Q3 25/26

Feb 10, 2026

Summary

Q3 revenue rose 25% YoY and EBITDA 55%, with record 18.3% EBITDA margin; adjusted PAT was INR 35 crore. Management reiterated 40%+ core growth targets for FY26–27 while investing in manufacturing and product-led capacity.

Ladies and gentlemen, good day and welcome to the Q3 and nine months FY 2026 earnings conference call of AXISCADES Technologies Limited, hosted by MUFG Intime. 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 the 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. Sumit Khetan from MUFG Intime. Thank you, and over to you, sir. Good evening, everyone. I welcome you all to the earnings conference call to discuss Q3 and nine months FY 2026 results of AXISCADES Technologies Limited. To discuss the result we have from the management, Dr. Sampath Ravinarayanan, Founder, Chairman, and Managing Director, Mr. Shashidhar SK, Chief Financial Officer, along with the senior management team of AXISCADES Technologies. They will take you through the results and the business performance, after which we will proceed for Q&A session. Before we proceed with the call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to investor presentation and other filings that can be found on the company's website. With this, I now hand over the call to the management for their opening remarks. Thank you, and over to you, sir. Welcome. This is Ravinarayanan here. First I thank all the investors who joined. And welcome. As we conclude the third quarter, I am happy to inform you that we are firmly on track to complete the FY 2026 as planned, as projected, and we have also laid the foundation very clearly for FY 2027. I am confident of achieving the results. Basically, it boils down to EPS growth of nearly 40%-50% each year, which we will achieve in FY 2026, and we will definitely achieve the same in FY 2027. We are on track for that with enough forecast visibility, everything. We are fine with that. Overall, long-term mission, Power 930, INR 9,000 crores by 2030. We are building up the pipeline at this stage. A lot of things are being converted. We are working on some large partnerships and deals as we speak. Again, I believe we will be on track for the same. Of course, all dependencies include the facilities, some inorganic activities, acquisitions, et cetera, to gain strength and add new activities to us, and especially in manufacturing. That will happen. As another thing, another major goal for us is to, as you know that we are moving from services to manufacturing and product solutions, et cetera. For that also very firmly, we accelerate the process. We attempt to move faster than expected on that issue. We hope that we will have a significant percentage. This year so far it is 39% on products and solutions and 61% on the services. We will flip the same percentage by next year, by 2027. The facilities are operational, especially at the DAL, which has a fairly very good electronic manufacturing. Then certain labs are already operational, and we are able to attract some good customer base, especially from hyperscalers and large companies out of U.S. and Europe. That is happening quite well. DAL is kind of functionally ready, and then DAC, our ambitious project, Devanahalli Atmanirbhar Complex, is getting ready. The radar portion, the complete radar hangars will be ready by Q3. It should be completely ready. We are looking at large integration of radars and maintenance of radars in that facility. Looking forward to that. Again, we have to handle the inorganic growth, organic tracking, and also to focus on the growth areas and meet the Power 930. Also have investor relationships. We have brought in Mukund. Mukund is with me now. Mukund Santhanam. He comes with three decades of experience from IIT Madras, IIM Ahmedabad, has a very good combination of technology and finance. He will be assisting or helping us to achieve the results, et cetera. Overall, we are on track. Just wanted to reassure. I will let Sashi, our CFO, to discuss with you on details of our performance and what is going forward. Thank you. Thank you, Chairman. Good evening, everyone. Thank you for joining us today for the Q3 and nine-month FY 2026 earnings call of AXISCADES Technologies Limited. It is our privilege to present another quarter of strong operational execution and financial performance. Q3 FY 2026 has been a landmark quarter for us, with revenue rising to INR 343 crores, reflecting a 25% year-on-year growth and 14.8% sequential growth. EBITDA for the quarter stood at INR 63 crores, marking a 55% year-on-year increase and delivering our highest-ever quarterly EBITDA margin of 18.3%, an expansion of 360 basis points year-on-year. Reported PAT for the quarter grew 87% year-on-year to INR 28 crores at 8% PAT margin. Adjusted PAT after removing the impact of Labour Codes charge of INR 7.82 crores is at INR 35 crores at 10.3% PAT margin, underlining the strength of our improving mix and operational discipline. Our growth domains, aerospace, defense, and ESAI, constituting 78% of our total revenue, continue to demonstrate significant momentum, growing at 36% year-on-year, supported by accelerated program ramp-ups, robust order inflows, and healthy customer demand. These businesses remain central to our long-term value creation agenda and continue to reinforce our margin profile. Now, talking about the nine months performance. For the nine months of FY 2026, revenue grew 16.2% year-on-year to INR 886 crores, while EBITDA reached INR 144 crores, surpassing the entire FY 2025 EBITDA within nine months. Reported PAT is at INR 72 crores, with adjusted PAT after removing the labor code impact at INR 79.5 crores, which again exceeds the full year FY 2025 PAT of INR 75 crores. EBITDA margins improved from 13.8%. Sorry to interrupt, sir. Your voice is breaking, sir, while speaking. Okay. Hello. Sir, we are not able to hear you as your voice is breaking, sir. Are you able to hear me now? Yes sir, loud and clear, sir. Yeah. I will talk about the nine months performance now. For the nine months of FY 2026, revenue grew 16.2% year-on-year to INR 886 crores, while EBITDA reached INR 144 crores, surpassing the entire FY 2025 EBITDA within nine months. Reported PAT is at INR 72 crores, with adjusted PAT after removing the Labour Code impact is at INR 79.5 crores, which again exceeds the full year FY 2025 PAT of INR 75 crores. EBITDA margins improved to 16.2% from 13.8% at 240 basis points uplift year-on-year, demonstrating our continued focus on portfolio optimization, delivery productivity and cost discipline. EBITDA margins for the three growth domains were at 21.4% as against 18.7% in the same period of previous year, an improvement of 270 basis points. Our annualized