Please note that this conference is being recorded. Please note this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Now, I would like to hand over the conference to Mr. S.G. Reddy, MD from Astra Microwave Products Limited. Thank you, and over to you, sir.
Thank you, and good morning, everyone. A warm welcome to all the participants to the first results earnings call of our company. I am with my colleague, Mr. M.V. Reddy, Joint Managing Director and SGA, our Investor Relations Advisors. The results and investor presentation for Q3 FY 2025 are uploaded on our company website and stock exchanges. I hope you had a chance to look at it. To start with the Q3 results, I am delighted to share with you that Astra has delivered a healthy performance with a 12% year-on-year growth in the top line, which stood at INR 257 crores on a standalone basis. This performance is in line with our expectations. On the profitability front, we continue to maintain our EBITDA margins at a sustainable level of 29.1%, indicating stability in our margin profile of current order book and a better mix of products sold during the quarter.
We saw healthy order execution during the quarter, wherein domestic defense orders contributed to 85% of our revenue, followed by export business at 8.4%, space 3.4%, meteorology 2.7%, and balance coming from other businesses. Our consolidated order book as of December 24 stood at INR 2,332.6 crores. The standalone order book as of December stood at INR 1,960.2 crores, with new orders of INR 141 crores received during the quarter. For nine months, we booked about INR 674 crores of new orders, gradually moving towards our annual order booking target. These new orders comprise of INR 20 crores from radar, INR 60 crores from EW segment, INR 5 crores from telemetry, INR 22 crores from space, INR 14 crores from exports, and the rest from meteorology and hydrology sectors. In terms of product specific, major orders being for the plank unit and the Shakti subsystems.
Overall, our standalone order book comprises of 88% of domestic orders, which are largely BTS, and 12% of export orders, which are a mix of BTP and BTS business. Our consolidated order book consists of INR 135 crores worth of service orders, which are typically margin-accretive. In terms of major developments during the quarter, I'm happy to share with you that the company has participated in the technical trials of anti-drone radar for the Indian Army and passed the technical trial successfully, waiting for final results of financials being submitted by the company. This drone will be further enhanced with the RF detector and jammer, with scalable options in terms of both frequency and range. The company was also able to come out with handheld ground penetration radar during the year and has participated in a competitive tender and is in the evaluation stage.
This radar will be made scalable and also made drone-based down the line. Some more developments will be shared by my colleague. Our joint venture company has done well during the year and has already surpassed the year-end target. Handsome share of profit of INR 7.5 crores is received from it during the quarter. Our subsidiaries have done well, though largely it is for the capital consumption. In general, defense industry is advancing steadily towards self-reliance, driven by government policies, DRDO innovations, and global collaborations. The country is witnessing rapid import substitution, increased domestic production, and growing exports. This push towards indigenization is expected to boost the earnings of both public and private defense companies, as many defense PSUs are witnessing good order inflows with higher indigenized percentages. Also, the Union Budget FY 2025 has allocated handsome money for the defense budget.
Against this backdrop, Astra is strategically positioned to leverage emerging opportunities in this expanding market. Before I hand it over to my colleague, I would like to inform you that we are on the way to achieve our year target, both in terms of top line and bottom line, and aiming for about 15%-20% top line growth for the coming year, which may translate to about INR 1,200- INR 1,300 crores of sales. With this, I request Mr. M.V. Reddy to take it over.
Thank you, Astra. Good morning, ladies and gentlemen. We had quite successful third quarter, and we are almost on track towards reaching the FY 2025 targets of both in terms of orders and sales. We have an order book of INR 960 crores as of Q3, including inflow of INR 140 crores, which are booked in Q3.
We have concluded negotiations of INR 1.5 billion more worth of orders, which we have been expecting in this current month, and also, in addition to that, INR 2 00 crores more worth of orders are in pipeline, and the majority of them are expected to receive in the current quarter itself. In the last quarter, the majority of orders which we have booked are production in nature from domestic market in radar and EW domain, carrying decent margins, and 30% of them are in development contracts. We have backed a few important strategic projects, including the development of critical technology projects for futuristic radar and also onboard digital signal processing system for the satellite payloads, which will help us to move up in the value chain and also will enable us to build the satellite payloads in the near future.
