Q1 25/26

Aug 6, 2025

Summary

Q1 FY26 revenue rose 11% consolidated and 35% standalone, led by domestic Build-to-Spec deliveries; the order book reached INR 1,769 crore. Growth targets remain strong, while subsidiary losses and delayed European ER&D demand are key recovery challenges.

Ladies and gentlemen, good day and welcome to the Centum Electronics Q1 FY26 earnings conference call hosted by ICICI Securities Private Limited. 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. I now hand the conference over to Mr. Mohit Lohia. Thank you, and over to you, sir. Yeah. Hi. Thanks, and good afternoon, everyone. Thank you for joining us today for the quarter one of FY26 call of Centum Electronics Limited. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr. Nikhil, Joint Managing Director, Mr. K.S. Desikan, Chief Financial Officer, Mr. Sundararajan Parthasarathy, Chief Financial Officer Designate. Without further delay, I would now hand over the call to management for the opening remarks. Thank you, and over to you, sir. Thank you, Mr. Mohit, and good afternoon, everyone. Welcome to our earnings call to discuss the performance of first quarter of financial year 2026. Let me first mention a special thanks to our host of today's call at ICICI Securities. I am joined today with our CFO, Mr. Basakern, and our CFO Designate, Mr. Sundararajan Parthasarathy as well. Let me first start by briefing you on the key performance highlights for the quarter under review, after which our CFO Designate, Mr. Sundararajan, will take you through the financial highlights. For the Q&A, I will take the questions along with our CFO, Mr. Basakern, as well. Sorry to interrupt. Mr. Nikhil, can you speak little louder? Sure. Yeah. So in the first quarter under review, we delivered a strong performance on both revenue and EBITDA margins, with consolidated revenue from operations growing by 11.4% year-on-year. This was driven by strong growth at the standalone level of 35% year-on-year, primarily driven by the high margin Build-to-Spec business, with higher deliveries for our domestic defense and space customers. There was, however, degrowth in our Ladies and gentlemen, the line for the management has got disconnected. Please stay connected. Meanwhile, I will connect them back. Sorry- The management line is connected. Great. Thank you. So apologies for that. I think we got disconnected. We will restart again with my comments for the first quarter. So in the first quarter under review, we delivered a strong performance on both revenue and EBITDA margins, with consolidated revenue from operations growing by 11.4% year-on-year. This was driven by a strong growth at the standalone level of 35% year-on-year growth, primarily driven by a high margin Build-to-Spec business. And these deliveries are for our domestic defense and space customers. There was, however, degrowth in our international subsidiary. The demand there is yet to pick up in the ER&D business because of delays in customer decisions on new projects due to uncertain macro factors in Europe. Despite these headwinds, the pipeline of opportunities with key European defense and aerospace customers is improving, and we expect a better performance in the second half of this financial year, of course, contingent on the conversion of these identified opportunities. In addition, we are making progress on our evaluation of strategic actions to arrest losses and reposition the business, especially with regard to our Canadian subsidiary. On the order book front, our order book position grew to INR 1,769 crores as of 30th June 2025, driven by new EMS customers entering into the serial production phase after successful NPI qualification. Along with this, we have also received new development orders from DRDO for critical programs like the Virupaksha Radar, which we expect will unlock significant long-term pipeline linked to various airborne platform programs. Now, I would request Mr. Sundararajan to give you more details on the financial performance. Thank you, Nikhil, and a very warm welcome to all of you. Let me brief you on the financial highlights for the first quarter of financial year ending 2026. At a standalone level, the revenue from operations was about INR 180 crores, which increased by 35% year-on-year. The EBITDA for the quarter was around INR 27 crores, which also grew by more than 100% year-on-year, with the EBITDA margins reported at 14.92%. The net profit for the quarter was around INR 16.5 crores, which surged by more than 250% year-on-year. At a consolidated level, revenue from operations for the quarter was reported at INR 273 crores, which grew by 11% year-on-year. The EBITDA for the quarter was about INR 23 crores, it is a growth of 47% year-on-year, and the EBITDA margin reported as 3.38%. The net profit for the quarter was around INR 4.5 crores, with PAT margins reported at 1.65%. With that, we can open the floor for Q&A sessions. Thank you so much. