Q4 24/25

May 27, 2025

Summary

FY25 revenue reached INR 1,031 crore, with growth led by core aerospace, defense and ESAI. FY26 priorities include strong EBITDA growth, product-led expansion and major facility investment, while non-core businesses remain under pressure.

Ladies and gentlemen, good day and welcome to the Q4 and FY 2025 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 has been recorded. I now hand the conference over to Ms. Sangeeta Tripathi. Thank you, and over to you, ma'am. Thank you, moderator. Good evening, everyone, and welcome to the Q4 FY 2025 and the full year FY 2025 results conference call of AXISCADES Technologies Limited. I am joined today by our leadership team to provide a brief overview of the business performance, financial results, along with our strategy ahead. We have with us today Dr. Sampath Ravinarayanan, our Chairman, Mr. Alfonso Martinez, our Managing Director and CEO, D. Balakrishnan, our Chief Operating Officer, Mr. Shashidhar SK, our CFO, Mr. Anurag Sharma, our President ESAI and CEO add-solution GmbH, along with Mr. Sharadhi Babu, our President of Defense. Before we begin, please note that this call may contain forward-looking statements based on company's current expectations, beliefs, and opinions. This statement involves risks and uncertainties, and the actual results may differ materially. Now I hand over the call to our CFO, Mr. Shashidhar SK. Over to you, sir. Thank you, Sangeeta. Good evening, everyone, and I am delighted to welcome you all to this earnings call for Q4 FY 2025 and the full year FY 2025. I hope you all had an opportunity to review our press release and the investor presentation, which are available under the investor section of our website, and the same are accessible in the BSE and NSE websites, too. To begin with, despite the challenging macroeconomic scenario in certain of our non-core verticals, we are delighted to report that we have closed the financial year FY 2025 with a significant milestone of crossing INR 1,000 crores in consolidated revenue. While we are recalibrating our automotive, energy, and heavy engineering verticals, our growth was led by our focus verticals of aerospace, defense, and ESAI. The full year revenue for FY 2025 was at INR 1,031 crores, recording a growth of 7.9% over the previous year in rupee terms and 5.7% in constant dollar terms. While the reported EBITDA for the year is at INR 142 crores, a growth of 7% over the previous year, the adjusted EBITDA came at INR 156 crores, a growth of 17% over the previous year, adjusting for non-recurring and one-time expenses incurred in Q3 and Q4. Our PAT grew by 2.25 times over the previous year at INR 75.26 crores as against INR 33.41 crores in FY 2024, leading to a diluted EPS doubling from INR 7.74 to INR 17.22. The company, since Q3 of FY 2025, under the guidance of our chairman, had embarked on major business transformation initiatives to turbocharge the business and achieve nonlinear product-led growth both in revenue and margins in each of our core verticals, namely aerospace, defense, and ESAI. The company is also evaluating and recalibrating its non-core businesses of heavy engineering, energy, and automotive, which are till date negatively impacted by macro factors and are growth and margin dilutive to the enterprise, as has been elaborated in our investor presentation. The company is deploying resources and costs for this transformation, which is expected to be stabilized by Q2 of FY 2026. These costs and investments are critical to ensure enterprise readiness to progressively achieve our aspirational target of achieving a billion-dollar revenue by 2030. Coming back to our business performance in FY 2025, our core domains grew by 12% from INR 671 crores to INR 749 crores, driven by aerospace, which grew by 13% to INR 322 crores and defense which grew by 16% to INR 303 crores, with production revenues from defense growing by 19% to INR 198 crores. Our non-core businesses of heavy engineering, automotive, and energy together constituted INR 282 crores in revenue, a 3% degrowth over previous year. Automotive and heavy engineering together degrew by 7% to INR 238 crores and energy vertical at INR 43 crores grew by 30% on a small base. The core verticals continue to record healthy EBITDA margins at 19.1% and is being diluted to 13.8% at an enterprise level due to negative margins in the non-core businesses. The reported EBITDA margin is at 13.8% for the year, which is the same as in previous year, despite the fact that the company incurred one-time and non-recurring cost of around INR 14 crores in Q3 and Q4, mainly in senior leadership settlements, legal costs, and one-time consulting for our automotive business. Adjusting for this, the EBITDA margin for the year is at 15%. Considering only our core businesses of aerospace, defense, and ESAI, our EBITDA margins are at a healthy average of 19.1%, with aerospace coming in at 21.2%, ESAI at 23.9% and defense at 15%. Of the defense revenues of INR 303 crores, if you only take defense production revenues, which was at INR 198 crores, the EBITDA is actually at 22%. The prototype revenues of defense at about INR 105 crores were very marginal and slightly negative from the point of view of EBITDA. We intend to improve our EBITDA margins by about 300 bps each year, with focus on nonlinear product-driven growth in core verticals and realignment of non-core verticals. As stated, our core verticals are already yielding EBITDA margins of 19%. With effective execution of product-led strategy, by FY 2028, the company aims to invert its current revenue mix of 80% service revenue and 20% product revenue, which will be the key driver for nonlinear margin-led growth, with the aim and objective of achieving an average of 24% EBITDA in the next two to three years. With respect to business performance in Q4 of FY 2025, the company's revenue was at INR 268 crores, growing by 4.8% year-on-year and degrowing by about 2.4% quarter-on-quarter as execution of some of the defense programs moved to the right. The company's reported EBITDA was at INR 37 crores at 14%, and adjusted EBITDA was at INR 45 crores at 16.8%. The company has been able to significantly reduce its finance cost from INR 56 crores to INR 32 crores with repayment of borrowing from QIP proceeds. The company's net debt is just at about INR 15 odd crores, excluding these liabilities, with