With regard to sales, execution momentum has picked up as compared to the previous quarter and further ramping up in Q4. We are confident of meeting the projected numbers and will achieve four-digit mark revenue for the first time in the current financial year itself. I'm happy to share a few other key achievements of the last quarter, which include the successful completion of site-acceptance tests of multi-function pulse compression radar for ISRO and pulse-based tracking radar for DRDO, Doppler weather radar for IMD. All of them have been accepted by the customers and handed over to them. Our JVC, as Mr. G.S has mentioned, is outperforming in FY 2025 and bagged a decent and strategically important contract worth INR 255 crores in the last quarter to deliver software-defined radios for the Indian Air Force.
With the order book of INR 475 crores, ARC is expected to surpass initial guidance numbers of the revenue of the current year and is expected to book sales of INR 275 crores in this year. ARC is actively pursuing more opportunities in the domain of tactical communication and electro-optics and is expected to grow at a rapid pace, with initiatives being taken to strengthen it in all aspects. Before I conclude, I have to inform you that we are unveiling new products and systems at the AeroShow, which is going to be held next week in Bengaluru. We are demonstrating the drone-penetrating radar and also the complete weather solution in this particular AeroShow. That's all from my side. My other colleague, Mr. Atim Kabra, actually is from an emergency situation. He could not attend this call. He just wanted to inform, and we would be happy to answer your questions.
Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. We'll take a first question from the line of Amit Dixit from ICICI Securities. Please go ahead.
Yeah, hi. Good morning, everyone, and thanks for taking my questions. First of all, congratulations for a good performance in this quarter. I had a couple of questions. The first one is essentially on EBITDA margins. So if you look at it this quarter, the EBITDA margin is touching almost 30%. As you indicated in your prepared remarks, the orders inflow that we are seeing in the current order book is primarily oriented towards defense, and there are service orders as well. So is it fair to assume that now going forward, somewhere upwards of 25% EBITDA margin would be a norm for Astra?
Yeah, yes. We can assume.
Okay, sir. That's very helpful. The second question is on interest cost. I see that has increased sharply both on QoQ as well as YoY basis. So was there a working capital build-up that we expect to be unlocked during Q4? And what was the nature? Why was this interest cost very high?
Yeah, I think it needs to be clarified to the investors in general also. This question keeps coming up very regularly. No doubt, the working capital borrowings have slightly gone up. But I would say to a large extent, the increase in interest cost is pertaining to one adjustment pertaining to the Indian accounting standards on the advances received from the customers. It is not an actual outgo, but the accounting standard needs us to provide interest on the outstanding advance amounts. Irrespective of the terms of the contract we have to provide, the share of such provision is close to about 40% of whatever the amount we are showing in the financial statements. So we have to discount that 40% to arrive at the actual finance cost incurred by the company.
Okay, sir. And this change.
The provision is getting adjusted as and when we gradually execute the contracts. Indirectly, that is how it happens.
Okay. And this change in accounting policy has happened from this quarter only?
No, it is there for the last two years.
Okay. Because the cost has gone up. I mean, if it was there in the last two years, then even if I compare it with last year, it has gone up by 80%.
I understand that during the quarter, or I would say in the last six months' period, the actual working capital borrowings have gone up compared to the corresponding period of previous years. So because of that, even there is an increase in the actual finance cost also. But my answer is more in terms of the overall finance cost that is appearing in the books of accounts.
Sure, sir. One last question if I may. You also spoke on the anti-drone radar in your prepared remarks. Can you just highlight the kind of what potential do we see in this? How is it different from our peers who are in this space?
Probably M.V. Reddy will take that.
Yeah. So this is, as we mentioned in our previous calls also, this ToT, we got it from DRDO, but we optimized the design. And today, we are competing with a couple of companies in this particular domain. So initially, we developed the total radar solution, and then we demonstrated it. And as Mr. G.S has mentioned in the opening remarks, we are now integrating with the radar jammer and other sensors to provide the overall soft kill and as well as hard kill options.
