Good day, and welcome to the Astra Microwave Products Limited Q3 FY23 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in 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 touchtone phone. Please note this conference is being recorded. I now hand the conference over to Mr. S. Gurunatha Reddy, Managing Director. Thank you, and over to you, sir.
Thank you, Vikram. Good afternoon to everyone. A warm welcome to all the participants to the fourth earnings call of our company. I am with my colleague, Mr. M. V. Reddy, Joint Managing Director, and Mr. Atim Kabra, Director Strategy and Business Development, and AGA, our investor relations advisors. The results and investors presentation for the quarter ended, third quarter ended are uploaded on our website, stock exchanges. I hope you have an opportunity to look at it. I'm happy to inform you that we have reported another quarter of stellar performance and recorded our highest ever quarterly profitability. We achieved a record EBITDA and PAT of course INR 53 crores and INR 30 crores respectively for the quarter ended December. For nine months period, we have delivered INR 86 crores of PBT, which is our guidance for the entire year.
This quarter is a good quarter, not only in terms of sales and profitability, but also in terms of products delivered by the company. We have delivered following systems to our customers during the quarter. Radiation Mode Test and Evaluation Facility, 7.3 meter antenna system for ITR, ST radar for University of Calcutta, and BATM-2 for ITR. We expect to deliver about INR 270 crores of sales during quarter four and reach an overall top line of about INR 825 crores. Bottom line at the PBT level will be at about INR 110 crores. We expect to end the year with an open order book of about INR 1,750 crores.
For the next financial year, we are confident to book about INR 900+ crore orders and deliver top line of about INR 950 crores and a bottom line at the PBT level of about INR 135 crores. Long term view for the next five years ending at 2028, we are confident to deliver a cumulative top line of about INR 8,000 crores and carry our order book of INR 6,000 crores at the end of 2028. During these years, we are confident to deliver bottom line at PBT level of 15%-18% of revenues. Before I open this discussion for question and answers, I introduce my new colleague, Mr. Atim Kabra, who joined our board as a taking up of the business and the strategy development from first January 2024. Atim, I warmly welcome you.
Thank you, SG.
Yeah.
Thanks. Thanks, S. G. Hello, everybody. As a fellow shareholder, in my mind, I represent all shareholders, and I'm very excited by what I see in potential business at Astra. My desire is that we relate Astra with radars, that we know that our company is a key enabler in electronic warfare and a key enabler of missile subsystems. We know Astra as being a key player in the satellite space, and lastly, its products in meteorology and weather segments are important for the nation. We are looking at a significant growth phase for the company, which has delivered a very healthy return to its shareholders. We are looking at a 5-year cumulative sales execution forecast of close to about $1 billion in gross sales. To put it in perspective, that's nearly 10 x our current sales trajectory cumulatively.
We hope to grow our order book alongside to a very, very healthy number at the closing of year five. Even better is that we expect this year-ended sales growth to be with improving margins and rising return ratios. Kudos to our R&D team, which is developing multiple exciting products under the leadership of our founder director, Mr. Chitrakar. As Astra continues to go up the value chain, we are right up there in systems and solutions already. We are proud to be a part of Atmanirbhar Bharat while we continue to work with our valued partners from overseas. Progress in our ARC JV with Rafael Israel is a proof of this besides our esteemed export partners. That's our vision. That's our very simple story, and we'll explain as we go along in the question and answer sessions. SG, anything?
Yeah. Now this.
Hope I did not-
The forum is open for question and answers.
Thank you very much, sir. Ladies and gentlemen, 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 phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please press star followed by one on your touch-tone phone now. We have our first question from the line of Hitanshu Bhatia from Gandhi Securities. Please go ahead.
Am I audible?
Yes, you are. Please go ahead.
Yeah. Congratulations on a good, great set of numbers, sir. I have two questions. One is on the 31st page of the investor presentation, you've mentioned about NavIC and GPS receiver. Could you throw some more light on the prospects of it? The second would be that we had bid for the tender alongside some private players like Alpha Design, Elena Geo Systems, and also Manjeera Digital Systems. What was the outcome of that tender with regards to the NavIC and GPS I'm talking about? Has it been awarded to us? I mean, also, I believe we have a customer relationship with the company, Manjeera Digital Systems. Could you also elaborate on our relationship with Manjeera as well? Thank you. That's it from my side.