gross debt standing at INR 189 crores and cash, bank, and liquid investment at INR 174 crores. The company has a healthy balance sheet with shareholders' equity standing at INR 656 crores as against INR 592 crores in the previous year. To conclude, we are highly enthusiastic and committed on our path ahead. Our focus on scalable product-led growth underpinned by significant investment in infrastructure and leadership positions us for sustained long-term growth. This strategy will enable us to unlock substantial value for our investors and stakeholders. I now invite our CEO, Mr. Alfonso Martinez, to provide his views. Thank you, Sasidhar SK, and good afternoon, everybody. I am really happy and pleased to participate in this, my first quarter presentation as our Group CEO. Complementing Sasi's presentation and speech, I would like to highlight the transformation of the company that we are currently driving. This transformation is going into three axes, as mentioned in the presentation. First is people. I am very pleased to announce that now our new management team is in place. We have all the presidents in place. We added veterans on the industry in a leadership position for the last 30 years, and this is already starting to boost our relationships with our clients. An amount of progress is being done in that aspect. This will lead, no doubt, to an unprecedented growth. We are also starting to train our existing sales force into a new way of selling, new way of engaging with the clients. Second axis of the transformation is moving from the traditional services to products and solutions. This is key for the margin expansion that we are forecasting. Third, the investments in key assets with very high return. This is already, as we will discuss later in the presentation of our Chief Operating Officer, leading to a new area. As a golden rule for next year, I would like to say we have three key objectives. First is a minimum growth of EBITDA of 50%, excluding ESOP cost. That's the very first target. Second, the profit after taxes will increase proportionally. Third point, we want to increase the quality of our revenues. With that, at least 300 basis points of EBITDA percentage improvement. This will lead to all the future, but for this year, these are the three parameters that we are targeting, and as a golden rule, we will achieve. Now, I would like to lead my presidents to present you the different verticals. Unfortunately, KP Mohanakrishnan, our new President for Aerospace, is not present. He is in a very important client meeting today, and I will take this part. Starting by aerospace, I will say that our target for fiscal year 2026 is at least 35% growth in revenues. That will change the path of growth of the previous years. Deepening engineering expertise, now empowered with artificial intelligence, moving from traditional service to really disruptive solutions. Some of our services are already ongoing this transformation with spectacular results. Also, we are building manufacturing and supply chain solutions. This action is particularly driven by KP Mohanakrishnan that brings with a strong background in these areas of manufacturing and supply chain. Our current Airbus engagement, our number one client in aerospace, we as a strategic supplier, are long-term settled with that. We are about $40 million of yearly revenues, and this is a long-term establish. We are also discussing to expand this partnership from these areas into new fields. Also forging new partnerships with the OEMs and tier ones of aviation. As you can know, India has become the center of gravity of commercial aviation, and that is a very important point in our strategy. Said that, I let the word to Sharadhi Babu in defense, and he will explain you the keys of this vertical. Please, Sharadhi Babu. Thank you, Alfonso. Good evening, everyone. This is Sharadhi Babu, President of Defense at AXISCADES. As you heard, we have created a very strong base for success with a stellar performance at 303 crores. We continue our focus on defense production and also very specific focus on new product development, especially in the areas of radar, electronic warfare, missile systems, and unmanned warfare systems. Right now we are on a very strong growth path, and we expect the growth to be at a rate of about 75% moving forward, and also on a similar focus on the bottom line also. Our order books are now reaching about INR 1,800 crores, and we hope this emergency procurement also will actually have some success for us. Then going forward, we are looking at a very strong defense growth. Also, we are having a very strong practice going on at the OEMs, and there are many programs coming up at the OEM level. Overall, we are looking at addressing the entire DRDO and also the MOD practice and also the OEM programs. With that, I would like to hand over the session to Mr. Anurag Sharma, who is the Head of our Electronics, Semiconductor, and Artificial Intelligence. Thank you. Hi. Good evening, everyone. I'm Anurag Sharma. I'm President of ESAI, which is basically electronic, semiconductor and artificial intelligence wing of AXISCADES. I would like to tell you that why three, what is the combination of these three? This is the combination of electronic, semiconductor and artificial intelligence is the one which is churning out the fastest and most innovative products across the globe. This is the space where we already belong. We have a very robust pipeline in terms of the order book. We are close to INR 600 crores plus of order books with us. We are doing a growth of more than 60%. Speaking more specifically on the products, we have a lot of focus on products. Products are not new to us. We have been doing products, but now we are offering complete system-level products. For that, we have taken a new initiative. We have started a product development center in Fremont, in California, where we have multiple products which are being conceptualized, developed, tested, and then manufactured across the globe. We also have started a lot of sales reinforcement in Europe with our headquarters being in Germany. We are trying to set up a product sales ecosystem across various channels, resellers. The idea is that our both products and solutions shall reach to maximum clients. We also have our company, add-solution, in Germany where we are doing a lot of wiring harness development and