeah. It is not one at the expense of the other, I would say, Pranav. Basically, while on the EMS side of the business, one of the things that is important to highlight is that while the EBITDA margins are in the range of 10%, 11%, the ROCE for this business can be north of 20%, 25%, because capital requirement is much lower as compared to the defense and space products business. So this will continue to be an important part of our overall portfolio and we'll continue to develop that part of the business. But clearly, in terms of significant new investments on the defense and aerospace product side to position ourself as a tier 1, either through our own internal R&D development, but also through the strategic partnerships with the global players, are something that we are clearly pursuing. The ability to increase the EBITDA margins to the levels that you just mentioned will come largely if they are indigenous designed products. This is where our focus of developing and strengthening more and more on the internal R&D capabilities is a key part of our strategy. But in parallel, we also pursue the partnerships with global players to capture opportunities that are there more imminently. I think this example of the GRSE partnership is one wherein we actually have technology coming from a European partner, and was something that enabled us to quickly access and capture the market for this. So we follow multipronged strategy to be able to win business and also grow our margins. Thank you very much. Ladies and gentlemen, due to time constraint, we will take that as the last question for today. With that concludes the question and answer session. I now hand the conference over to Ms. Krishna Doshi for closing comments. Thank you, and over to you, ma'am. Thank you so much. On behalf of Ashika Institutional Equities, we would like to thank the management of Centum Electronics Limited for the call, and many thanks to the participants for joining the call. Thank you very much, sir. We may now conclude the call. Thank you, everyone. On behalf of Centum Electronics Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines. Thank you. Thank you all for participating. Thank you. Thank you, sir.