Yeah,
Yeah.
This is regarding the NavIC systems. As we have mentioned in last investor call, we have invested in a startup company called Manjeera Systems with their professional in this VLSI design and all. They are developing baseline chip and for the NavIC products. With the using that chip, we are developing subsystems like receivers for various applications and also tracking units, like vehicle tracking units and all which are in development phase. Currently the baseline chips are in the final stages, and we expect these particular chips to get qualified from ISRO in next one-month timeframe. Probably by in six months to eight months timeframe, we should be the, you know, demonstrate these subsystems for NavIC applications.
This is what we have a roadmap as far as the NavIC is concerned.
The potential in the NavIC and GPS receivers, if you could throw some more light on it?
The huge potential is there. In fact, with the kind of applications which we are targeting, next to five years, we should have at least about INR 2,000 crore worth of business, minimum business what I'm talking about, from the different sectors.
Okay, sir. Sir, the thing would be that if.
I have-
Yeah, sir. Please go ahead.
I will add to this, that there, to the best of our knowledge, there are only two companies in India which are developing this chip. Around this chip, once it is approved, there will be not only us, but other guys also who will be developing the subsystems which are the receiver modules which Indie is talking about. We will initially compete probably with imported chips, and we are very well-placed in terms of our costing and margins over there. This could be a very huge business as the story translates into real-life applications.
Okay. The only doubt that I have is that if you have a customer relationship with Manjeera and you'll be competing with them on the same tender, how would that go out?
Uh, actually-
Indie, can you please explain this?
Sure. Basically, initially we competed, but now, we are working together.
Okay. now there would be no conflict of interest with, Manjeera and others?
Yeah.
With regards to the tender.
Actually, if you look at that, we have a relationship with only for one particular product. Other products, even within NavIC, future we may compete.
Okay.
Okay.
Regards to the tender that we had bid, have we won the NavIC tender with the Ministry of Electronics Affairs, or what's the outcome of that tender, sir? Has the result come out yet?
No. We are... On price front, actually we are not there. As I mentioned, like, you know, Manjeera won the first order where, you know, we are invested in particular product to get it developed. Otherwise the second tender where we have participated on the price front, we lost it.
Okay, sir. Okay.
Yeah.
Thanks.
Thank you. To ask a question, ladies and gentlemen, please press star followed by one on your touchtone phone now. Your next question from the line of Riya Verma from NR Securities. Please go ahead.
Hi, sir. Thank you for the opportunity. I just have two questions. Firstly, on the growth margin side, as well as an increase in our quarterly margins, for two consecutive quarters now, I just wanted to understand on the sustainability of these margins. If you could please elaborate a bit on the reason for this margin improvement and how sustainable these factors are in the future?
The margins delivered by the company at the end of Q3 are sustainable for the future. In fact, you can see the increment from now on. Your other question is how the change in margins has occurred. I didn't get your first question.
I was just saying, this margin improvement, what are the factors behind this, and is it sustainable?
Yeah, it is sustainable. That I already answered. In fact, it can improve.
The improvement is coming in because of the change in the sales mix of the company. As explained in the past many times, the domestic sales carry higher margin compared to the export sales. Up to now, the export sales are almost equivalent or more than the domestic sales. Going forward, the mix is skewed towards domestic, therefore, the increase in margins is happening. Improvement in the margins is happening.
Okay. One more question.
Yeah.
What would be the long-term sustainable PAT margin levels according to you?
The PBT levels, I already said, are probably 15%-18% is the one which is sustainable.
Okay.
Yeah.
Thank you so much. That answers my question.
Thank you. A reminder to participants, if you wish to ask a question, please press star followed by two on your touchtone phone. The next question from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Congratulations, sir, on good set of numbers. Sir, I did hear you saying that revenue of INR 950 crores is expected, you were expecting around for FY24. You mentioned INR 135 crore. I'm a little said, what number did you mention it? INR 135 crores?