also specific products like micro data center and also solutions like thermal management. All these initiatives are with a view to increase our presence in this sector across the globe and increase our revenues. With that, I would like to give the mic to my colleague and COO, Mr. Murali Krishnan. Thank you, Anurag. Good afternoon, ladies and gentlemen. This is Murali Krishnan, Chief Operating Officer of AXISCADES. We have seen a vision in our Chairman's statement, which is there in our investment presentation. We have a vision to become a billion-dollar company in 2030. We call this as Power 930. As the COO, I take the responsibility to carry out this vision. This vision is also coming up with a high EBITDA of 24%, and this vision is going to be driven by flipping our product versus services revenue. From today's at a level of 20% product, we are going to move to an 80% product and solutions-based organization. In order to enable this, I do three things. First, enable the organization to deliver the AOP with the right processes, with the right resources. Two, transform the organization for the future. And three, provide world-class facilities and resources to take up our Power 930 vision. This infrastructure is going to come up in two places. One is called a DAC, Devanahalli Atmanirbhar Complex at Bangalore, which is a 20-acre facility. This is going to come up in three phases. Phase one is going to handle radar and electronic warfare solution, development, manufacturing, testing, maintenance. Phase two is for missile complex, missile MRO as well as missile manufacturing, while missile MRO would happen at Bangalore. We also are planning to set up another facility at Hyderabad to establish our presence in missile manufacturing. Phase three would come up with MRO, speed shop, and supply chain facilities for aerospace and defense customers. We want to construct these facilities in three years' time. First phase will come up in this financial year itself. This facility of phase one would cost INR 250 crores, and the first phase 1A of it would cost INR 120 crores, which would be mostly through internal funding. We are also looking for strategic partnerships for the infrastructure development, which is through a company called AAIPL, Axiscades Aerospace Infrastructure Private Limited. With this, I request our chairman to say the concluding remarks on our speeches. Over to you, sir. I think you One second, let me call him. Thank you, Murali. My colleagues have covered all the aspects. I've set the goal for the company, brought in the team of capable leadership team who can deliver the goal. However, I've tasked myself with the following. One is to create a robust silo or funnel that leads to a pipeline and wins to achieve the Power 930. So I've tasked myself with creating that silo, contacts, everything, that leads to this goal. Which has to be done in the next two years so that we can deliver on the third, fourth, and fifth year the goals while the AOP keeps going on. Second is, as Murali mentioned, ensure our DAC and MAC projects are completed on time. For that, we need resources and funds. So my job is to organize that without any dilution. The land is owned by a company, one of our group companies, as you would have known, called AAIPL, Axiscades Aerospace Infrastructure Private Limited. We are trying to leverage or bring some strategic partnership into that and achieve this. This is one of the options. As Murali also mentioned that 1A, we are splitting the whole approach into three phases. One year we are pretty much covered. Rest of the things we have to organize, so we have time to organize. The third thing is forge long-term partnerships and relationships to achieve this. Hope to get more for the work as well as for the completion of DAC and MAC projects. This will also have a sustainable growth and achieve the Power 930 in a sustainable way. With this, we are ready to take the questions, so I will hand it over to Sangeeta, who can just organize the questions. Thank you. Thank you all. Yeah. We can start with the Q&A. 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 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 Kaushik Mohan from Ashika Group. Please proceed. Hi, sir. Thanks for the opportunity and great set of results. Sir, can I just understand this one-time cost on the P&L that we have it on more clarity basis? Yeah. Kaushik, thank you for the question. See, essentially, as what I explained in my speech, we went on a complete transformation initiative from Q3 onwards. One of the major parts of this is kind of complete overhaul of the leadership team. Essentially, the major cost with respect to the INR 14 crores which I mentioned, pertains to it not only was in India, it was also across globally, where we had to do a kind of a voluntary separation for our leadership, including our previous CEO and various other leadership positions across the globe. Also, we had to incur certain, I would say, one-time legal costs in the course of a few exits, so to say. Then we also took a specific consulting from Zinnov with respect to our automotive business, which I would say especially for add-solution GmbH in Germany. All of this amounted to INR 14 crores, which in a way are non-recurring in nature, which will not repeat next year. Got it. Sir, second thing, currently in this quarter, we have achieved almost around 16.8% EBITDA margin, and we are talking about a target of Power 930, where we are talking about a 24% EBITDA margin. What are the key levers which will play out in this specific margin increase, and how is that planned towards achieving that? Also, can you relate this with that 80/20 rule that we're talking about, product as well as the solutions? Yeah. Before I hand it over to Alfonso and Murali to kind of state detail on this, I would like to say that while our blended EBITDA is at 13.8%, you would observe that the three main core businesses where the future growth is going to come is already at a 19% EBITDA. If you look at aerospace, that's at 22%. If you look at ESAI, that's also at about 23%-plus. If you look at only the defense production, that's already at 22%. The approach is to take it from here and drive it towards a product-led approach. I will ask Alfonso, and also Murali, if they want to delineate on how these entire drivers are going to work out. Yes, exactly. As Sashi said, it is mainly driven by our focus. Our focus in aerospace, defense, and ESAI will bring this margin improvement. If you see, as saying, we are running there around 20% in combination this year, but specifically also defense is only at 15%, and we will expect for next year, for fiscal year 2026, an expansion of that EBITDA margin very clearly. So it's a combination of keeping improving the balance between core and non-core, and of course, also increasing the quality of our revenues. We are very much secure on that. I don't know if you want to complement Murali or more or less this is- Yeah. Thanks, Alfonso. I think you are right. Once we focus on products and increase the share of our products, the EBITDA margins are improving or going to improve. Also the uniqueness of the product. If we are the only supplier and if our products are innovative and unique, the margins are going to be higher. That is the way we want to go forward. 