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Harsh from Perpetual Capital Advisors. Please go ahead. Hello, am I audible? Yes. Yes, sir. My first question was on the ER&D business. The ER&D revenue were under pressure. Can you elaborate on the pathway to recovery for this business, and what is the expected timeline for this recovery? Also with Europe actively increasing defense spending, do you see a meaningful uptick in this ER&D opportunity? Are you seeing this translate into inquiries or order wins also? Great. Thank you, Harsh, for the question. Yes, with regard to the ER&D business, we've clearly seen a demand softness over the past 18 months or so, led effectively by, firstly, the automotive sector, partially also on the aerospace sector. But we are seeing an improvement in the pipeline of opportunities, driven largely by the defense customers and to a certain extent, also with certain aerospace programs. So we expect to have some of these pipeline conversions happen over the next few months. With that, we are targeting to have an improved performance in the ER&D part, at least, in the second half of this financial year. That's, I would say, the overall summary with regard to the ER&D business. Yes, we're certainly seeing signs of the increased spending in Europe, in the form of a better pipeline of opportunities on the defense side. And we hope that this will sustain and convert in the time to come. Right. And sir, the domestic BTS order book has remained flat QOQ. Could you share why this is, and are there any expected conversions or current inquiry pipelines and expected conversions in the near term? Yes. While the orders, the order book has been relatively flat, you must remember that there has been a significant growth of revenue in deliveries over the last quarter, which is what we just highlighted. So from an order booking standpoint, it continues to remain healthy. And we continue to see a healthy pipeline of opportunities that we expect to book over the remainder of this year. So the domestic BTS business continues to be a growth area for us. And sir, what is the typical execution timeline of the current BTS order book? Yeah. Typically, the BTS orders are in the range of between 2 to 2.5 year execution period. Great. Sir, under development orders which often carry lower or negative margin initially, what is the conversion timeline into production orders? Are we starting to see some of these translate into higher margin opportunities? Yeah, certainly. I would say broadly you can categorize the type of orders we have into two parts. One is large development programs itself which are the kind of things that we do for space programs, for example, where these are largely project type of business which involves a design phase and a delivery or manufacturing phase for these things. But these are not huge in numbers because satellites are still relatively small in quantities, but high in value. On the other side, you have defense programs where there is several different types of subsystems and all of that, where we have a development contract at the beginning. Or even in certain cases, we take on the development of products to indigenize imported systems, which itself lasts maybe about 18 to 24 months of design and qualification cycle. Subsequently, we will receive production orders for that over a longer period of time. So these are the two types of contracts that we typically have. But as I mentioned, the design and qualification period itself is somewhere in the range of around 18 to 24 months. Right. Sir, on the EMS side, is there a- Sorry to interrupt, Mr. Harsh. Mr. Harsh, sorry to interrupt, but I request you to rejoin the queue for the follow-up question. Thank you. The next question is from the line of Raman KV from Sequent Investments. Please go ahead. Hello, sir. Thank you for allowing me to ask you a question, and congratulations on good set of numbers. Sir, I just wanted to understand one. Can you give any update with respect to the Canadian subsidy? Has there any deal that has been finalized? Yeah. Thanks, Raman. This of course, is a key priority, as we've been mentioning. We've made some good progress on that. We believe we should have a decision for this in the coming months, and we hope to basically have a decision for that by the end of the current quarter. Then there will be some time associated with the short period following that to close and basically complete the transaction that we've been doing. So yeah. We're still working towards that timeline. Sir, can you give a ballpark figure out at what will be the cash inflow once you sell off this business? Yeah. I am not able to disclose anything of that sort at the moment. Also you should remember this is a loss-making business, so the expectation of any significant cash in is not high. Okay. Sir, my second question is with respect to your order book. Can you give the order book split? I think the earnings presentation that we have highlights this, but just give me 1 minute. So yeah. At a high level, we see that about 710 crores is the order book for EMS, 886 crores is BTS, and ER&D service is 171 crores. Sir, my final question is with respect to the gross margin. During this quarter, although the EBITDA margin has increased by almost 200 basis points on year-on-year, the gross margin has declined by 100 basis points. Is there any one-off or the current gross margin is the steady-state gross margin? Maybe I will look at the. Yeah. Go ahead. You say EBITDA margin improved, but gross margin. What do you mean by gross margin? Because we- I am talking about only- Sorry to interrupt, sir. But can you speak a little louder? Can you hear me? Yes, I can hear you. I am talking to the management. Okay. What do you mean by gross margin declining? Can you please explain? Because EBITDA, we understand. Yeah. So when I am comparing it on year-on-year basis, your gross margin is around 50% to 51%, which is basically margin with respect to the materials consumed. And currently, it is around at 49%, 50%. Yeah. I think for the part of materials consumed, just to clarify, there is a big contribution of the mix of the