Yeah, you heard it correctly. Yeah.
Okay. INR 135 crore what? I mean, it is PBT levels?
PBT levels.
Yeah. Okay. Also coming to your order book that you're expecting around INR 900 crores, can you know, explain to us what is the area you're targeting? I mean, you are expecting to get majority of the orders from. Like, say if you could just say if it's from the NavIC or the which area of the defense. Just a ballpark number would do.
Yeah. M. Reddy will take that call.
For next year, close to INR 1,000 crores we are targeting to book. Out of INR 1,000 crores, INR 930 crores are from the domestic sector. In that, defense and aerospace together close to INR 750 crores. From space sector, about INR 100 crores. Meteorology and hydrology were together about INR 80 crores. The exports, we have planned to book INR 150 crores.
Okay. In exports also we have almost like a similar margin profile to domestic?
No. In exports of out of INR 150, INR 50 crores is from, you know, BTS, again is BTS, contracts, and INR 100 crores BTP, which is a low margin.
Right. Right. Yeah. Got it. Got it. Thank you, sir. Thank you for the clarification. All the best.
Thank you.
Thank you. The next question from the line of Ketan Gandhi from Gandhi Securities. Please go ahead.
Hi. Sir, as a follow-up on NavIC, the tender which we lost, is it in L5 band or L5 and S dual band module?
It's a dual band.
Okay. Now we are working on L5 or S band?
Yeah, L5.
L5. Okay. government made is any mandatory equipment of the NavIC chip into mobile telephone and all the other equipment?
Yeah, we expect this policies to be out. I think, you know, government, in fact, what we heard is government working towards that. Only thing is that waiting for the more manufacturer in this particular domain, like, you know, only limited players have come with the indigenous development. Once with the more number of players will be there, then I think probably policies can be made. That is what we heard about from different agencies.
Okay. Can sir, in ISRO document, it's written that L5 band is expected co-cost per unit is around INR 5,000. L5 and S dual band is around INR 10,000 per unit. Is that understanding correct?
Yeah, yeah, you are right.
Okay. I have some more questions. I'll join back in the queue.
Yeah.
Thank you. A reminder to participants, if you wish to ask a question at this time, please press star followed by 1 on your touchtone phone now. Your next question from the line of Pulkit Jhunjhunwala, an investor. Please go ahead.
Hi. Good afternoon. Just wanted to get some clarification on the fundraising that we had proposed to raise INR 400 crores. Any idea on that? Could you give us some clarity?
Yeah, we are on the job. Right now the members voting is going on. Yeah, we are on it. Probably you'll come to know more developments maybe in the next fortnight.
Is it like a issue of shares or like which model are we going for in order to raise that INR 400 crores? There will be dilution.
Yeah, it will be dilution.
Okay. Okay. I'll join in the queue.
I just clarify the resolution is for up to INR 400 crores.
Okay. Just while we're on it, I would just like to get the management perspective on, why do we need this capital at this point of time? Is it for working capital for future orders?
No, it is a mix of both. Primarily, as you know, the Defence Acquisition Procedure, there is a drastic changes have come in, where the government is encouraging the private sector to take the risk, invest in new product development, get the product developed so that the companies can compete as and when this business is available. Also because of this import embargo, good amount of opportunities available for the private sectors to identify their key areas where they have the expertise. We should be able to take that financial risk in developing those products and be ready for demonstration as and when those opportunities arises. Majority of this QIP or the fundraise is to make the company financially strong so that it can invest in these technologies and develop the products.
A small portion of that, of course, is there for working capital. I would say that majority of that is for the this kind of new product developments.
Okay. Thank you.
Thank you. We have next question from the line of Subrata Sarkar from Mount Intra Finance. Please go ahead.
Hello?
Yeah, please go ahead.
Hello?
Yeah.
Yeah. Sir, couple of questions. First, sir, can you clarify once more the target which you have given for 2000, like next, after next five years, what kind of revenue and order book, we were expecting that you told? Like, can you reiterate once more, sir, for better understanding?