revenue per employee at INR 0.54 crores improved 38% over INR 3.39 crores, which was in the previous year. Our other verticals of heavy engineering, automotive, and energy, with a combined revenue of INR 194 crores for nine months and constituting 22% of revenue, continues to be impacted by macroeconomic and customer-specific headwinds and is in the process of being recalibrated. The diluted EPS for nine months, which is now annualized, was at 16.73, which grew by 65% from 10.13 in the same period of previous year. Our balance sheet remains robust with a net worth of INR 730 crores and a net debt of just about INR 6500 crores as on December 31st. This quarter further solidified our transition towards a solutions and product-led business model under the Power 930 vision. The ratio of product versus service revenues pivoted to 39, 61 as against 33, 67 in the same period of previous year. Our new infrastructure, the fully operational Devanahalli Aero Land facility and the progressing Devanahalli Atmanirbhar Complex is already acting as a growth multiplier, enabling advanced manufacturing systems integration and new product development for global OEMs. We are encouraged by deals in Q3, growing global customer engagement and a healthy order pipeline, which strengthens our visibility for Q4 and beyond. As we enter the final quarter of FY 2026, our financial foundation is stronger, our revenue mix continues to improve, and we are building a more resilient and globally competitive AXISCADES capable of delivering long-term value for all the stakeholders. Thank you. We now open the floor for questions. 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 their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to unmute themselves while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Bala Subramanian from Arjun Capital. Please proceed. Good evening, sir. Thank you so much for the opportunity. Sir, my first question, I am looking at this geographic revenue side. U.S. has grown more than 50% year-on-year and APAC is more than 30% year-on-year, while Canada and Europe are like flat range. Could you please explain, despite having tariffs with U.S., how we have executed and how are the customers accepting that tariff levels and how we are managing, what is the arrangement between vendors and customers? We are not impacted by tariffs as it is. The activities we do. Hello. We are not- Hello. Are you able to hear us? Yes. There's a background noise. There is a background noise. Somebody has to mute. We are not impacted by the tariff as it is. Europe is very steady for us. There is a lot of growth happening in Europe. U.S. also is doing quite well at this stage. Overall, the percentages will remain the same. We don't see any major shift. Overall, Europe will remain very strong for us, continue to remain very strong for us. We hope that it will maintain that one-third U.S., one-third Europe, and one-third of India. That ratio will kind of more or less continue, there won't be any impact. With the European Union FTA, we're hoping Europe can do better. It's going to be slightly better, and with our strong presence in Europe, because we are traditionally having a very strong presence in Europe will continue to be a very strong hold for us. The U.S., because fueled by new hyperscaler orders and a lot of things happening in ESAI. As you know, the ESAI, 100% of revenues come from U.S. There is a lot of traction on ESAI currently, and we are getting a lot of momentum with the new facility. U.S. will continue to grow on ESAI segment. Europe will continue to grow on aerospace and the defense segment. That's all I wanted to tell you. Okay. Okay, sir. Sir, on the defense side, nearly 40% of revenue share is that. I am looking at the data, gross margins are nearly 43.5%, and EBITDA margin 46.2%, and EBIT margin 25.6%. But if you look at some of the defense competitors are anywhere 30%-40% kind of range. Just want to understand how do you look at defense margins. Our depreciation level also nearly INR 10 million in this quarter. We are doing massive capacity expansion on that defense side. How do you look at depreciation and CapEx side over next 2-3 years side? Yeah. Essentially, with respect to your question on gross margins, of course, it depends on the quality of the programs of what we are executing. In some quarters, of course, the programs of what we execute may be much more lucrative in terms of margins. Of course, in terms of the CapEx, it is still work in progress. There is a lot of background noise. With respect to CapEx, the CapEx cycle will continue for whole of FY 2026 and the better part of FY 2027 and FY 2028. The depreciation, I would say, will approve as per the, I would say the company operates as what is there. Sir, actually, I am trying to understand whether we can able to reach a 35% kind of margin. Mr. Bala Subramanian. You're talking about the Defense margin. Basically, we are looking at. We are not going to be anything different from the rest of the industry because we are working on the same programs, almost similar programs as our competition because we are sometimes bidding against our competition. All of us are in the same page. As far as margins are concerned, our overheads are also not that different at this stage. What we are looking at is that because the margins may look slightly in the lower side because a lot of warranty work is going on in defense, a lot of new programs or new bids are happening, which require initial investment or initial timing. As the program matures, the margins will keep on increasing. Definitely, there is no difference between one company to other because we are all winning in a competitive way. I think, start to expect in and around 30% plus or minus 5 as far as EBITDA is concerned on a mature program and proportional operating margins. Currently, most of our wins are from the new programs, and initially, there will be a little bit of impact. But as we progress, then the margins will keep on increasing. That's what I meant. Okay, sir. My last question. Sorry to interrupt, Mr. Bala Subramanian. Yes, ma'am. I would request you to join back the queue as there are several participants waiting for their turn. Okay, madam. Thank you, sir. Thank you. A request to the participants: in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. Thank you. We take the next question from the line of Jatin Jadhav from Sahasrar Capital. Please proceed. Hello, am I audible? Yeah. Please. First of all, sir, congratulations on such an amazing set of numbers. My first question is on the lines of, sir, where are we based on the development of the seeker for the different types of missiles which we were trying to address? Just a follow-up on that