revenues that plays into this. So fundamentally, each of these businesses have different levels of gross margins that we have. The Build-to-Spec business, considering the fact that the design is done by us and so on, we have a higher level of gross margin in that business compared to the EMS, where we are more manufacturing customer's design. And if you look finally even at the engineering services part of the business, there it is only people cost, because we have no material cost as such in engineering services by itself. So the level of gross margin would be highly dependent on the mix of the three types of business that we have. Okay. Thank you, sir. Thank you. The next question is from the line of Harshil Sethia from Singularity AMC. Please go ahead. Sir, how much loss does the Canadian subsidiary do as of today, as of FY 2025? This is Anil. Last year, we have lost about 2.4 million euros. In the 2 years prior to that also, we have been losing about 2 million each year. That is the reason that we are trying to take that hard decision of stopping the bleeding by one way or another. Similarly, even in Q1, it was 600-700 K- Yeah. Thousand euros, basically. Yeah. Sir, 600, 700K is the EBITDA loss that you're talking about? No, it is EBIT level, 600,000. 600,000- From this quarter. From this quarter. Yeah, no, in EUR. EUR. EUR. Okay. Yes. And sir, how many employees are still left in the Canadian subsidiary? I guess we had already downsized in the last two years. There are currently around 30 employees that we have there. Okay. This is basically the Alstom business, right? They are the largest customer contributing to this business. That is right. When you are saying you are trying to reposition this Canadian subsidiary, basically negotiating with Alstom or trying to sell the division off? Yeah. We are exploring different options. Our first objective is to stop the loss, fundamentally. Like I said, at this stage, I am not able to divulge much because we are under NDA, and we need to complete the discussions ongoing. But we are discussing both options, to be clear. How much does the Canadian subsidiary contribute to revenues in FY 2025? The current quarter, let me say, because it has been coming down, and current quarter, the subsidiary overall is about INR 95 crores, of which the Canadian entity is about INR 7-8 crores. How much would it be last year, some INR 50-60 crores or higher than that? It would have been about 70 crores. 70-75 crores. Okay. And sir, lastly, what is the current bid pipeline in terms of order book as of today? What is our expectation in terms of order inflow growth for FY 2026? You are talking about the overall group, right? Exactly. On a consolidated basis. Yeah. We don't really, again, express exactly what the bid pipeline is looking like, but I can just say that we do have a healthy pipeline and a plan to book the business to be able to continue a healthy level of growth that we've been targeting. As we mentioned in the past, our medium-term growth objective is to be in the range of around 18%-20% at a consolidated level. At a standalone level, it will be higher than that. We feel we have appropriate pipeline to be able to continue that level of growth going forward. Okay. And sir, lastly, on the CapEx front, I guess you had earlier mentioned that we'll do a INR 40 crore CapEx in FY26. That would take our gross block up to around 390, INR 400 crores. Sir, what kind of asset turns do you see in the business? What is our utilization levels at each and every facility, if you can tell? Currently, we are Now I talk about the standalone only because there is no capacity in the subsidiary. Currently, we are running around 6-7 times, and that may not significantly increase in the current year. But considering the growth from 6-7, we expect this to move about 8-9 turns in the next year or two. Because significant CapEx will get added to this. So the INR 40 crore CapEx that you had announced on the last call will be done purely for the Indian business? Yes. Okay. We are not pumping in any money for our subsidiaries, right? No. Okay. Sir, in this gross block of around 380, 390 crore, which will happen by the end of the year, how much would be from the Indian business and how much would be from overseas subsidiaries? You mean gross block? Yes, sir. No, gross block is mostly Indian money because there is no fixed asset base. The subsidiary is solid. The people business. It's a people business. It's engineering services, so there is no major CapEx and fixed assets in the subsidiary. Okay. Lastly, what I want to understand is, in the Canada business, was it ER&D and BTS both, or was it just any single segment? Yes. Today it's largely a BTS business. The background over here is that this used to be actually a part of Alstom in the past. It was carved out and given to the subsidiary or to the company even before we acquired the French company. To be clear, the Canada subsidiary is a subsidiary of the French business, and it came along with the acquisition of the French business. This was originally carved out and given as an engineering services contract for the people. Over time, it was a declining contract which was to be converted into a BTS or product supply agreement with multiple different contracts. Where we are today is that the level of product deliveries and the sale is not enough. The margins associated with that is not enough to justify the costs that we have in Canada. That is part of the reason we are incurring the loss. On the other side, one of the things that we