Okay, sir. Got it. That's it from my side. Thank you and all the best.
Thank you.
Thank you. Before we take the next question, we'd like to remind participants to press star and one to ask a question. Next question is from the line of Yug Modi from AP Capital. Please go ahead.
Thank you for this opportunity. So I just had one question. So for the nine months, our revenue stands at INR 640 crores. So do you see any potential challenge for achieving our full year target of INR 1,000 crores? If you could throw some light on that?
Yeah, challenges are there, but as of today, we are confident to reach the milestone.
Okay.
Yes.
Yug, does that answer your question?
Yes, sir. That's all. Thanks.
Thank you. Participants, may please press star and one to ask a question. Next question is from the line of Raj Mehta from Mehta Advisory Firm. Please go ahead. Mr. Raj Mehta.
Yeah. Can you hear me?
There's some background noise.
Okay. Just give me one second. Yes. Am I audible?
Yeah, please go ahead.
Thank you for allowing me to ask the question. And thank you. And also, congratulations on a good set of numbers for this quarter. My question is, what is the current debt-to-equity level, and what is the comfortable range that you're looking at?
Both long-term and short-term. Short-term debt as of today is about INR 400 crores. Long-term debt is about.
Sorry to interrupt. Ashish Goyal, please self-mute yourself. There's a lot of disturbance.
So both long-term and short-term is close to about INR 430 crores as of today.
Okay. What was the revenue achieved by the company as JV company Astra Rafael? And what is the potential that we see here?
Revenues achieved by the company is close to INR 200+ crores for a nine-month period. Probably it may achieve another anywhere between INR 50 crores-INR 70 crores. It will be in the balance three months of this financial year. Then order book and all, we have already shared with you. We have INR 475 crores order book as of 30th December.
Okay. That answers my question. Thank you so much.
Thank you. Next question is from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.
Good morning, sir. Decent set of numbers. First question is on the order book that nine months, 25 year at 1,960. What we've received is only INR 141 crores of order. And we closed at 1,960, which is lower than 2,097 as of September 2024. What's the visibility for the next two years in terms of order book? And the other thing is I can see that there is potential for export potential in terms of order book. There is INR 7,000 crores of total potential. This is potential till 2028. So what's the kind of how much are we going to do we expect us to be benefited from this business potential? One. Second is, what is our estimates for 26 and 27 revenue growth as well as I believe with the kind of platform that we're doing, our margins are not going to be dipping or impacted.
Either they'll remain stable or they might be a slight blip. But I think the next two years, the margin is going to be healthy only at the same level. So any guidance on that, please?
In terms of the margins, yes. As I said, probably there won't be any downward trend going forward. Either we should be able to maintain or we should be able to slightly improve from the existing margins. In terms of the order book and all, probably you have asked too many questions about the order book. I'll ask Mr. M.V. Reddy to answer.
First of all, whatever the guidance we are given for the current financial year around INR 1,100 crores-INR 1,200 crores, we are almost there, and though we booked up to INR 640 crore till December, and I think we are comfortable, as I mentioned in my opening remarks, we have a pipeline INR 350 crore more orders are likely to come in this current quarter, so this is the one, and going forward, we have been seeing good visibility.
For the FY 2026, we have a clear visibility of INR 1,300 croses- INR1,500 crores worth of orders, which we are likely to book, and which includes the domestic and as well as the export market. Then FY 2027 also, we have a clear visibility of at least 20% growth in the order book. Similarly, on the revenues front also, we have clarity for the next year, that is in FY 2026, a minimum of 15%-20% growth we can comfortably achieve. This is our order book. As far as the export potential is concerned, we have been addressing both build-to-spec as well as build-to-print, but our main focus is shifted towards build-to-spec. We have slowed down the offset opportunities as the margins are very low, so we are going towards the build-to-spec way with our IP. We are turning out products. We have been discussing global OEMs.
A couple of products have been developing based on the specifications given by them. It is too premature to inform you about the contract size and also the program center. Probably in the next few months, I think we should be in a position to come out with the figures. But yes, we have been addressing globally, and we are, I think, confident of achieving at least minimum 10%-15% of our revenue should come from the exports, especially on the build-to-spec. So this is what the figures probably we can achieve.