question, what kind of seeker are we building? Is it an RF seeker or an infrared image recognition seeker? That is the first question, sir. Sir, we are developing the RF seeker for bigger missiles, including for BrahMos and Kusha, et cetera. We had a very successful trial last week. It has been kind of, an RF side has been done and proven. Customer demo has been with all the RF functionalities, has been completed on 4th of February. Now what is remaining is the mechanical housing, total integration, improving. We hope that one level, it will be done by March, and then it will go through the trials and certifications. That may take another 3 months time. If everything goes well, by God's grace, we will be qualified. Ours will be the first seeker to qualify in everything, every aspect and the new type of seeker. We hope to complete the whole process by Q2, basically. This is for BrahMos and a similar seeker will be available for Kusha. BrahMos will be floating a new RFP by Q2. By that time, we have to be ready. That new RFP for the next future generation of seekers, and we should be ready by that time. Got it, sir. Sir, second question was on the recent update you mentioned regarding the mission computer for the LCA Mark 1. First of all, amazing work done. Sir, I wanted to understand, let's say, if we can apply this mission computer on any platform, is it platform agnostic? Of course, certain changes will be required. The follow-up, was the software which is used by the mission computer is also developed by us and deployed? Sir, the mission computer algorithm is provided by the defense labs. Whereas the display processes are basic software, then AI algorithm is provided by us. Technically, it can be used for other platform also, sir. It's platform agnostic. Currently, this is going to be in all the Tejas versions. The same thing is applicable to Sukhoi and every other platform also. We will be, hopefully, the first choice partners as continue as far as MC is concerned. Okay. Got it, sir. Thank you so much, sir. I'll get back into the queue. All the best. Thanks. Thank you. Thank you. We take the next question from the line of Nirali Gopalkrishnan from Unique PMS. Please proceed. Yeah, hi. Thank you for the opportunity, and congratulations on the good set of results. Sir, my question is on the guidance that we give out. So we still maintain the 40% growth in the core business in 2026, 2027, and followed by 70% in FY 2028, right? Absolutely. No change. 2026, we are all set. We are one quarter away, but we are expecting a very good result, followed by Q3. So we will stick to that core increase of 40%-plus. Similarly, 2027, we have reviewed today also again, the entire order book execution details, et cetera. We are firmly on track, again, on the core increase of 40%-plus. So we are very much committed to that, and we are on track. As far as 2028 is concerned, lot of dependency on the facilities, but we are having a three-pronged approach. Of course, current business has to grow in the similar pattern. Then inorganic. We are looking at few acquisitions immediately, and then we are also looking at facility-based growth. We have backed a good pipeline, and I am very confident about that also, 2028 also. But currently, let us focus on 2027. We are very firmly on that. I can assure you about it. Sir, the question because, sir, when you see EPS growth of 40%, 50%, and when the core business is growing at such a rate, the bottom line should grow ideally much faster, right? Because this is a higher margin business. Am I missing out on something, or are we seeing any pressure on margins on any of the segment, core business? No, the margins of the overall percentage has come down because of the non-core activities. If you look at it, our core, we have increased the percentage point by nearly 270 points. Right now, we just are averaging at 21.4. Because our non-core and other activities, that is pulling down. Even in core, our services are lower margin. Solutions, products, and all these things are at 25%, 26% margin. Whereas services is at 18.5% margin. No, sir. Sorry to interrupt, but my question was on your EPS statement that you have mentioned in the presentation, where you say that EPS will grow at 40%, 50%, because in the first 9 months only, the EPS has grown much faster than that. If you grow the core business at this rate, then the bottom line growth should be much faster than 40%, 50% that you have mentioned, and hence the question. I got it. The 50% is the minimum conservative number which we are talking about. As you would have seen now, the 9 months have grown by 65%. Essentially, the ratio of the downwards of EBITDA at the moment, just about 1 second. I will tell you. Currently, our EBITDA is going to be fairly good for this year. Our PAT, we are expecting to close. Whatever ratio I am giving will be that. That will be a good number, basically. Because today the labor, this thing, because that has reduced completely. Yeah. They are made from provisions and some lease of provisions we are making for the companies. Overall, with all the growth, there is no pressure on the margin per se, but extraordinary at this thing like expenditures such as ESOP and employee costs, and then especially in the labor, this thing. This will probably make us correct to around 45% growth on EPS. Okay. Sir, do you want to add anything? Yeah. So basically, as I said, from EBITDA line to the PBT line is about 7, 8% on what we have. So essentially the conversion will be much, much higher as compared to the conservative number which we are putting out. Perfect. And just one last clarification. So in the aerospace- I would request you to join back the queue. Yeah. That's it. Thank you. Thank you so much. We take the next question from the line of Koushik Mohan from Ashika Group. Please proceed. Hi, sir. Great set of numbers. Sir, I just wanted to understand the clarity on the I'll just continue on the same last question. Can you give me understanding on the EPS? Because last year, we did around 17.63 on the EPS, and this year we are telling around 40, 50%. But when we look at exactly what the Q3 we did around 6.52, and Q1 we did around 5.42 and 4.88 in Q1. So almost around last year's EPS is already achieved. So if the growth is considered, then it has to come around 25 to 26 rupees. Is my understanding very clear on this part? Absolutely. You are on target. We are looking at the same numbers, around 25, 26 EPS. We are looking at that. Okay. Okay, perfect. Also, sir, on the next year front. In one of the meetings, in the recent Bengaluru meetings, you also mentioned that we will be having a very good attraction on the top line as well as on the EBITDA level. So what will be on the EBITDA