80/20 is the way where we will increase our EBITDA. Chairman may please add if you want to have any comments on this, please. No, I am fine. As we said, that this is a goal we have set. As Sasidhar SK explained, we are already at 19.2% in the core verticals. And defense is also, if you take only the defense product solutions without taking out the one-time development cost, it is at more than 20%. So we should be fine if we keep the focus, and that is what we are planning to do. Okay, great. Thanks for this, sir. I will come back in the queue. Thank you. Before I take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Jatin Jadhav from Sahasrar Capital. Please proceed. Hello. Am I audible? Yes. First of all, thank you so much for this opportunity, and congratulations on a great set of numbers. I have two questions. One is, sir, can you again briefly explain to me the phase 1, phase 2, and phase 3 in brief? My second question was regarding phase 2. If I heard it correctly, you were trying to build a facility for missile MRO and manufacturing. I wanted to understand what kind of missiles are we targeting to manufacture for the defense clients, and what kind of MRO facilities are we trying to build over here for existing missile systems or for the future missile systems? Those are two- I will take these questions. Basically, phase 1 is meant for all the strategic electronics. That will cover normal electronics also. That also includes radar, electronics warfare, strategic electronics, and ESAI electronics. That should cover pretty much our strategic electronics group and ESAI group. That will have a manufacturing facility and high-level test facility, including anechoic chamber, et cetera, which there are very rare availability in India. It will also have large hangars for radar maintenance, radar assembly, et cetera. That means radars are widely used. For example, I am just giving an example. Some of the AWACS use large radars that can come in and then test it. This will have wide hangars to test all these things. This is phase 1A. This will cover radar, electronics warfare, and all the other strategic electronics and normal electronics. Manufacturing, testing, assembly, and so on. The phase 2 we talked about is missile. Missile has two parts. Missile, we maintain the launchers. When we say missile maintenance, there are two parts. Launchers and missile transportable test benches, where the missile can be assembled, the four components of missile can be assembled at the war zone or wherever it is. These are some of the ecosystems we are building, and also we are building the ground systems. That part may happen in Bangalore. But the main missile part, when we say missile manufacture, this is more like an assembly. Some parts we are planning to manufacture, including airframe, including rocket motors, and even the munitions for missile at some point of time, warheads, and then the nose cone, the front part. Of course, missile electronics, that is onboard computing, et cetera. The whole integration will happen in Hyderabad. We are targeting to manufacture more. We are focusing on smaller missiles, which is more into air-to-surface and so on. I do not want to reveal too much, but this will be the focus on the missile side. Third is MRO, speed shop, and manufacturing will be focused on dual use. That will be mostly for both aerospace and defense. There are many aircraft. For example, Boeing aircraft are used for Boeing 737 is used in defense as well as here. Airbus is used both in the- So there are cases where there are a lot of dual-use aircraft and helicopters. We will be doing maintenance of the parts, both avionics and engine parts and some parts of the airframe, and manufacturing and supply chain for this. This will be phase 3. Except the missile-related activities, missile assembly, everything will be in Bangalore, which will be Devanahalli Atmanirbhar Complex. Missile Atmanirbhar Complex, that will be in Hyderabad. That will come up in a six-acre facility, which we are yet to buy. We are in the negotiations with the Telangana government, or talking to the Telangana government. Not here. We have acquired the land, and we are starting up the work. We are in the plan approval stage at this stage. Okay. Thank you. Thank you so much, sir. I'll get back into the queue. Thank you. Thank you. The next question is from the line of Karti from Suyash Advisory. Please proceed. Good afternoon. Thanks for the opportunity. Sir, I just wanted to understand the visibility for the revenue growth guidance that you have given, 35% for Aero, 60% for Defense, and 75% for ESAI. I hope I got those numbers correct. Just wanted to understand how much of this is contingent upon maybe order wins or whatever, or customer approvals, to go ahead. How much of this is, shall we say, routine? Some clarity on that would help. Alfonso, would you want to talk about Aerospace first, followed by Sharadhi Babu on Defense, and then of course, Anurag, who will explain about ESAI. Yes. On aerospace, we have a base of revenues that is secure with our current customers. Luckily, both customers are in a good shape. The revenues that we make this year is nearly secure for next year, plus some expansions. That's securing a part of the growth in aerospace. Also, the rest is coming from the pipeline of opportunities that we have now. It's a pipeline we started to build, basically, when I joined. We are now weighting the pipeline, and with the secure