For the next five years, starting from the financial year, we should be able to do a cumulative sales of about INR 8,000 crore. At the end of the year, 2028, we should have an order book of about INR 6,000 crore.
Okay. That's perfect. Sir, from our presentation in 27, or slide number 27, you have mentioned like we have expertise in, you have given the expertise of various players across segments, and there we have mentioned like we have system expertise. Can you just elaborate a little bit like which systems we are talking about and what is the potential of that system, sir?
In fact, first of all, no, your voice is not very clear. It is breaking away.
Hello? Yeah. Sir,
Correctly, you would like to know what kind of expertise we have in the systems. Am I right?
Yes, sir. Yes, sir. You have mentioned like we have system expertise, I just want a little bit more elaboration on that.
Systems, you know, we already started delivering radar systems and we build a systems group within Astra and addressing radar and electronic warfare. In electronic warfare segment, we just initiated the designing the systems for airborne applications and as well as for the ground application. Whereas in radar, we already delivering this telemetry tracking radars and also surveillance, with small range surveillance radar. And we are developing a counter-drone radar, and also we are planning to develop a bird detection radar, kind of radars we have in pipeline. Likewise, we have developed the system expertise within the company. And apart from that, in future, going forward in space domain also, we are trying to build payloads, satellite payloads.
Last question, you have mentioned about like, major purpose of this fundraising is major part will go for new product development. If you can elaborate again, a little bit more like which area like or which specific product we want to be prepared with so that there is a new opportunity comes from the government side, defense side, we can explore that? If you throw some light on the what are the areas and new products we are trying to develop with this new funds, sir?
The many projects which we could see having good potential in going, you know, in future, and which have been already come under import, you know, embargo. There we have picked up few projects and also based on the responses what we have sent and what we are having that confidence to develop, so we could take the few projects development, which are basically in domain of radar and electronic warfare in defense. As well as the satellite is concerned, we are also getting into the defense, you know, payloads. These are the few important projects which we picked up. Yes, we'll not be able to tell the names of the products.
You know the negative list which has come outside? There are more than 400 items.
Yeah.
from the negative list.
Yeah, that's...
From there-
major list.
We are right now competing... Hello, can you hear me?
Yes, sir.
Hello.
Hello, hello. Sir, I'm there.
400 items. Yeah. After more than 400 items in the negative list, we are right now operating in probably 40, 45 items only, which are in our domain out of those 400+. Of which we are operating currently in around 15, which leaves us with a huge amount of products and which we can fill in the negative list alone, while we are developing a whole range of other products in the segments which Henry already just mentioned.
Okay. Okay. Thank you, sir. That's all from my end.
Thank you.
Thank you. Participants who wishes to ask a question may press star one. We have next question from the line of Viral Shah from Shah Investments. Please go ahead.
Hi sir. Just wanted to know, are we expecting any orders from Hindustan Aeronautics with respect to the new helicopter plant?
From HAL, we are expecting orders for the LCA, Uttam radar, and also going forward, other, airborne radars what we are going to develop, for the airborne platforms.
Okay. Okay. Thank you.
Thank you. We have next question from the line of Amit Dixit from ICICI Securities. Please go ahead.
Hi. Good afternoon, everyone, and thanks for the opportunity. First of all, congratulations for a good set of numbers. I have a couple of questions. The first one is essentially if you look at the Q4 results of, you know, other companies like HAL, BEL, they are even BDL, they were a tag, you know, low on execution. Do we going forward, do we see a risk of some of the orders that we were expecting, getting delayed in FY 24?
As of now, whatever the numbers which we have mentioned, I think we have a good probability in booking these orders. This is as on date, whatever visibility we have, with that only we are presenting this. I think we should be, you know, in position to book this INR 1,000 crores order in next year.
But Amit, we are not a quarterly driven company. Amit, we are not a quarterly driven company, right? I think you have to look at this on a rolling quarter basis. There may be delays, some critical components may be delayed coming, et cetera. You know, I think this company is not a company where you can, you know, put in place a quarterly number and expect that we will hit that number every possible time, right? I think Aniruddha and Sridhar have done a tremendous job in terms of exceeding the targets which have been set out, you know.