level growth that we can expect from this year to next year? This year to next year, again, we are targeting conservatively about 45% growth in EBITDA, and minimum. That is our bare minimum growth, and we are on target for that. It could be more, but in and around, I am just giving a band of 40%-50%. But currently we are well on track for the same. We are looking at I do not want to give numbers, but you can compute that. Basically, we are on track. Next year also, we are looking at a number, EPS number. You now have got this thing. So you said 25. You keep 45% on the top of 25. So approximately we will be able to reach that easily. Then we will look at seven. Yeah. I am very confident, and we are working towards that. In fact, that is our primary number we are targeting. So we are back working our EBITDA path and all the revenue numbers and the order books, everything based on optimizing the whole thing. That is all. That will be done for next year. Got it. Thanks. Thank you. We take the next question from the line of Rutujata Mhankar from RBL Securities. Please proceed. Hello? Hello. Yeah, please go on. Thanks for the opportunity. How much is the current order book and can you give clarity on the composition of the same? You are talking about the order book, right? Order book as of- Yeah. Our forecast visibility, I would say, because we are all program-based, we do not call that as an order book because it depends on the number of items they are going to order. For example, we are qualified either as we are the first vendor or second vendor in most of the programs. I will call it as a forecast visibility. Based on that, we have currently around INR 3,400 crores as our forecast visibility at this stage. We have enough numbers to close for next year comfortably as we planned. As far as pipeline is concerned, we have very robust pipeline, we are comfortable. Basically, in terms of growth areas, it will continue to be defence as a number one growth area for us and followed by ESAI. Aerospace will be moving more towards the manufacturing for the next year. The growth will be good, robust, but overall we will be able to manage the growth we are talking about. It will be defence first, ESAI next, and then aerospace. That is how I see that. Okay. What sort of programs are you looking for to be part of in the future and in defense space especially? See, we do not want to call it as programs, as we have a three-pronged approach. We are a very different company in defense compared to our competitors. We are the only company. We work on three activities. One is on the DRDO PSU side, which is program-based, and MOD, which is bid-based. Okay? Then there is the OEM-based, which is not program-based, it is offset-based. So we are working on all the three. Our main focus is on the OEM offset-based is going to be our main focus area for growth, main driver for growth in the future. Of course, DRDO is stable. Currently, most of our revenue comes from DRDO, BEL, that public system things, and item number one. But we are also looking at, we have got some interesting bids going on, RFPs going on with Government of India, and hopefully we should win some of this. Basically, in all the three, we have a very good chance, as I said. In DRDO, our baseline is assured because for the growth, it is assured because it is all long-term. We have five-year visibility in most of the programs. So we are firmly on track. Other two, yes, we are negotiating on the item number three and item number two, we need to see. Some of the bids are going to be known by Q1, Q2 of next year. Okay. Okay. Thank you. Thank you. We take the next question from the line of Deepak Poddar from Sapphire Capital. Please proceed. Am I audible, sir? Yes, please. Yep. Thank you very much, sir, for this opportunity. Sir, just wanted to understand, first up, you mentioned about very robust pipelines. Can you quantify it? What's the pipeline we are looking at in terms of order? What's your current order book? Current order book I mentioned last question, so you can take it from there. INR 3,400. Yeah, approximately. Yes. Yeah. So pipeline-wise, we are looking at around nearly Mukund, what is that figure? INR 14,000. INR 14,000. Our CGO confirms it is around INR 14,000 crores as of today, the pipeline. This includes the bids we have submitted and the contract relationships we are signing, especially with foreign OEMs. Long-term visibility of all these things we are discussing, put together qualified pipelines, which is being vetted and so on. I want to again, don't take it as a guidance or anything. This is a pipeline. There is a fair chance of converting this. Currently, we are very confident about this pipeline, and this is for a period of next four years. The general conversion ratio, what's the conversion ratio? As I said, OEMs, it has a pretty high conversion ratios because they are all relationship-based, and as the discussion closes, we will 100% convert them. In DRDO, the conversion rate will be 50% because there will always be one strong competition. Because there are two winners, there will be about four bidders in DRDO. So we are 50% conversion ratio. In MOD, it is a roll of the dice. It could go anywhere. But we are working on some interesting programs, and they are qualified. Overall, I can say good chance of 50%-60% conversion ratio. Overall. Overall, okay. Understood. Yeah. On the margin front, what is the differential we see between product solution versus service margins as we embark on a journey towards 80% kind of product solution? Any aspiration we have over the medium term, I mean, next five, six years to reach any aspirational EBITDA margins that we might have? Basically, we see a de-growth in services. Services keeps on declining in terms of margin. We struggle to get 18.5% EBITDA this year for the core services. Non-core, it is very poor. Services margin are going down. Products and solutions margins are increasing, and they are hitting that first 30%, 25% and above. Faster we move from services to products and solutions, we are better off. As far as your question is concerned, target next year will be about 20%. This year, we will be closing at 17% average, but next year it will be 20%. That is what we are aiming at, 20% margin. The following year will be much better. Okay. Right. 