revenues plus a weighted pipeline, we are nearly 90% secure on the revenue increase. We are starting the year, and there is always some deals to be won along the year. I hope that we are putting a lot of hope in the Paris Air Show, in which we will participate. We may have announcement of some important deals that will come in the aerospace side. Basically, it is an estimation that we are pretty much secure, and we are very confident on getting this 35% growth of revenues in aerospace. Maybe, Babu, you can complement on the defense side. One quick question. How much would be the two customers' contribution? The two current customers? Yes. Yes. That's nearly a similar revenue to this figure. If it is a 35% increase, you can make the maths very easily. In the current customers, we are expanding about 10%, basically. Okay. Sure. The rest is coming from the pipeline with new customers. When I say new customers in Airbus, that is very big. Airbus is a full ecosystem. We have one current customer in Airbus, but Airbus is a very big group, and we are expanding into new areas as well. Sure. I heard you. Thank you. Thanks, Alfonso. Covering the defense part, the defense growth is coming from much of our defense production, where we are, as you know, we are part of the LCA Sukhoi and also the AWACS program. Both the radar and EW are going on multiple platforms. Production is from all these programs. Also we have the MOD programs. We are implementing a large land systems defense program in the coming year. Also the OEMs, this thing has opened up with various activities happening, and the new procurement from Defense has triggered a lot of OEM programs. Much of activity is also happening on the global OEM programs. It is spread across all these three areas. I just want to clarify, the question was little captured wrong, that Defense is 75% and ESAI is 60% growth. Just to reiterate that. That's all. Okay. Thank you. Sure. Also the counter-drone systems, where we are in the forefront, and we have already supplied 100 systems to the Defense. We are expecting repeat orders and also the new programs. There are a lot of, the counter-drone is the most wanted system across the Defense now. We are leading this entire program in the supply of these counter-drone systems to the Indian Defense. Right. If I may clarify, what would be production revenue in FY 2026? You did INR 190 roughly in FY 2025. Production revenue is- This year, FY 2025 was around INR 196 crores. Yeah. We are talking about probably doubling it in FY 2026. Okay. Thank you. Thank you. The next question is from the line of Nishid Shah from Ambika Fincap Consultants Private Limited. Please proceed. Yeah. Hi, this is Dhruv. Congratulations on a good set of numbers. I have just one clarification on the Defense side. The deal we announced- Apologies, Mr. Nishid. Could you- Can you hear me? Please closer to your device? Can you hear me? Hello. Yes. We can. Yes, sir. Yeah. I just had one clarification on the Defense side. The deal we announced- In the test bench, is any revenues included in the growth which we are seeing, 75%? Yes. Which deal you are talking about? We are not able to Hello? The MBDA deal which we announced in January for the test bench, have we included any revenues from that, sir? Babu, can you answer this? Center of excellence which we inaugurated. Yes. We have revenues in that program in FY 2026. Yes, sir. Okay. That's it, sir. Thank you so much. Sure. Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please proceed. Sir, am I audible, sir? Yes, you are. Yeah. Thank you very much, sir, for this opportunity. Just wanted to check, our INR 9,000 crores kind of a target in next five to six years, basically. That kind of equates to about 40%-45% kind of a CAGR over next five, six years. Just wanted to understand, do you expect this growth to be evenly phased over the years or do you expect it to be front-ended, back-ended? What sort of thought process you have on that? Yeah. I'll take this question. This year one, let us call this as T1, T0, beginning this right now. This will be a normal year. The AOP will be met, as CEO mentioned. We are looking at a 50% EBITDA growth and proportional PAT growth this year. Because we are at the infrastructure, I think 60% should be ready. Next, some fraction other than the AOP figure, something towards the Power 930 organization will come next year. But the third, fourth, and fifth year, I think we will ramp up faster because by that time, most of the DAC will be completed, MAC will be completed, all the third phase will be almost on. All the lines of revenue streams will be ready. I think it is still a vision, but I would say that it's very much possible to achieve this. Okay. This year, we are targeting 35% growth at the company level? This year, see, we are not looking at revenue per se. The revenue will be 33% I guess. But I am saying profit after adjusting to with the, because we have a huge cost on ESOPs. After adjusting, our EBITDA still can be around 50% growth from the current level, and PAT will be proportional and EBITDA margin will be at least at, I think 17%. So average. You can do the math, what should be the revenue and what should be- Understood. What is the FY 2026 ESOP cost we are expecting? Around INR 50 to 60 crores. Around INR 50 to 60 crores? Yeah. Okay. What is the tax rate? This tax rate, we have seen some- Not ready. Yeah. Yeah. The tax rate is, we have now moved to the new tax regime. Of course, as you know, we have global operations and each of the, I would say our global operations have a different tax rate. But in India, we have moved to the new tax regime at 25.82%. 