Be cognizant that there could be delays in the system itself, which can sometimes push the numbers out, and sometimes maybe we can get lucky also, and we can be getting some excellent orders which we may not have anticipated. You are aware that recently, you know, the four Doppler radars were dedicated to the nation. The minister came out and said that he is expecting Doppler radars to be installed all over the country. Now, that's a massive business which we had not anticipated, but we will be gearing up for that. We have delivered 10 Doppler radars to the country at this point in time, and that's a significant piece of business which is evolving, which was not anticipated also.
Great. Thanks for the clarification. The second question is essentially if it is possible to provide the breakup between BTS and BTP orders, I mean, as far as the execution is concerned in this quarter. Going forward, what would be the mix that you would be targeting between BTS and BTP?
Yeah. For the current quarter, we don't have any BTS export, sorry, BTP exports order. Going forward next year, as I mentioned, out of INR 150 crore, which we are expecting from the export segment, INR 50 crore from the BTS and INR 100 crore from the BTP. Rest all in domestic, as you know, all are, you know, BTS orders. We don't have any BTP in the domestic business.
Okay, great. Thanks a lot, and all the best.
Thank you.
Thank you. We take the next question from the line of Bhavik Shah from MK Ventures. Please go ahead.
Hello, sir. Congratulations on a good set of numbers. Just wanted to understand the developments on the anti-drone front. You're going to demonstrate it by January or February, if I'm not wrong, you mentioned in the last call. Sir, any update on that front?
Yes. We are going to demonstrate very soon. I think it's in the final testing stage. Definitely you will hear good news in next few weeks' time.
Okay. Now, could we sense what opportunity could this be for the company, or we still need to wait for that?
Opportunity is there. Like, we have participated a few tenders recently, from Air Force and Army. I think, we are gearing up for a demonstration of this particular product. Once we are through, then I think, we'll be in a position to inform you exactly how much business we can get in this. Otherwise, opportunity-wise, yes, we have a good amount of opportunity for this particular radar.
Right, sir. Any developments on the space front? Like, last couple of years were not that good for the space end. Like, how do you see space going ahead?
As you know that, you know, barring communication satellite sector, which in fact been open for industries to take up, Rest ISRO is continually working on the strategic segment, we, from which we can expect the subsystems order from ISRO. ISRO, I think, you know, definitely is some kind of a business we can get for the couple of years. Apart from that, as I mentioned, just now, when we are also trying to build satellite payloads to, for the strategic applications, that is something which we are launching soon.
Right. Right. Okay. Any update on the CapEx front? Like what is our CapEx till in nine months, and what could be your CapEx going ahead?
Yeah. For this financial year, the overall CapEx will be around about INR 25 crores. Up to nine months, I think we have spent close to about INR 15 crores.
Okay, sir. Is there any guidance on the CapEx front?
For next year?
For upgrading the existing requirements, probably we may be spending about INR 10-15 crores.
Mm-hmm.
We have a larger plan in terms of creating facilities for the overall systems, whatever we are planning for. Those details probably we can share with you in the next call.
Okay.
We proceed so.
Okay. Thank you so much, and all the best.
Thank you.
Thank you.
Thank you. Participants who wishes to ask a question may press star one on their touchtone phone now. We have next question from the line of Shuja Siddiqui, an investor. Please go ahead.
Thank you for taking my question. Sir, there is a great opportunity in the defense sector with whatever measures the government is taking. The question that I have is: What are the constraints which are stopping you today from executing...
We're sorry to interrupt, Mr. Siddiqui. Your volume is very loud. Could you please speak a little close to your mic? Hold the mic. Speak a little slow. Thank you.
Yeah. My question is that there's a maximum opportunity in defence today. The question to the company is: What are the constraints that's stopping the company from either executing more from the order book that is already there and getting more orders going forward? How do you create a machine which is continuously on the, you know, treadmill of getting more orders and executing more orders?
See, we are doing that. If you look at the profile of the products delivered by the company, it is largely components and subsystems what we are doing. This product base has its own limitations in terms of execution. Going forward, that is what we are sharing with you. The overall environment is also changing, wherein the private sector has to be more aggressive in terms of bidding for the projects which we are planning to do. You see more accelerated action coming in from the company in the near future.