have done is also created a team in India. We have about 30 engineers, 30 to 40 engineers in India, able to design and develop the same sort of solutions that we are already delivering for Delhi and Chennai Metros in India. We won a first order even for the Vande Bharat program in the past quarter. We are able to continue this capability from India without reliance on Canada. Okay. Lastly, in the French subsidiary- Sorry to interrupt, Mr. Harshal, but I request you to rejoin the queue for the follow-up question. Thank you. The next question is from the line of Vikram Sharma from Niveshaay. Please go ahead. Hi, sir. Congratulations for the good numbers. Sir, my question is, what is the size of this development order received from IBM? Also, if you can explain about the overall opportunity size in the next 3 to 4 years. Yeah. The size of the development order itself is relatively small. This is in the range of maybe around ₹10 crores or so. But these are major platforms that will come subsequently. Obviously, as I mentioned, just the time to design and qualify this at the platform level. For us to design and deliver this is maybe the 18 to 24-month project. Then for it to be qualified at the platform level integrated on the plane has a lead time associated with that. So in the period of 3 to 4 years, it may not directly yield huge orders, but subsequent to that, this is one. This is for a major platform, which is the Sukhoi 30. The size of opportunity there can be to the tune of maybe ₹1,000 crores or so. The other important thing is also while we are developing this for the specific program, the technology are sort of like building blocks. So we can use these technologies to also try to open up and create opportunities in other programs, which we will also be pursuing. Yeah, it is a significant development because this is the cutting-edge technology that we will be developing for radars. We are confident that it should open up some sizable opportunities for us going forward. Okay. Could you talk more on the airborne platform program you briefly mentioned in the presentation? What are the products we are targeting? Yeah. Staying on this point of the radar itself, this itself represents an important opportunity. The one I talked about in the presentation, which is for the Virupaksha program, is intended for the Su-30 platform. But like I was mentioning, similar type of technology, there are requirements and needs for other type of platforms, including on various types of UAVs, helicopters and other future next generation fighters also. Those are one. Then of course, in addition to this, we are also working on certain other subsystems and technology in the radar and EW domains. Okay. And sir, the last question on the EMS and BTS business breakup. We are seeing 15% margin at standalone 11. This is comparatively higher than which we guide. Was there any one time high BTS business revenue contribution in this quarter or the split is normal, we can expect in remaining years also? One thing I would say is, please look at the company on the yearly basis, because it's difficult to say pull up. On the whole, the BTS and the EMS business, we maintain the characteristics. But during the quarter, see, one may be higher and even product mix may be shared, et cetera. The point to note is overall, we should be able to maintain the same percentages that we have been giving. Okay. And sir, if you can give a little guidance on the EMS business- Sorry to interrupt, Tejas Sharma. I request you to rejoin the queue for the follow-up question as there are many participants left in the queue. Yes, thank you. Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead. Thanks for the opportunity and congratulations for a great set of numbers and getting the development orders for Virupaksha Radar. Nikhil, we have been talking about three, four segments that we have been concentrating on the BTS side. One is the defense satellite, one is the radar, then we have EW as well as the tank electronics. For all the four major segments that we have been talking about, can you give us some flavor on how are things going on new order intake side, and when are we expected to get some development as well as commercial orders from these segments? Yeah. If you look at the last financial years, we had a good increase in terms of our overall order book. That was driven essentially by a few key programs. One being a radar program itself, where we had designed with DRDO in the early stage, some of the critical TR module blanks for naval radar that came in the form of production orders for us in the last year. We will be executing that. The same product we hope will have further demand as our customer gets newer orders for these type of platforms and so on. That's one, in terms of products that we have already designed and we've started to get the first production orders for. In addition to that, as I mentioned, in terms of new technology development, again, in this sector, we talked about the Virupaksha order. We are now going to be developing significant part of the radars at Centum. That's on the radar front. The space side has been another area that we had some sizable orders last year. We are also anticipating some good orders coming this year from a few different programs. We're working hard to win, to capture those. On the EW side as well, we have responded to certain large opportunities from the customers on, again, airborne platforms, different things. Some of them are competitive bids, so we will have to wait for the results of