Okay, so one more question with the war between Israel and Gaza coming to this thing, and even Ukraine, Russia somewhat mellowing down. How do you see things going forward for you? I said that, yeah, for some companies, there's going to be a single supply, and situations look better. But how are you placed in that case?
Actually, this ongoing situation is not affected much, except there were a few supply chain issues what we faced in the previous quarter. But otherwise, the overall situation is okay with us, and then there is no impact as such in our business in terms of order book, whatever we are getting, and also in terms of sales, what we have been doing it for Israel. So I don't see any major challenge even going forward also.
Okay. That'll be all. Thank you, sir.
Thank you. Before we take the next question, we'd like to remind participants to press star and one to ask a question. Next question is from the line of Sakshi from Pratap Securities. Please go ahead.
Hello. Thank you so much for the opportunity, sir. I had questions on the order book which you already answered. So thanks for that. Just to follow up on that, so for our upcoming orders, if you could provide a breakup in terms of what we are targeting, defense-based, export, etc., can we consider it to be the same as our current order book in hand, or can we expect some variation?
Yeah. The current quarter, which is the Q4, which I mentioned around INR 350 crores we are likely to book, that majority of orders we are trying to get again from the radar area about INR 66 crores. And then EW around INR 45 crores, missile and telemetry around INR 50 crores. Then there are some upgradation programs, again, in the radar domain, which is about INR 120 crores. Then in space is about INR 15 crores, and exports around INR 50 crores. So all put together is around INR 350 crores we are likely to book in this current quarter. And for the next year, whatever we mentioned around INR 1,300-INR 1,500 crores is the margin which we are likely to book in the next year. In that, majority of radar orders are likely to come from the radar segment is around INR 900 crores-INR 1,000 crores. EW is around INR 100 crores-INR 150 crores.
Missile telemetry around INR 100 crores-INR 120 crores. Space domain is INR 70 crores -INR 80 crores. Meteorology around INR 100 crores -INR 150 crores. Exports around INR 100 crores -INR 120 crores. So these are the broad breakdown of the next year FY 2026 order book.
Understood. Thank you so much. And congratulations, sir.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. Next question is from the line of Prisha Rathi from NM Securities. Please go ahead.
Hello.
Yeah.
Yes, Prisha, please go ahead.
Thank you for the opportunity, sir. I have a couple of questions. As we see a good jump in our share of profit from JV, is this contributed by our new JV with Manjeera? And can you give me some update on this new JV in terms of what kind of orders you have and how it is expected to ramp up? There is a lot of talk about high-quality export orders received by OEMs. Do we expect significant business for us as well?
Yeah. In terms of JV, what we have with Rafael? Yeah, Manjeera. The other one is what we have with Manjeera. It has just been incorporated. Okay. You know very well that we and Manjeera are working on developing a chip for NavIC applications. So the idea is that once this chip is in place, we would like to take the further development and marketing of that particular product through the joint venture company. With that idea, just the JV got incorporated. I would say there is still a long way to really talk about the business potential, what kind of numbers it can achieve. Probably as the things progress, we should be able to share with you. But as of today, this is the status of the JV.
Okay. Okay. Thank you. And all the very best.
Thank you.
Thank you. We'll take a next question from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.
Sir, one, what is our arrangement with Sematron Italia? What are we doing for them? If you could share. The other is URSC, URSC, which is we're saying these are clients. And with Thales and Raytheon, these four companies, are we still at the fledgling stage of working out some arrangement, or are we already currently we have orders for them and we are working on delivering some orders? And what kind of orders would that be?
Most of the entities what you have shared with us, we have only just a working-level MOUs with them. We don't have any significant. In fact, we have not started any business activity as such with these entities, but Sematron, I think you have mentioned the name Sematron, right?
Yeah.
Yeah. With Sematron, there are some supplies of RF modules, etc., supplied to them. It is more like a BTS contract. It is a one-off kind of business what we have executed with them.
Okay. Okay.
Yeah, and we do have some contracts for the MMIC components, and also we have some agreement with them to supply once our products get qualified, as far as the Raytheon and Thales is concerned.