Are you in a position to share something at the moment about your future strategy?
Future strategy we have already shared. We are planning to raise some capital resources so that we'll be investing in new product developments, so that we can compete with other people when the market is actually opening. Yeah, that is what we are. We are graduating from a subsystem company to a systems company in a bigger way. Accordingly, we are planning our actions so that we'll be there to take that market as and when it is open.
Do you need some strategic tie-ups or anything like for you to get more, you know, develop more products and get more strategic high-value products in? Or you will develop all of this on your own?
A few products we are working with some foreign OEMs. One is that with joint ventures. We have one joint venture with Rafael, where we have added a few other product lines apart from the SDR, what we are manufacturing in JV. Like, we have added electro-optics and all. Similarly, we have some other products which we are discussing with some few OEMs. You would see few announcements in coming Aero India. I don't want to reveal at this stage.
All right. Thank you. Thank you.
Thank you. We take next question from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Thank you for the opportunity again, sir. I just wanted to know what is on the semiconductor side, how is the availability as compared to the earlier quarters? If you could tell me what is the receivable days and working capital cycle as on, quarter three end?
As far as availability of semiconductors is slightly improved as compared to the last quarter. I think the lead times are coming like, you know, in a normal mode. Still, yes, it's not so comfortable as we enjoyed pre-COVID situation. I think maybe next one or two quarters, we expect that should come in a normal mode. As far as working capital, I think AJ will answer.
We have receivables of about INR 300 crore. Domestic is about INR 289 crore, and exports is about INR 28 crore. In terms of the working capital days, it is typical to semiconductor industry where, I mean, RF and micro industry, where the stocking of inventory is one of the critical items for execution of the projects on time. Also these semiconductor devices, which is a very critical input, is available only from specified markets who are actually the global leaders. Therefore, we are forced to place orders on hand in advance and assort the material for the entire project duration cycle. Because of these factors, our working capital days are fairly high compared to the normal industry.
Currently it is around, 300 + number of days is the working capital days.
If I'm not wrong, our peak quarters as it comes to is around quarter three and quarter four. With how things are planning out, are we still looking to front-load the inventory going ahead or we might see some inventory days coming down?
No, I don't see. In terms of inventory management, I don't see any major changes happening. As it is now, we are struggling for availability of the semiconductor devices. Therefore, as and when they are available, we have to buy and stock it. Therefore, at least in the near future, I don't see any major changes coming in.
Okay. Sir, at the start of the call you said that our current quarter margins of, like, 23% is you're comfortable and you feel like this could be sustainable. When you say that, I mean, the EBITDA margins for the entire FY 2023, you see more or less at same levels, right?
I am only talking at PBT level. The current year we are likely to end about 13%-13.5% of PBT. On a top line of about INR 825 crores, we are projecting we have a PBT of about INR 110 crores. I say that these margins are sustainable, and there is a fairly good chance of improvement over this.
Okay, thanks. That's all from my side. Thank you.
Okay, thank you.
Thank you. Anyone who wishes to ask a question may press star one on their touchtone phone now. The next question from line of Abhishek Dave from Bright Securities. Please go ahead.
Hello, am I audible?
Yes, you are, sir. Please go ahead.
I have one question. Sir, based on your current order book, can you give some guidance for the next year?
It is already done. At the top line, we'll do around about, INR 950 crores. Bottom line will be close to about INR 135 crores at a PBT level.
Okay. Thank you.
Thank you. We take next question from line of Ashit Kothari, an investor. Please go ahead.
Good evening, sir. Thanks. My question is, sir, with drone technologies getting commercialized, is our company planning to get into providing sensors or any products or subsystems to this particular category?
You mean to say sensors for drone?
I mean, say, sensors also would be required there also, right?
We are not addressing, drone market. We are only addressing drone detection, like, you know.
Yeah
C ounter-drone system, but not in the drones. We are not operating in the drones.
I got your point. When you are... My question was basically since you are already anti-drone devices kind of thing.