some of these opportunities. These are large opportunities that we have. Finally, on the land systems side, here again, we've been investing over the past few years in terms of developing equivalent solutions to imported systems and subsystems. We've seen some of those orders come in, even including in the current quarter. There are a few other key products that we are also in advanced stages of development and qualification. We hope to have the qualification completed in this financial year and maybe the first orders for those also coming in at the end of this year or the beginning of next year, next financial year. All in all, I think the progress is good, both in terms of our development pipeline and roadmap, as well as order intake coming in from key customers. Sure. We have been trying to work directly as our system supplier to the tri-services. We were hoping that, we were developing some products for them where the order size can be of the magnitude of around INR 200, INR 300 or even INR 500 crores, a single order size. How close are we to getting those contracts? Where are they in terms of development stage? Do you think, in the coming financial year, FY26 or FY27, we should be able to bag some of this large contract that this can add to our order book substantially? We continue to work on some of those opportunities. I think we've submitted various proposals and are waiting. The government obviously has process associated with those, so they are still in the, I would say, various approval stages within the government itself. We don't see, in the very short term, some of these major opportunities coming through. Yeah. But we continue to work on them and monitor them very closely and hope that as and when the approval processes come through and they come out in the form of RFQs and all of that, we are well-positioned to be able to bid on those. Having said that, again, I come back to the point about our own organic business, where we've already done a lot of work and effort in terms of development and customer engagements. We are quite confident that orders coming from this should be healthy and will support the growth of this part of the business for us in the coming few years. Just- In other part, if I have to summarize, I would say for the large opportunities, the potential is still there, and the pipeline visibility is improving. Yet, the actual order, when we will get, depends on the government processes, which seem to be improving, but still we are not able to clearly say whether it'll happen this year or so. As we progress and as we get more visibility, we should be able to inform you. Sure. Can we expect that, with the current programs that we have on a standalone basis, our BTS revenues can grow by 20%-25% or even higher, 25%-30% over the next 2-3 years. If we get some of these large tri-services orders, our BTS revenue can grow manifold, depending on if we get some of those large orders or not. Can we expect some of those wins in FY 2027, 2028, if not this year, 2026? Your guess is as good as mine. I will address your first point. The growth that we can see on the standalone business driven by the order book that we have, I think we are reasonably confident that we can continue to go down that path. Yes, as and when these big-ticket opportunities click, it can be a step improvement also for the overall business. Sure. Thank you, Anish. Thank you. I request each participant to ask 2 questions only. The next question is from the line of Hrishikesh Shah from Alchemy Capital. Please go ahead. Hello. Yes. My question Hello regarding the margin. Mr. Shah, can you speak a little louder? My question was regarding the margins this quarter. Mr. Shah, we can't hear you properly. Hello. Hello. Yeah. Yes, please continue. My question was regarding the margins this quarter. See, our BTS segment revenue share as compared to last quarter has improved by 600 basis points, but still our margins are lower this time. BTS segment being the highest margin segment for us, what is the reason for lower margin? Mr. Shah, can you please keep the device closer to you? We can't hear you properly. Am I audible now? No. Can you please speak a little louder? One second. I will join the queue again. Okay, sure. Yeah. The next question is from the line of Ananth Shenoy from AS Capital. Please go ahead. Good afternoon. In the 57 crore standalone BTS business, can you give a rough split between the space and the defense? I am reading that there is a significant, and that government is fast-tracking the space-based surveillance. Can you talk about the opportunity for us there? First of all, we do not really give the breakup in terms of space and defense. Just because in several cases, we also have programs for defense which are on a space platform, for example. The way we see it is more just generally Build-to-Spec business for our domestic customers in space and defense as a whole. Having said that, we do quite a bit of critical work and programs for the space side of the business. We do have an important contribution coming from both parts of it in the overall revenue. To your question about the SBS program, the budgets have just been sanctioned and a big part of it will be going to ISRO, after which these will come out in the form of various RFQs for private industries. These are all at different stages of maturity. We have been working with ISRO for a long time and we continue to look and participate in several different areas of engagement here. We have read the whole thing about government asking to