20% margin. Does that include your other income as well? No, it doesn't include the EBITDA does not include other income. Okay. I was trying to understand more on the aspirational part. In next 4, 5 years, do we have aspiration to reach 25% or something on those? Yeah. Of course. Once we flip the 18-20, you make the math because average products and solutions are at 25 at this stage. It is growing also. The margins in the products and solutions area are increasing. Definitely, there is a good margin available in the products as compared to services. Okay. So as per usual, we want to be among the top margin companies in the country. We are looking at 25, you call it as aspirational, yes. But in order to achieve that, we should completely move to products and solutions. Okay? Understood. Any ESOP cost we had? You can talk, Mr. Deepak. It's just a data point. I'm done. Yeah. The current P&L includes an ESOP cost of around 5 crores. Of course, this is going to go up in the coming year because there's a lot more outlay which is being planned for ESOP. So 5 crores in third quarter or overall 9? No. For all the 9 months of the current financial year. Nine. Yeah. So operator, there is a lot of disturbance in the background. Ask everybody to. Ask everybody to mute, please. All right, sir. What was this numbers for third quarter? No. We take a charge of around 2 odd crores every quarter. As I said, we are currently finalizing an ESOP plan for the senior leadership, and that's going to get enhanced for next financial year, which we will look kind of, how to say, talk about in the first quarter of next year. Okay. It will get enhanced in FY 2027. What is the ESOP cost you are looking for FY 2027? You see, as I said, the ESOP list is still being finalized. We do not want to comment on that. We will kind of have a clarity on this in the next financial year, Q1. Sure. Okay. I think that is very helpful, sir. I wish you all the very best. Thank you so much. Thank you. Before we proceed with the next question, a request to the participants. When the management is speaking, please mute your lines. The next question is from the line of Dhruv Shah from Ambika Fincap. Please proceed. Congratulations on a very good set of numbers. I just have one question, sir. In last three weeks, we have done two press release on order wins on ESAI. Can we just quantify the scope? Because right now the order wins is around INR 1.5 million-INR 2 million. But what is the scope eventually after three to four years down the line? I am assuming this is just a pilot. Yeah, this is the pilot. We are going to scale up for the production. That is where our new facilities we are going to use. All our U.S. customers, apart from design, we are also going to deliver the box build. There we are expecting the large order pipeline from them. Last week, one of the world's leading company came, visited us, inspected the facility. We are expecting the. This is a pilot, so we are increasing a multi-fold increase in the, once the facility is accepted, certified, et cetera. Last week, the trials and inspection went very well. Yes. Hopefully. All our leading ESAI customers, they have shown much interest. There are a number of customer visits that have been planned February and March. Okay. These two pilots. Sorry, sir. Go ahead. Yeah. These two particular customers, we are engaging in a bigger way. I also had a meeting with one of the customers, one of the hyperscalers in U.S. last week, who showed interest in diversifying and engaging with more activities with us. The facility has come out well. Apart from the Acoustic Lab, we have to set up the home automation kind of thing with multiple sensors such as millimeter radar sensor fusion, a large lab that can test multiple sensors for elderly living and home automation for a hyperscaler who is doing one of the companies which they now bought. This is more into the home and the hospital sensors. They need sensors for that. Basically, I had a meeting. It looks multiple way, as you know, the other guy who is a phone manufacturer, and they visited and we are looking at a bigger engagement of all these things. We can't quantify, but it will be, as I said, this whatever we got could be a tip of the iceberg and it could be much bigger in the coming days. I just want to keep you informed. By that time we finish all this pilot and everything will take about 6 months to 1 year. Don't expect something great happening in FY 2027. Maybe the order book will be there, but 2028 onwards, the facility will start giving much more results. Okay. But sir, this would be more like EMS contracts, right? So the margins will not be what we are doing right now at 24%, it will be much lower, right? No, it's higher. For example, I'll tell you, because we are testing, we are also making the flex boards and this particular one customer we are talking about has to change his device every year. So we have to make this device and give it to all the OEMs, all the manufacturers every year. So it is year-on-year change. So it's recurring plus the margins are very good. As per as defense margins are even more in certain cases. So we are looking at fairly decent margins. Competition is not much. We are okay with this thing. In ESAI and the defense will have similar margins so far. We are at 25%, 26%. In fact, ESAI is slightly higher than defense as far as we are concerned. Okay. Okay. We are at 36%, 37% in ESAI, EBITDA, and at 25% in defense at this stage, but we hope to improve that as we progress. Very nice, sir. Great, sir. Thank you so much for the opportunity. Thanks All the best for the future quarters. Thank you. Thanks. Thank you. We take the next question from the line of Poojan Shah from Molecule Ventures. Please proceed. Hi, sir. Thanks for the opportunity. My first question pertains to the defence segment. We are quite bullish on the segment called QRSAM from our customer, and we were expecting in Q4 that order will able to inflow. Are we on track? What are you hearing from your key customer? Is it on time, on track or it is now bit delayed? Can you just give a sense about that? Sir, QRSAM we are expecting anytime our order to be closed, sir. We are shortly anytime should come. Got it. Maybe two weeks. Within 2 weeks it's not our. It's okay. Timing is this. Understanding the hyper-- Hello. Please go ahead. Understanding the hyperscalers, we understand that right now the amount is too small. Just wanted to understand the context in how many years it was able to scale up from 1 million to, let's suppose, to get a certain amount of comfortable size we have been expecting from hyperscaler. I understand the ESAI might be understand the long time cycle in order or toward you, but just want to understand your projections on hyperscaler and how we will evolve with this. Basically, we are talking about currently two customers. You might have guessed. Okay. The one which can grow very well is because they are shifting all their manufacturing to India. India is becoming one of their largest consumers. There are multiple manufacturing lines coming up. What we are doing is important. Every station of the product, we