26% is the effective tax rate we can expect at the country level. That's right. What was the one-time provisioning cost in fourth quarter? Sorry to interrupt, Mr. Deepak. It's just the last question, yeah. Joined the queue. One time provisioning? I didn't get you. One time cost in fourth quarter. Just one time cost in fourth quarter. Out of this INR 14 crores, what was the cost in fourth quarter? The fourth quarter was around INR 9 crores. INR 9 crores. Okay. INR 7.5 crores. Let me correct myself. Seven and a half. Okay. Yeah. Okay. That's it from all the anyways. Thank you. Thank you. The next question is from the line of Aastha from PKEDAY Advisors LLP. Please proceed. Hello, am I audible? Yes, you are. Yeah. Thank you for giving me the opportunity to ask the question. Sir, first I want to ask you, we saw the slowest growth in this year, in FY 2025, compared to last three, four years. What was the reason? What happened? We saw 13% growth in aerospace, which was again slower than compared to previous years. Sir, in the similar line, I want to ask you, what was the revenue growth in automotive segment? No, the automotive segment, talking about the revenue growth as such, you are right, the core businesses is where the actual growth happened. Most of the, I would say, management bandwidth as well as, I would say our efforts were getting into ensuring that we reset the non-core verticals and we were exposed to the macro factors, especially in automotive. Just to give you an example, the acquisition which we did of add-solution GmbH in Germany, where I would say Volkswagen was a main customer, which there was a huge degrowth there, so we could not achieve the objectives. That was the issue there. Also with respect to the acquisition which we did in energy of Epcogen, yet to hit critical mass. As a result of which the non-core verticals, I would say, impacted the overall growth in terms of the business. As to the automotive vertical, the total automotive revenue was INR 91 crores? INR 90 crores. INR 90 crores as against INR 104 crores, which we recorded in FY 2024. Sir, but even aerospace grew only by 13%, whereas if I see from FY 2022 to 2024, it has grown pretty well. Yeah. Because I would say we had some new programs which we started implementing. No. Sajith, that is post-COVID. That is built up. That is clear because there is a complete lot of RFI held back as a result of- Yeah. So just to elaborate on what Dr. Sarin just now stated, if you look at the period from FY 2023, if you look at FY 2022, which was the period of COVID, the revenue dropped by 50%. So when the COVID growth came back, it came back with a vengeance. So that kind of stabilized in the FY 2024 and onwards. Sir, going forward, should I expect 13%-15% growth as my aerospace growth? No, I think I'll take the question. Madam, this year, we are expecting as our CEO on behalf of Mohan said, 35%. If I can give the figures, approximately we did about INR 38 million in aerospace. We are targeting about INR 51 million this year, approximately. Wow. Okay, we can expect, and we are looking at a similar or better growth next year because we'll be adding products and solutions to this. Okay. Got it, sir. My next question would be, is it possible to say- Sorry to interrupt, Aastha. Could I request you to return to the question queue as there are several participants waiting for their turn? Sure. Thank you. Thank you. Before I take the next question, ladies and gentlemen, to incorporate all questions, I request you to limit your questions to one question per participant. The next question is from the line of Nirvana Laha from Badrinath Holdings. Please proceed. Hi, thanks for the opportunity. My question is regarding the ESAI segment. If I look at the revenues this year, they were flat. They are guiding for, I think, 60% growth in EBITDA next year. Can you please elaborate on what programs or what clients will help us drive this? Some details on where we can understand what tangible programs or clients will help move this will be very helpful. Yes, of course. This is Anurag Sharma here. You see that we are basically also doing a revision in our strategy where we are moving towards product-driven growth. In that context, we have introduced some new products also in this year. That is why we are very much confident of this growth, which I spoke about. We already were doing a certain type of products for our OEM clients in the semiconductor segment, and we were doing high-end electronic design and PCBAs. But now we are doing our own system-level product which directly go into the market. This is something which is a renewed strategy and very effective one, and that gives us the confidence to move forward. Thank you. Sir, just a follow-up on that. 60% EBITDA growth. I think we reported 24% EBITDA margins this year. The EBITDA growth, how much of that will be driven by top-line growth and how much will be driven by further EBITDA expansion, if you already have some plans around that? You are talking about ESAI or you are talking about the company? No, ESAI. ESAI is INR 125 crore revenue, I believe, with INR 30 crore EBITDA. 60% EBITDA growth that we are targeting, what will be the spread between the revenue growth in ESAI and further EBITDA margin expansion? It is mostly coming from the revenue growth. We are going to substantially increase the revenue. You see, we have added a lot of new logos. Earlier there used to be two, three logos which were kind of focused with respect to the entire ESAI revenues. Now we are adding quite a lot of new logos, especially in the U.S. region, which is going to kind of, I would say, take this forward. Yeah. Yes, if I may complement, the revenues flow in ESAI in the previous year has been delivery-led. It is basically the sales done many years ago, and we have continued. What we have done now is really boosting the sales and the relationships with the clients together with a new product strategy. So the continuity of the current revenue streams is there, but on top of that, we are adding new OEMs, new clients, et cetera, and new product range. That has not been done in the company for the last years. This is a new era now. We have impressive. So anyway, Yeah, please go ahead. Traditionally, we had only two silicon manufacturers with us, which have brought in 90% of the revenues. Now we are adding about three or four more silicon manufacturers to work with. Number two, we have taken a strong China plus one strategy. So under tariff plus one strategy. That means that we are going wherever there was a replacement activities are required. That has boosted our order book. The entire 60%, we can say is almost 90% of this covered with already an order book right now. It is a question of execution. There is a robust pipeline and customer base. We have some marquee customers. So basically these three things gives us the confidence. And EBITDA growth is proportional. There won't be a bit growth. There is no basic point growth. The EBITDA will remain almost same percentage, but it will be a result of revenue growth. Revenue growth will be there. Also, there is a small element of