fast-track it, but for us right now, it is still at the early stages of the program and we are waiting to see how these pan out in the form of different types of RFQs and opportunities for private sector industry. Sure. These orders will be, when we check these orders, will they get executed this year, or do you think it will happen next year? Can you give the count of what is the size that we are looking for in this particular project? The timelines get spread over multiple years, at least 2 years. There are multiple different opportunities and orders that will come through. That's the first point to your question. The second one in terms of the pie size, this is something I'm not able to share right now. We have a view of all the different opportunities that are there, some of them where we have unique positioning because of proprietary IP or technology that we have on our side, and some which are competitive bids where we have to compete against others. The pie itself is substantial. We will need to see how much of that we'll be booking ourselves. Sure. My second question is about yesterday in the AGM, you had mentioned the 3-year outlook about 18%-20% EBITDA margins that we'll do in 3 years. Can you tell about the roadmap? How can we, from the current margins, how can we go to 18%-20%? Yeah. Just to be clear, what we talked about is 18%-20% growth rate at a consolidated level. This is revenue growth, not EBITDA margin. EBITDA margin, our objective is to be at in the range of 13%-15% at a consolidated level, which today is at 8.5% or so level. The roadmap that we see there, first of all, as you see, the standalone part of the business is already at a roughly 14% level. So we expect and are working to maintain, maybe slightly improve that. But given the growth rate that we will experience in both the EMS and the Build-to-Spec business, the standalone EBITDA levels will be more or less in a similar sort of range. The opportunity for improvement will come largely from the subsidiary, which today is at almost. If you look at the last year, it was at roughly 1.5% kind of EBITDA level, which is dragging down the overall consolidated numbers. The path to fixing that are fundamentally two things. One is the Canadian subsidiary, which I talked about a little bit earlier, which is a major contributor for some of the losses that we are seeing there. We are taking some action, strategic steps, in discussion with our key customer there to be able to stop those losses in the coming quarter or two. The second aspect of it, which is more on the French subsidiary, where essentially the sale has reduced, and that has resulted in the impact on the margins. There, we are working in terms of focusing our sales efforts on the key customers in defense and aerospace, where we have seen the pipeline improve over the past quarter or two. We are working in a focused way to try to convert those into opportunities and improve the sale, which will help improve the margin also at the French subsidiary level. With all of this, we are working on a roadmap that would help us improve these subsidiary margins from this 1% to try to get to a 10%, 11% kind of level in a roughly two-year time period. That is the overall plan for margin improvement, I would say. Okay. Thank you. Thank you. The next question is from the line of Harsh from Perpetual Capital Advisors. Please go ahead. Yes, sir. Can you hear me? Yes, please. Sir, you had mentioned some NPI qualifications previously. I wanted to understand if these are tied to clean energy, semiconductor, or some other sectors. What is the anticipated revenue contribution from these opportunities? Yeah. These are basically with new customers. First, just to clarify, first of all, when we say NPI qualification, typically when we are awarded a new business, either from existing or from a new customer, we go through a qualification phase where we build prototypes, and they go through rigorous testing and so on. Once those are approved, then we get into mass production. What I was referring to here were basically on two, three key customer segments. One was the semiconductor segment, another is around biometric security solutions. The third is again, back to defense and aerospace for the export customers. Right. With all of this, I think for the current financial year itself, our objective with some of these NPIs itself will add about $15 million or so in terms of revenue, US dollars revenue. $15 million? 15, yeah. Roughly about $15 million. Right. Okay. What is the total opportunity over the next four, five years? How much there is? These are all pretty much recurring products. These revenues may go up or down based on specific years' demand from the customer. The way we see it, EMS business is more dependent on the customer relationship than on the specific product itself. With these customers, while we have gone through these NPI qualifications and so on for a certain set of products, we continue to have a pipeline of new products also, which we are quoting and winning, and will help to increase our engagement with these customers as we go forward into the coming years. Great. That is from my side. Thank you. Thank you. The next question is from the line of Raman KV from Sequent Investments. Please go ahead. Thank you for allowing me to ask the question. Sir, I just wanted to understand on the CapEx front, you are doing INR 40 of CapEx in FY 2026 with respect to the standalone entity. How much incremental revenue will this aid in? Historically, you have been able to work with respect to I am just talking about the standalone entity. On a gross block of INR 230 crores, you were able to do INR 750 crores. Can we expect the same asset then? Yeah. Actually, it will be slightly better also. The reason- It will be around 4-5. 