are providing the test kits in every station, which is to be changed every year. Currently we are doing for one or two items for one line. Basically, imagine that it goes into most of the lines and around the world. The numbers look good. We need to prove a lot of things to do that. We can go from current level to 100x or 50x if we do it right. I don't want to speculate, but at the same time, it can go up. How big it is up to our capability and our skill. Competition is less. Maybe two or three, maybe one more person in India, and around a maximum of three or four around the world. We need to see how we are doing. As far as the other person is concerned, I believe we are going to be the exclusive person for labs. One lab we are already getting ready. Another lab, its growth will be slower, but still, we'll have good numbers there, basically. Again, we can say 10x, 20x are possible in that. Got it. Just a bookkeeping question. Can you just clear the split between the product and service business for defense? Currently, defense is almost totally into products and solutions. Okay. We have reduced the services. Services are very less currently in defense. Currently, our services are only a very little portion in ESAI and almost aerospace, full aerospace. But as we said, defense is almost totally converted into- Got it. product and solutions. Okay. Got it. Thank you so much. Thank you. Thank you. We take the next question from the line of Rohan Mehta from Ficome Family Office. Please proceed. I would request Mr. Rohan to unmute and then speak. Hello, sir. Am I audible? Yeah, please. Thank you for the opportunity. Could you give me an update on the potential divestment of the non-core business? Are we on track for a resolution by March end? Yeah, very much on track. Absolutely. I don't want to distinguish, but I hope the timing will be maintained. We are very much on track. Definitely by next investor call, we should be able to share all the details. Perfect. Thank you so much. That is all from my side. Thank you. Thank you. We take the next question from the line of Mayur Parkeria from Wealth Managers India Private Limited. Please proceed. Good evening, sir. Thank you for taking my questions, and congratulations to the entire team for continuously delivering quarter after quarter and sticking to the directional where we are going in terms of narrative, in terms of numbers, and in terms of capabilities and our execution. So great. Thank you. Yes. Great execution. Sir, I just had two questions. One is, one of our slides talk about the headcount breakup. In that, is the industrial breakup of around 30% is what we say is the engineering side? Because the core is 60 and support is 9. Yeah, 30% is the non-core, as we projected. Right. We are roughly around non-core. This will be part of the divestment. I understand. So, sir, if we understand, we've been looking for over now three, four quarters. That number has actually started to already gradually scale down substantially, it looks like. Because even one year before the numbers and now, so while the core may remain rising and maybe we are adding people. But on the non-core side, the numbers have already started to come down. Is it efficiency-driven, or we have started to scale down there? We are not filling the attritions, for sure. Anyway, because we are in the asset side, we are in the phase of doing this hiring, this thing. So we are going a little clear on the manpower, not adding anything at this stage. Anyway, as I said, we'll give you a clearer picture by the next investor call, which should have been over by that time. Okay. It's a very important goal for us internally, so that we start the next year on a very good note. That's what is very important personally for me. This, I kept it as my target for this particular financial year. So hopefully we should be able to do that. Okay. Right, sir. Wish you all the best for that. Sir, last question on the CapEx side. Sir, for the benefit of all of us, it's very difficult to understand because the segments are defence and aerospace, and what we are doing in even ESAI. So on the new facility, if you can help us understand the scale and the capabilities which AXISCADES is building over the next 12 months to 18 months, so that we can fully understand what we're trying to do in the various segments in terms of radar or missile, or in terms of aeros. No, sir, just to reiterate maybe just- Yeah. I got your point. See, we are doing three facilities as you know. DAL, which is Devanahalli Aero Land, then DAC, which is Devanahalli Atmanirbhar Complex, then there is MAC, Missile Atmanirbhar Complex. In this last one, Missile Atmanirbhar Complex, 8 acres we got the land, we are building the facility. It will be tailored for all missile electronics and missile integration. Electronics means all the foreign OEM electronics we are trying to build. This will include seekers, onboard electronics, then data links for the missiles, et cetera, and we are going to do it in collaboration with some world majors. Also we'll do for indigenous missiles. We are working on certain programs, and this will be a complete facility. This will be in two parts. One will cater only to foreign OEMs, only for India. It will have fairly good capabilities for missile integration, mostly completely for missile electronics. It will be a cold assembly facility without the rocket motor or final ammunitions, et cetera. It will be doing the final cold assembly for missiles. If it is integrated, it will take about two years time, but will be one of the finest facilities outside the public sector. Once it is ready, it is very unique, and that is what we are trying to do in Hyderabad. That is given the- Finest and largest. Will it be finest and largest? I would say both. I would say both, so far. At this point, as we speak, definitely in the segment we are operating, we will be the best things. We will be addressing all the aircraft-based missiles and so on. I think we are on a good target about that. The air-to-surface, air-to-air kind of missiles, basically. That will be our main focus on the Hyderabad facility. As far as Bengaluru is concerned, it is for about two to three activities, mainly radar. We want to have one of the best radar facilities. Again, this is on a three-pronged approach. One is to build our own large radar integration for larger radars. Which is both airborne as well as ground radars to build it. We are probably building arguably one of the biggest radar facility in India in terms of height and capacity, et cetera. It can go up to 63 feet or whatever it is with all the necessary hangars, et cetera. This will also cater to the maintenance of the radar, because India has lot of radar, which