Yeah
Alternately, when the drone technology being exploited commercially for commercial applications, not the defense part of it. Over there could be need for so many other things apart from means one of the major things would be sensors.
Mm-hmm.
So, uh, the, uh, it-
We are not entering to that market as of now.
Okay.
We are addressing it. Yeah.
so lucrative enough for us to look into it?
No.
Okay. Thank you, sir.
Thank you. To ask question, participants may press star one. We take next question from line of Seema Deep from Legend Capital Services. Please go ahead.
Yeah. Hi, good afternoon. Congratulations on a great set of numbers. This is a bit of more strategic. Could you just highlight some risks, going forward in the business? Like chip shortages which were happening, through Taiwan and some other ones, if you can highlight some?
See, the major risks are like, you know, timing of the orders. Based on the visibility, what we have and the information what we gather from our customers, we've been projecting, yes, there could be delays here and there, based on the priorities and based on the delays on overall projects, you know, from OEM or and also from the user end. Those kinds of delays are always there in the defense market. As you know, it is not something new. Apart from that, on the execution front, yeah, still though the situation of, you know, the components, especially in semiconductor and power supplies, you know, we've been facing a severe shortage.
I think probably, you know, is, like, slightly improved as compared to the last two quarters, but still more improvement is required in that particular domain. Because of that, probably, you know, in the execution front, like this current year also, we will be short of INR 20 crores as compared to the original projections. You know, we have factored all these points, but we'll hope, you know, for the better, you know, situation in the components industry, going forward in the next year.
All right. Thank you. Thank you for the candor and the honesty. One last question. Could you help me with some sort of more, from the same clients, can you get some more work or, are you diversifying into more geographies as well?
We are already there in the international market, apart from serving the domestic industry. See, one is that, like, you know, in fact, Mr. Atim Kabra is looking after this particular area. Like, you know, we are trying to develop solutions from the, for the, you know, the countries, by with using our particular systems what we have today. We are trying to sell the complete solution. It's too early to disclose about these solutions. I think probably in, maybe after the, I think next investor call, probably we can share in a detailed, distinct roadmap for this. Otherwise, yes, we are trying to explore the exports like, you know, international business with a different concept.
Hello.
From the existing product line-
I would add.
One second.
Yeah.
For the existing product line, as I mentioned, my customers who are giving us BTP business already started giving us BTS orders. We got a couple of, you know, good inquiries which are trying to be materialized in the first quarter of the next year. We are discussing with many companies for this BTS business as they are planning to develop systems for the Indian market. Yes, Atim, go ahead.
Yeah. Yeah. I was just adding that, there, you know, once you get into systems, there is an international market which is there for us to compete in. We need. It works not on a tender basis, but on a slightly different sales process. It will take time. We have, you know, you should be aware that we have products which are identified and strategies are being put in place as we speak to explore those markets. These are fairly big sizable numbers, but we would be. It might take time, so we'd rather come across to you and share the good news to you when we have clear orders in sight on these markets, you know, from these markets.
This is a sizable opportunity where we can make a big difference to our clients and to our bottom line also. Yeah. Thanks a lot for your time. Yeah.
Thank you. We take next question from the line of Pulkit Junjunwala, an investor. Please go ahead.
Yeah. I was just wondering, you know, as an investor, when we see our peers who are into lipstick stage, we find ourselves in a situation where our top line is maybe twice theirs and maybe, you know, they trade at a sales to market cap of maybe 20x, and whereas we are less than 1. We feel that, you know, we although the management has done some great work, the operating margins are increasing. When we do a brief comparison, the operating margins that they are trading at, I mean, they're having a north of 40% kind of operating profit margin. I mean, I'm sure we've heard so many things about what is in the pipeline from this call.
I was just wondering, you know, is there anything that you can share now where we can understand that our top line is bigger, you know, our the technical skills is better, from what I'm understanding? Where are we lacking? Like, do you think something is? I mean, the opportunities are there for the taking. Could you just elaborate on that, please?