ESAI with Mistral, with ESL, everything is being spread under. Thanks a lot. Thank you. Before I take the next question, I would like to remind participants, please limit your questions to one per participant. The next question is from the line of Dhaval Jain from Sequent Investments. Please proceed. Hello, sir. I just wanted to understand the contribution from our core business going forward, because right now what I see is out of the total contribution that we have in aerospace is 31%. Defense is around 29% and ESAI is around 12%. Moving forward, how is this mix going to change? Is it going to be evenly split or is defense going to be more contributing to the core domain? Let me answer this question. Ravi Naik here. We are expecting at 2028, leave the non-core aside, we are looking at 40% in defense, about 30% in ESAI and 30% in aerospace. That's a mix we are expecting at this point of time with the visibility among the core activities. Okay. Also one more aspect of it I might have missed out on. I just wanted to know about the CapEx that we are doing for the three phases that we are going to put in. I see that we are going to put around INR 250 crores in the phase one, with phase 1A contributing INR 120 crores. Can I have the understanding of how you're going to fund the phase two and phase three, and what will be the total CapEx overall? My agrees to other thing. Phase 1A. In phase one, we have divided it as phase 1A and phase 1. Phase 1A pretty much is that is INR 120 crore. That we are already allocated INR 45 crores from our internal source, and we'll be allocating more money. We'll do it internally. It's only onwards we require external funding, which our main focus is going to be on with strategic partnerships for the development of the whole thing. That's what it is. Okay. We don't currently have the entire CapEx that, I mean, the entire amount of what we're going to plan in, or is it going to come later stage? You see, as Dr. Esaran explained, what we have on the radar and which is under development, where the plan is at an approval stage, is the phase 1A. Where the CapEx, including the building as well as the equipment, is going to be anywhere between INR 100 to INR 120 crores. Of which- Right Most of it, our objective is that most of it should be through internal accruals. As I have already mentioned, the company is sitting on cash reserves. At the same time, the generation of EBITDA in FY 2026 is also going to support that. So that is how the phase 1A is going to be funded. Onwards, basically, as what Dr. Esaran was explaining, we are working on partnerships where there can be a contribution from the partner who we negotiate with, the OEM, which will take this entire CapEx forward. Okay. Sir. Thank you. Thank you. The next question is from the line of Ruchita Katge from iWealth Management. Please proceed. Hello, sir. Very good evening. My question was essentially on the CapEx part only. On the phase one that we are talking about. The phase A, I understood. Could you please reiterate on the phase B, what would that be? By when do you expect the A and the B to come? How much revenue can each at the peak capacity contribute? Yes. Work has started, somewhat the planning, approval, et cetera. We hope to complete the phase 1A by December this year and moving by January 15th at the latest. Phase 1A is on track. Phase 1B, as we conceived, will have certain level of tool room, machine shops. We call it as peak volume manufacturing shop and some kind of activities for supply chain and inspection equipments. These will come in that. More towards aerospace, to take care of some of the aerospace activities. More onto the one-time development, one-time manufacturing of aerospace parts. Just to explain to you, around 90% of the volume spent, that is, Airbus going on their ecosystem, spend their entire money with the Dr. Esaran, we are losing you. Hello? Yeah, I think we can take the question. Yeah. Yes. As Dr. Esaran explained, there is phase one, which is about one year away. We are able to complete that, and then we will move and start operations next year. Phase two and three, which are for missiles as well as for the MRO and speed shop, that will come in the subsequent years. About the phase one, if you could tell that what is the kind of peak revenue that we can expect in the phase one? This will be a part of our upcoming AOP. Phase 1A is more related to radar. No, we are expecting, just to add to what Murali said, we are expecting a healthy kind of an asset turnover here. At least by 2 to 2.5 times is what we can expect. How fast can we ramp this up? Revenues will start as soon as the facilities are ready. Our plan is beginning of next year, that will be ready. Sometimes, today's supply chain of equipment and so on is difficult to predict. We are very confident that beginning of next year, and we have some client discussions also. So revenues will start flowing early, as soon as the facilities are ready. The pipeline is very big, and we are more or less securing the contracts in parallel to the investment in the phase 1A. That will boost specifically FY 2027. It's very difficult. These facilities are going to be ready at the end of this year, so the impact will be in the subsequent years. The return on capital expenses is very high in everything we are planning. This is for phase one, basically. Next phases are depending on the customer negotiations and the client partnerships that we are closing in this year. As long as we will be announcing the partnerships, the investments will be also putting into know of the community. Okay, understood. This ESOP cost, what was that for FY 2025? The ESOP cost for FY 2025 was kind of marginal. It was less than INR 5 crores, let me say. Understood. Then, just to, a follow-up on this. Yeah. The- Ms. Ruchita, we are so sorry, but there are a lot of participants waiting for their turn. Okay. Could you please return to the question queue? Yeah. Thank you. Thank you. Yeah. The next question is from the line of Aman Brij from Astute Investment Management. Please proceed. Yeah, good afternoon, sir. My question is on the defense side. Could you give some more clarity that till last quarter or maybe one, two quarters back, we were talking about 30% kind of production growth. What has changed in last one, two quarters that we are now talking about 100% growth in our production revenue? If