is very old, 30 years, 40 years, 50 years. We are looking at doing the retrofitting and maintenance of all the old radars and so on. That is another second thing. Third is, performance-based logistics and support for foreign OEMs, foreign radars. That is also there. This specific facility mostly catering to the radar. The other part will be aerospace manufacturing, mostly into tooling and certain parts and final inspection, supply chain management, et cetera. That is on the second part of the DAC facility. It will have radar, it will have aerospace. The third one is simulators, and mostly for the aircraft simulators, we are trying to work with the world leaders like Indra, where we are trying to get mostly for the defense aircraft simulators. Those simulators will be manufactured, and they will be supported in India. As you know, we have already done a very successful implementation of Dornier simulator, and it has been running very successfully in Air Force, and possibly we will get probably repeat orders and more simulators are expected. These are the three core activities we will be taking up in the Devanahalli facility. As far as DAL is concerned, it is purely for ESAI, mostly for ESAI, and certain system integration activities, where we are building Acoustic Lab, we are building laser lab, we are building IR, infrared. Somebody asked about infrared seekers. We are not only building for infrared seekers, but also we are looking at infrared countermeasures, basically. It will be a laser IR, the acoustics, and then MM wave radar, small sensor fusion. All these things will be covered. This is targeting a DSAI and certain level of design activities. With this, we will probably, arguably have in private sector, the most comprehensive R&D and support and manufacturing facility for these items in India. That is our goal. We should be definitely the first choice outside public sector on these products. That is our goal, and we hope to achieve that in the next 12 to 24 months. Great, sir. Wish you all the best. Thank you for a detailed answer. Thank you. Thanks. Thank you. We take the next question from the line of Jatin Jadhav from Sahasrar Capital. Please proceed. Thank you for the opportunity again. Most of my questions have been answered. But sir, regarding the missile facility you mentioned, it's very interesting that you mentioned that you will be catering to all types of missiles which are used on the aircraft. Just for further understanding, what kind of work will we be doing on these missiles? Will we be upgrading them, testing them, maintaining them? Could you throw a little more light on that, please? See, testing is going to be done in Bangalore only. As you know, government is very keen that all the future missiles to be made in India. Now they are mandating from effective from 2025, 2026 post Operation Sindoor, the missiles have to be made in India, most of the missiles. So they are going to reduce the dependency of foreign ports. Even if it is foreign aircraft, the armaments slowly have to be made in India. So we are looking at, first of all, as you know, just I'm giving you an example of number of foreign aircraft you will be knowing there are 128 Jaguars. There are nearly about 36 plus 29 Rafales, and about 50 Mirages, and there are going to be 287 light combat helicopters, which is going to be there made by HAL. All of them are requiring missiles at this stage, and all of them are planning to use foreign missiles at this stage or are already using. Sukhoi, of course, and these foreign missiles will be slowly replaced by Indian missiles of the same type. Maybe same volume will supply to those things, but completely made in India. That's the plan. Government of India has an ambitious plan, and we are dying to be part of it. That's what we can say. At this stage, we are doing everything in our destiny to get a small piece of action in this. That's the whole theory about this pack. Okay? I would say that, and it is not about maintenance. It will be the upgrades and the data links, those kinds of things will be there. Missile maintenance per se will be done in Bangalore. Maintenance, tester, equipments, et cetera, will be done. But this will be more of new missiles. As you know, missile shelf life is about 10 years and the maximum 6 to 10 years. So they keep on replenishing the missiles. That's what we are targeting. Okay. Got it, sir. My last question was on the mission computer. Sorry to interrupt, Mr. Jatin. I would request you to join back with queue, as there are several participants waiting for their turn. Got you. Thank you. Thank you. Before we proceed with the next question, a request to the participant. Please limit your question to two per participant. We take the next question from the line of Jai Chauhan from Trinetra Asset Managers. Please proceed. Good evening, and thank you for the opportunity and audible. Yes, you are. Yeah, you are audible. Sure. I just had a few questions. On the Q1 FY 2026 call, management guided that FY 2026 core domain order book itself is of around INR 1,260 crores with no major dependencies on execution. As we have seen nine-month FY 2026, and we have executed about INR 690 crores, implying roughly INR 570 crores still pending. I just wanted a clarification on how much of this remaining INR 570 crores scheduled for execution in Q4 FY 2026, and which major defence aerospace and missile programs constitute this remaining FY 2026 executable order book? Finally, the numbers we are going to execute out of this INR 1,260 crore, we may end up executing remaining about INR 300 crore right now. The remaining 200 facility dependence is there. We are pushing it to the next year, but this is more than enough to meet our target numbers, as you know. Probably, we will cross INR 1,000 crore in core if I do this. Approximately more than INR 1,060 crore, that is our target, which is compared to last year's INR 750 crore, it will still be 40-plus percent increase. We are carrying forward the left out to the next year. That is what you are addressing. As far as ESAI, the majority of this is defence, and the aerospace will be completing almost most of the order book this year. ESAI is the one which we are pushing for the next year also, because the facilities are yet to be fully functional and certified. To answer you, out of INR 1,260 crore, we are moving around 200 to the FY 2027, and keeping that approximately INR 1,060 crore to be completed this year. That is compared to last year's INR 750 crore. That will be a 40% plus increase in the core activities. Okay. Got it, sir. Which major programs constitute this remaining order book for defence and? We have answered many times this whole thing. I just want to go back. We