Sir, not very clear. What did you say? What kind of contract?
For the MMIC supplies, we have a few agreements in place. Once our product gets qualified, then we'll go for production for their systems.
Okay. Okay, sir. Thank you, sir.
Ladies and gentlemen, to ask a question, please press star and one on your phone now. Next question is from the line of Amit Dixit from ICICI Securities. Please go ahead.
Yes, sir. Thanks for taking my question again. A couple of questions again. The first one is on essentially we indicated that we expect around INR 900 crores-INR 1,000 crores of orders from radar in FY 2026. Now, in its phone call, BEL indicated that they might get QRSM order also in FY 2026. So does this include some portion of QRSM that we are expecting, or QRSM, if any, would be apart from this order?
Yes, Amit. Actually, we have taken only first-of-production module. Actually, BEL is, in view of the discussions we had. I think they are planning to initiate proto units for the first-of-production module. So for that, the subsystems, whatever we are going to supply, that value only being considered in the order book. We have not taken up the total order size.
Sir, so the total order size, as mentioned by BEL, is INR 25,000 crores. Hypothetically, if it is INR 25,000 crores, then how much could be our opportunity?
Our opportunity will be around INR 1,700 crores-INR 1,900 crores.
Okay. Got it, sir. And for the naval platforms that are coming up, NGC and P-75, etc., what kind of roughly opportunity we can see over there?
In that, actually, we have a few modules being separated to OEMs, but the value and all probably in the next couple of months, I think, in the position to inform you.
But we'll be participating in all these three programs, P-75, P-75I, and NGC?
No. I think in only one program we participate.
Okay. Okay, sir. Got it. Thank you so much. That's it from my side, and all the best.
Thank you. Next question is from the line of Karthi from Suyash Advisors. Please go ahead.
Sir, good morning. Just wanted to confirm the margin guidance for next year. I'm slightly confused. Are you saying you'll maintain the 29%-30% range for the whole of next year on a standalone basis?
Yeah. That is what I said.
Yes. Sure. Sure. And you said roughly INR 1,200 crore-INR 1,300 crore revenue base, right, sir?
Yeah. That is the guidance. Yes.
Sure. Sure. Thank you. Thank you for clarifying that.
Thank you. Before we take the next question, we'd like to remind participants to press star and one on their phone to ask a question. Next question is from the line of Santanu Chatterjee from Mount Intra Finance. Please go ahead.
Thank you. Thank you for this opportunity. My question is on Uttam AESA Radar. Sir, from when can we expect that significant revenue contribution will happen from this segment? As we have already experienced some delay in the Tejas Mk1A program, is there any actual problem for this program that I want to clarify? Another one is, the second question is on your CapEx plan for FY 2026..
Yeah. First question, I'll answer you. As far as Uttam for LCA Mk1A is concerned, we have RFP on hand. We have participated, submitted our bid. Currently, the technical evaluation is going on. Yes, there was a delay in procurement of this Uttam. We could have got some order by March, as we indicated previously, but now it's getting shifted to mostly by first quarter of the next year. So we get definitely some quantity by June 2025. And yes, as far as the revenue from that, probably we may be in a position to roll out a couple of numbers by March 2026. And the majority of them will go for FY 2027. The next question, I think, is detailed on that. Yeah. There will be some CapEx. As of today, they're not really estimated. It is mostly for augmenting the existing activities of the company.
Probably when we talk to you at the year-end call, we should be able to give a number too.
Any ballpark figure, sir?
Generally, no. The minimum will be about INR 30 crores-INR 35 crores.
That is for maintenance CapEx, right?
Yeah. It is maintenance CapEx.
Okay. Okay, sir. Thanks a lot.
Thank you.
Thank you. Ladies and gentlemen, due to time constraints, we'll take that as the last question for today. I now hand the conference over to management for their closing comments. Over to you, sir.
Thank you. And thank you, everyone, for attending this call and sharing your ideas, questions. I hope you're happy with the answers given by the management. And we'll be happy to connect with you again for the year-end results. Thank you. Thank you all.
Thank you. On behalf of Astra Microwave Products Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.