5 minimum on the gross block. Right. At the net block level is what earlier I was talking about. Okay. It can be around 6 to 7 times. Okay. This corroborates with the revenue growth that Nikhil has been indicating. That is like a follow-up. Historically, your standalone entity has been growing about 25% every year for the past, at least from what I can see, for the past 2, 3 years. Once this block commences operation, can we expect that in FY 2027, there will be an additional level of growth? No. Just to explain the actual CapEx itself- if you look at the standalone entity in the BTS business, basically we have different set of capabilities. We are doing right from analog, digital, power, RF, so on and so forth. When I say we are augmenting the capabilities, we also augment the capacities in the respective capabilities. whatever we had, the capabilities, that is how we have been growing. Going forward, we are increasing the capabilities and also increasing the capacities in the existing as well as the future capabilities. Okay it is an iterative process. That is the reason why I said we should be able to maintain or slightly improve. Okay. Thank you, sir. Thank you. The next question is from the line of Abhi Medhawala from Wise Capital. Please go ahead. Hello, I am audible? Hello? Yes, yes. We can hear you. Thank you for the opportunity. I have only one question related to U.K. subsidiary, Centum Electronics UK Limited. I want to know, basically, in last two years, we have invested around £33 million in FY 2024 and £45 million in FY 2025. So what kind of opportunity we are looking there? Just because U.K. is subsidiary. Subsidiary. U.K. is actually a pass-through. It is a special purpose vehicle. So the investment was in the French subsidiary. So if you see that, from the Centum Electronics parent company, we invest in the Centum UK, and Centum UK is investing in the French company. So U.K. is not an operating entity at all. Okay. So basically, we are investing more in France. That is also right. Yes. So, sir, another point. In latest quarter, around INR 12 crore loss we incur from the subsidiary. How much loss we incur from Canada? It is roughly 50/50. 50% in Canada and 50% in France of this INR 12 crore. Whereas the revenue from Canada is very small, but the loss is quite high. That is the reason we are trying to stop that. Basically, it is loss from employee. Yes. Employee cost. Yes. Okay. Thank you, sir. Thank you. I request each participant to ask one question only. The next question is from the line of Ajay from Niveshaay. Please go ahead. Hello. Hope I'm audible. Yes. Yes. Congratulations on good set of numbers. I wanted to understand how is the distribution of business under the EMS segment. More on the sector. Sector-wise, which sector are being focused over there? Also, is it more diversified across customers, or do we have repeat orders from few customers? If you could highlight more on the EMS part of the business. Thank you. Yeah, sure. The EMS business is certainly quite well-diversified. We address customers in defense and aerospace for exports. We address industrial and energy, some medical customers, as well as the automotive or mobility kind of customers. These are all the sectors that we're in. As I mentioned, some of the newer customers that we've added and we're ramping up are in the semiconductor space, semiconductor equipment, and biometrics and security. These are all the different sectors that we're catering to. I would say pretty much all of the business is recurring in nature. These are products that have long life cycles, and can last 10 years or more in many cases. We have a fairly high level of recurring revenue in this part of the business for us. Even from a geography standpoint, it's quite well diversified. Here again, I would say a big part of it is for export. We have some part which is domestic, but we are exporting again to Europe, we are exporting to the U.S., to other countries in Asia, including Israel and even now to countries like Malaysia, Singapore, and so on. There's a fairly good level of diversification in this part of the business. Understood. One last question. I wanted to understand more on the BTS side of things. We have been highlighting the amount of opportunity that we have available from this segment, considering the vast domestic aerospace and defense sector as a whole. Any growth guidance you would be comfortable giving, like how this segment can grow, maybe 2, 3 years down the line? No, we don't give any specific guidance on specific parts of the business. I think we've maintained that at a consolidated level. We're moving at 18%-20% with obviously a higher growth rate coming from the standalone business. That is a combination of both the Build-to-Spec and the EMS business growing at a healthy growth rate of 25%+ that we are targeting. Right. That's, I would say, at a high level for the time to come. Yeah. Understood. Thank you very much. All the very best. Thank you. Thank you. The next question is from the line of Hrishikesh Shah from Alchemy Capital. Please go ahead. Hi. Hope I am audible now. Yes. Yes. Yeah. My question was regarding our EBITDA margins. On a yearly basis, we have done well, but on quarterly basis, even with our BTS segment now contributing around 38% from 32% on quarterly