are in almost all the major programs today. Both of them? Both in aircraft and missiles, we are participating there. Of course, as I said, we have a three-pronged approach. We are not only program dependent. We are also doing some of the MOD work, and we are also looking at foreign OEMs. Understood. Also, you guided for approximately INR 1,800 crore order book and visibility for FY 2027 in core domains. I just wanted to understand the source of this visibility. Specifically, did you have to assume that large part of FY 2027 visibility is OEM led and long-term programs? Because I think, as per my understanding, MOD and DPSU orders are more lumpy, and you don't have long-term visibility for the same, right? Yeah, you are right. As far as next year is concerned, again, our target is about 40%-45% growth in the core area. So we are looking at completion of, you know that now we discussed about the current core as done for INR 1,050 or something like that. So you add about 40% to that. That's what we want to execute in the next year as far as core is concerned. We are on target for that, and anything else will be again facility dependent and planned for the following year. That will be covered in our initial projections we gave on INR 3,000 and odd crores. So we are on track for that. As far as breakup is concerned, in the defense side, the foreign volumes will start kicking in a big way for the next financial year, much more than this year. Programs will continue. A lot of programs are maturing, and we are expecting a couple of wins in the next 1 month and going forward for the next listing. Very interesting wins we are having in the next 1 month, almost in the signing stage. We are looking at about INR 400 crores of win in the next 1 month, and for going forward for the program side. MOD, we cannot predict anything. It is again, as I said, roll of the dice. But we are working on, between you and us, we are working with the world's largest AI company, or one of the most prestigious AI company, for bidding some of the AI-based complete drone management systems and whatever you call it as. That is one thing which is big upcoming in a big way. Unmanned combat. Unmanned combat. Can you explain, Babu, about this? This is something which we are focusing as far as MOD is concerned. I do not want to reveal much, but we are working with the number 1 company in the world, and we have a partnership with them. Hopefully, that materializes, the paradigm shifts will be there in our whole area, because these each orders are big, multi-thousand crore orders. I do not want to put this as an agreement or anything. We have to keep our fingers crossed. But defense is more focused towards it. Babu, can you just throw some light on what exactly the type of programs? This is an unmanned combat system. We are working with the biggest OEM to implement the autopilot and also to entirely have the mission planning system and also the combat facilities on board the aircraft. This is a large program, one of the largest programs, so we are actively participating in this. Also there are many more on similar lines, both with the autopilot and also with the munitions enabled on this. These are our activities. These are the first gen AI, so that is going to be our big focus, AI-driven and all the intelligent combat systems, unmanned intelligent combat systems. That is the focus, and we have a very first good partnership. As I said, these are all like, you can treat the chances of 10% or something like that. I don't want to give too much of excitement because these orders are very, very big. As I said, roll of the dice order. But we have one thing going for us is the partnership we have. Probably the best in the world. Okay. More than best, it's the most proven in the world. Okay. We have a partnership with a U.S. company, which is proven, battle-proven, and probably arguably the leader in the combat systems. Okay. Unmanned. Okay. This is our roadmap going future as far as MOD is concerned. OEM is fine. That's going to be very good. As far as programs are concerned, it's happening. It's all happening. As we said, Mani next to me is our President. He's confirming that he's expecting about INR 400 crore the next one month. Yes. New orders for new programs. Okay. That's it. Thank you. Understood, sir. Understood. One last question. Sorry to interrupt, Mr. Johann. Just one last question. Just an update. Management mentioned that the TACAN development for Indra was completed and customer approved. The production order expected shortly, and I just wanted to understand the current status of that, the TACAN. I am passing it to our global president, Alfonso Martinez. Yes, hello. Handling Indra. Yes, exactly. Well, we signed a MoU in Indra to be the preferred partner in India programs. TACAN, it is already almost finished the deal. We are closing the paperwork now, and we will announce very soon. It is in partnership between Indra and Centrum and us, and the agreement is full now. We will give some details in the coming days. But I want to mention that this is just the first of a very big pipeline of joint opportunities between Indra and AXISCADES. This is in line with the Spain-India relationships that are flourishing. You know that next week, President of Spain is visiting Modi, strengthening ties on the defense program, and Indra is the leading defense company in my country. It promises to be. The relationship is excellent. This is the first project, and we have a huge pipeline of opportunities with them. Okay. Does it answer your question? Understood, sir. But I think you mentioned that the development was complete. What led to this deferment? No, the development is undergoing now. It is in the development and research. The program, I cannot give you more details on the program, confidential. No, the initial phase now is development. We are taking not only the role for manufacturing, we are the developers of part of the TACAN system, and in very close cooperation and very good partnership with Indra. Fine. Okay. Got it. That's all. Okay. Sumit, with this we come to the end of the earnings call for the Q3 and nine months of the current financial year. We thank all the participants, our investors, and other stakeholders who are on the call. Any queries which you may have, you may please direct the queries at our investor relations person, and he will answer that. I will also invite all of you to come to Bengaluru, visit our facilities. We will have one-on-one open house anytime you want. Please let us know. We will be very, very happy to host you and answer the question in person. Thank you. Thank you. Thanks. Thank you. On behalf of AXISCADES Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your-