you can talk about some of the interesting programs which is coming up, which is helping in this. Is this the Netra program? If you can give any update and also on counter drone and PG drone pod update, if you can give on these three programs. These are the questions I have. Sure. Mainly the defense program, the production is coming from, as I mentioned, in one of the previous answers, there is a ramp-up in production. We are significantly contributing towards the production of the LCA, the Su-30 upgrades, and also in the AWACS. Also we are having the direction finding system is going on multiple platforms. So much of the production is happening in this direction. Also there is expedited deliveries. In fact, we have the orders. It is the execution, which is more where we are focusing and then enhancing it. Also, with the culmination of the new orders from the OEMs like the Mara and Rafale and others, are also expanding our OEM footprint. We already working with many global OEMs, and there the expansion is happening on an accelerated mode. In the MOD, number one, we are implementing a land system project, and also we are expecting this emergency procurement to lead to certain quick supply of systems, where we are expecting this emergency procurement and also maybe there'll be one more iteration also will contribute to our enhanced revenues. Yeah. The clarification on the emergency procurement part, what kind of contribution do you think can come from that? Sorry, this Su-30 and AWACS. So these programs were supposed to come in FY 2027. So is it getting pre-poned or when you are talking about so many programs, all of them are coming in FY 2026 itself? There are some systems, subsystems already the production is going on and then deliveries are going on. Some of them are coming up in this year and some quantities are next year. Also the emergency procurement, there are 10 lines of items the Indian MOD has embarked upon acquiring in a quick succession. We already fielded our equipment in four categories. Then, at least we have very high confidence that we should be able to win one of them. Also the same will also repeat in a very quick succession down the line. Sorry. What is the order we are expecting from EP emergency procurement in the next one, 2 years? No. I will not be able to disclose the values, but we are hoping for sure wins. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Pankaj Parab from Molecule Ventures. Please proceed. Hello, am I audible? Yes. Hello. Yeah, please go on. Yes, you are. Yes. Thank you. Thank you for the opportunity. My first question would be on the recent traction in the anti-drone system. What kind of new opportunities that we are seeing, and are we developing any new system except from the existing system in anti-drone? Yes. We are actually expanding our anti-drone systems offerings. We are in the counter-drone systems. We are already in the man-portable counter-drone systems, and now we are offering the handheld systems also. Also we have worked on the vehicle-mounted, and we have offered the vehicle-mounted systems also. Going forward, we are actually creating our own internal portfolio of long-range and programmable jammers and future add-on integrate our own radars. We will be offering a full suit of counter-drone systems, including all the sensors and the kill options. There are both soft sensors and soft kill, hard sensors and hard kill options. All of them will be part of our offerings. It is a pretty interesting portfolio of products and also a very good pipeline coming up. Already, we are in the forefront of counter-drone systems in the Indian context, and also we are expanding globally also. Sir, can you please elaborate some of the order in the counter-drone system in FY 2026 that may be converted into revenue? The values, I will not be able to disclose. But I am sure counter-drone systems will be part of our revenues. Okay. We can safely assume that the amount of the revenue will be substantially higher than FY 2025, I guess so. Yes. Okay. Yes, please continue. Yes. To complement on what Mr. Babu said. It is not only the products that we are developing, it is also the recent success that we have last year in counter-drone systems here in India has drive the attention of some international companies that are looking us as a main partner to develop. This will accelerate because as you can imagine, developing our own products takes some time. What is going on is that now we are now about to announce very soon a very good partnership on these systems with the leaders companies. As you know, I come from Europe, and there we are experiencing a lot on drones. What we are doing is partnerships with companies that are combat-proven systems. That is why we are putting a lot of bets on these counter-drone and even drone systems. We are super confident. I am sorry, this is defense. We cannot disclose on the opportunities we are dealing with and the conversations we are having with the international OEMs and also the Ministry of Defence here in India. But we are super confident on a big boost on these revenues. Okay. My next question is on ESAI segment. We have a good jump in the quarterly revenue for this quarter in the ESAI segment. Can you just elaborate what is the portion of the shift to product division that we are trying to develop and how we are progressing there? Any new product addition in the pipeline or anything on that? For ESAI, there are multiple products in pipeline, starting from millimeter wave radar, drone controller, as well as other radar systems such as through-wall radar and ground penetration radar. Does this contain an order book of INR 600 crore? Hello. Sorry to interrupt, Mr. Pankaj. Due to Yes. Time constraints, we will have to take this as the last question. Thank you. Thank you. Ladies and gentlemen, in the interest of time, this will be the last question, and we will now hand the conference over to the management for closing comments. Thank you, everyone. Thanks to all our esteemed leaders and participants for your time and interest in our company. We appreciate this engaging session and the insightful questions. Should you have any further questions or need any additional clarification, please feel free to connect with us. Thank you. Thank you. Thank you, everyone. Thank you. On behalf of AXISCADES Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.