Guys, opportunity set is there. We are now more proactive in communicating our story. You have seen how we have been, you know, how forthcoming we have been in the last few investor calls. As the story gets out, I am sure there will be a set of investors, incremental set of investors who would be interested in our story. Why somebody. You know, this is a big market. We don't want to comment on why somebody is being valued slightly higher. Right? Okay. Maybe they've communicated their story better. Maybe they are better in the perception of the folks. We are fairly confident about our story. We are confident, as we have very clearly mentioned to you and committed, that this is a rising sustainable margin story. You know, we are RF guys. Our BOM is already there.
As we increase in size, maybe there will be efficiencies which will be coming in. You know, suffice to say that we can only communicate to you that this is a increasing sales, significantly increasing sales story with sustainable increasing margin story. The return ratios will obviously look better. Where you value somebody in the food chain is not for us to comment, you know. It's a big market for everybody to operate, and I'm sure everybody is equally competent.
Sure. Thank you.
Thank you. We take next question from the line of Ashit Kothari, an investor. Please go ahead.
Yes, sir. come, sir, just continuing with the earlier questions where the explanation was given with regards to the export market, that the process is bit different. It is not a tender system. If you could throw some more light, is it more on joint venture? Is it more on IAPS? How exactly we are exploring the market, export market?
I'll address it. guys, export markets don't work on tenders typically.
Right.
If you are looking at the civilian industry, right? You are looking at an ROI based kind of an approach. Which is where you define what the investments are for others, and you are trying to capture the enhanced returns or the savings which they make, and then therefore, explaining to the buyer, what exactly is this ROI, right? That's one thing. In a G2G tender, there is a very different dynamic which is at work, right? Depending on where exactly we see maximum sales impact and sales effort impact coming in. We would be employing a variety of strategies. Too early to say whether we would be partnering, in a joint venture format with somebody else or not. Definitely, we will require partners across the globe, as, you know, for local implementation.
What form it will take, we don't know. It's very early days right now. Am I answering your question?
To an extent, yes. It would have been better, I mean, say, if you would have shown or thrown some more detailed, but maybe it's not possible.
We can't. We'll let's save something for some surprise, right? Positive surprise.
Okay. Right.
It's very early days. It's very early.
Okay. Bye. Bye.
Thank you. Anyone who wishes to ask a question, may press star one on your touchtone phone now. Thank you. As there are no further questions, we got last question from the line of Ashik Koti. Sir, please go ahead.
Sir, Astra has moved or come a long way from OTCEI listing in nineties to where it is today. If we have to look at Astra Microwave as from here onwards to next decade.
Yeah, I think we have already gave a picture for the half decade. Probably now looking at one decade, it is too early now. We'll take it forward from that.
I would say defense industry as a sector has established itself. You are aware of Atmanirbhar Bharat. That is becoming a reality. You are aware of BEL, HAL making great strides. You know, you are aware that they are, you know, cracking or they are beginning to crack the export market. There are multiple defense sectors including itself which are coming of age. With increasing visibility and increasing certainty about our business, the earning stream in itself is becoming more predictable and sustainable. I think these are the ingredients for an industry which is becoming mature, will become more mature as we go further. I think it's a such a sizable industry in terms of macro numbers, that there's gonna be a huge amount of business which should be coming across all participants.
We have to make sure we are conservative enough in terms of our balance sheet management and be prepared for the long haul. That's our vision. That's what we are playing at. Thank you for the, you know, for highlighting our journey from when we started. I think, you know, as I, as an analogy which I like to say is that, you know, we have lifted off the runway. We are gaining altitude. I think we will be at a cruise stage very soon. Yeah. That will be a very nice moment for all of us who have believed in the story.
Great, sir. Thanks a lot. I'll reserve my few more questions for the next meeting.
Good. Thank you.
Thank you.
Thank you.
As there are no further questions from the participants, I'd now like to hand the conference over to Mr. S.G Reddy, Managing Director, for closing comments. Over to you, sir.
Thank you for being there with us for the one hour. I hope to see you at the end of Q4. Thank you.
Thank you.
Thank you very much.
Thanks, guys.
On behalf of Astra Microwave Products Limited, that concludes this conference. Thank you for joining with us. You may now disconnect your lines.