basis, why are our EBITDA margins down? Because that is what I was trying to say earlier also. We cannot compare the yearly percentage to a quarterly percentage. The challenge is, for example, the mix changes during the quarters. We should be able to maintain the EBITDA margins, which Nikhil was indicating around 14%-15% on a yearly basis. Yeah. There are a few things that contribute to this, to the EBITDA margins. One is, of course, the mix of the BTS and the EMS, but also just the level of sales. The fundamental point is that some of this business is lumpy in nature. We have a level of sales varying, it is not just the percentage of the contribution, but the level of the sale also that plays a piece. I think I would just go back to what Hrishikesh was saying. Of course, even within each business, even within the BTS business or within the EMS business, there are different product mix, which will contribute to different levels of margin variation. And this 14% is on consolidated basis or on standalone basis? No, standalone. standalone. Standalone EBITDA margin is 14.9% for the quarter. Second question was regarding our revenue growth. This quarter, it has been only 11% year- Sorry to interrupt, Mr. Shah, but we are taking only one question per participant. Okay. Got it. Thank you. Thank you. The next question is from the line of Pranav, who is an individual investor. Please go ahead. Yeah. Nikhil, I have got only one question that, as I understand, a lot of startups are also doing quite well in this field of space, and they are working on very niche areas. So when we are saying that this space sector is very interesting and the opportunity size and the size which Yashu is talking about is around roughly $3 billion-$4 billion. Now, are we planning to work with these kind of companies, or we will be working with some kind of multinational or foreign companies to take on bigger huge projects in future? Yeah. Thanks, Pranav. So in a nutshell, we are doing all three. So we are already working on partnering and working with some of these startups in different ways, either by doing some of the core parts of their satellites or in certain cases, we are also with the end users working on some sort of partnership type of agreement where we will be the prime contractor, and there will be a certain work share that is divided between what we do and the core IP or technology that the startup brings. So that's one aspect of it. But yeah, coming back to your question, there is the opportunity that we're talking about in some of these key and large programs will be driven through ISRO. And this is where our own internal capabilities and engagements that we have, combined with some specific strategic partnerships where we are working with some global companies, are both being pursued to be able to position ourselves to capture these opportunities. I would say, from a business perspective, from our visibility at least, the biggest share of it would come either driven by our own internal capabilities or in certain very specific cases, through the partnership with the global companies. Yes. Thank you very much. I would like to add one quick point on that. While we are quite open to work with the large private companies and international organizations and also the startups. Startups are something that we cannot ignore at this point of time because they bring innovation to the table. But what we do is we ensure that we don't lose money with them. We ensure that, because for every 10 startups, maybe two startups are succeeding exceedingly well. So, what we ensure is when we work with startups, we ensure that we get our money on the material front at least, definitely. Yeah. So we are not going to buy them out, or we are not going to enter into some kind of investment game. I hear you. Thank you very much. Absolutely. Thank you. Thank you. Yeah. Thank you. The next question is from the line of Anan Shenoy from AS Capital. Please go ahead. Thanks for the follow-up. Is there any update on Indra Sistemas on that MoU we had signed? No further update on that program. It is still basically stalled, and we have no further update from the government on this program. Good. Thank you. Thank you. The next question is from the line of Sai Vijay from Capstock. Please go ahead. Thank you, sir. My question is a follow-up question regarding the margins that someone had previously asked. You mentioned that the margins will vary across quarters due to different mix. My question is, our revenue recognition for Build-to-Spec is very heavily focused on Q4. Can we expect a more even distribution across quarters this year, or would it follow a similar pattern? Your observation is by and large right. If you look at in the past for 2, 3 years also, the margin expansion happened in the Q4. We were a little fortunate this year, I would say. If you look at even Q1, I think margin was better compared to last year's Q1. This year around, maybe it will be distributed. It is not on an equal basis. Maybe still, the higher margin probably would be top in the last quarter. This year it is slightly better than the previous years where most of it happened only in the Q4. All right. Thank you, sir. All the best to the team. Thank you. Thank you. We will take that as our last question for today. I now hand the conference over to the management for closing comments. Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our investor relation managers at Valorem Advisors. Thank you, and stay safe. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.