Ladies and gentlemen, good day and welcome to Data Patterns India Limited Q4 FY 2026 earnings conference call hosted by Go India Advisors LLP. 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 call is being recorded. I now hand the conference over to Ms. Prayasi Patel from Go India Advisors. Thank you, and over to you, ma'am.
Thank you. Good morning, everyone, and welcome to Data Patterns India Limited call to discuss the Q4 and FY 2026 earning call. We have the senior management of the company on call, Mr. S. Rangarajan, Chairman and Managing Director, and Mr. Venkat Subramaniam, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company may face. May I now request Mr. Rangarajan, sir, to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.
Thank you, Prayasi. Good morning, ladies and gentlemen, and a very warm welcome to all of you to the Q4 and full year FY 2026 earnings call of Data Patterns India Limited. We sincerely appreciate your continued trust, support, and participation. I hope all of you had the opportunity to review our earnings presentation, which has been uploaded on the stock exchanges and our company website. Before Venkat takes you through the financial performance in detail, I would like to briefly share some key business and operational highlights for the year.
FY 2026 has been a significant year for Data Patterns, marked by strong execution, healthy order inflows, continued capability expansion, and increasing participation across strategic indigenous defense programs. During the year, we continued to strengthen our position across radars, electronic warfare systems, avionics, communication systems, and strategic defence electronics, supported by our strong in-house design and engineering capabilities built over nearly three decades.
One of the key highlights of the year has been a strong momentum in order inflows. During FY 2026, the company recorded order inflows of approximately INR 1,121 crore, increase of 216% year-on-year, reflecting healthy demand across multiple defence and aerospace programs. The order inflows were well diversified across radar systems, avionics, electronic warfare, services, and strategic electronics applications, demonstrating an increasing customer confidence in our technological capabilities and execution track record.
The order book as on date stands at approximately INR 2,062 crore, including orders negotiated, which provides a strong revenue visibility over the coming years. In addition, we continue to see a healthy pipeline of opportunities across radar systems, electronic warfare, and advanced defense electronics. Other than the order book, additional single vendor contracts based on already supplied products, which can justify into contracts this financial year, stands at INR 1,900 crore.
Further, based on previous delivery and performance of strategic system supplies, our customers would like to place further contracts on such programs leading to significant order book expansion. We could get visibility of this contract including timelines during the year. Our early investments made towards realizing EW suites, including self-protection jammer pod for Indian fighter aircraft, have been well received by IAF and we are poised to take the next steps for flight testing. This will lead to revenue during the medium term.
The opportunities being addressed by Data Patterns with in-house developed large systems already delivered to customer has immediate requirement to address strategic space-based surveillance and mitigation, allowing Data Patterns to substantially increase revenue in the coming years towards building an order book of at least three years revenue, ensuring predictable growth. We are entering into an exciting phase in India with the defense and aerospace industry set to grow substantially to reduce reliance on imports, especially in this geopolitical situation.
Further, with the advance of AI in all phases of our business, Data Patterns has leapfrogged into absorption of AI for processes as well as technology and products. This will allow Data Patterns to introduce new world-class products quickly to address the earning gap on Indian capabilities and products, necessitating imports and reliance on foreign OEMs to meet our critical defense needs.
We've also repositioned some of our products to address the growing requirement of drone detection, spoofing, and jamming with both radars and ESM products. These are in advanced stages of development and expect to bring in additional revenue in the medium term. We are investing in expanding our product development across radars for airborne platforms, including surveillance and fire control, including maritime applications, which were hitherto the domain of Indian development agencies and foreign OEMs.
We expect these to bring in revenue over the next few years and also allow exports of complete products. Our export business also continued to progress steadily during the year. The export order book as on date stands at approximately INR 53 crore, and exports remain an important strategic pillar of our long-term growth roadmap. We are actively engaging with customers in Europe and other international markets while strengthening our export-oriented marketing and business development initiatives.
We continue to execute repeat business from U.K. and expect export momentum to improve meaningfully as our complete system capabilities mature further. We believe that our revenue from exports will increase starting this year. As most countries are increasing the spend on defense, given the present geopolitical situation, we believe that the products and capabilities offered by Data Patterns will allow even Western countries to procure from Data Patterns, leveraging our capabilities and much shorter time frames, delivery time frames, meeting the requirement.
Through the year 2024/2025, we also achieved an important milestone with the successful development and export of transportable precision approach radars to a European country, including successful site acceptance testing. This reflects not only our technology capabilities, but also the growing acceptance of Indian defense systems and engineering expertise in international markets. We're also getting additional inquiries for these products from various countries.
We believe the global defense industry is entering a multi-decade investment cycle driven by rising geopolitical uncertainties, accelerated modernization programs, and increasing focus on self-reliance and defense manufacturing. Advanced electronics, radar systems, electronic warfare, and intelligence surveillance capabilities are becoming central to modern defense preparedness globally. This creates a significant long-term opportunity for India's indigenous defense ecosystem with its strong in-house design capabilities, advanced engineering expertise, and proven execution track record. Data Patterns is well-positioned to capitalize on this opportunity.
Coming to our financial performance, FY 2026 has been another strong year for the company. Revenue FY 2026 grew by 31% year-on-year to INR 925 crores, while EBITDA increased by 35% year-on-year to INR 371 crore. Looking ahead, the outlook of Indian defense sector remains extremely strong. We remain committed to delivering sustainable and profitable growth while continuing to invest in future technologies, strengthening our complete systems portfolio, and maintaining a strong balance sheet.
We continue to target revenue growth of around 20%-25% over the short term while maintaining healthy EBITDA margins of 38%-40% and preserving our net cash status. Most importantly, beyond financial performance, we remain deeply committed towards India's journey of technological self-reliance and strategic defense capability development. With that, I would now like to hand over the floor to our CFO, Mr. Venkata Subramaniam, to take you through the financial performance in greater detail.
Thank you, sir. Good morning, ladies and gentlemen, and thank you all for joining us today. We are pleased to report another strong year of operational and financial performance for Data Patterns. FY 2026 reflects the continued strength of our execution capabilities, resilient business model, and increasing demand across strategic defense and aerospace programs. Let me take you through the key financial highlights for the quarter and full year FY 2025/ 2026. Revenue from operations for FY 2026 stood at INR 925 crore as compared to INR 780 crore in FY 2025, registering a healthy growth of 31% year-on-year.
Gross profit for the year increased by 35% year-on-year to INR 585 crore due to increase in revenue and favorable product mix, while gross margins improved to 63% compared to 61% in FY 2025. EBITDA for FY 2026 stood at INR 371 crore as against INR 275 crore in the previous year, reflecting a growth of 35% year-on-year. EBITDA margins improved to 40%, supported by operational efficiencies and improved absorption of the fixed costs. Profit after tax for FY 2026 stood at INR 271 crore, registering a growth of 22% year-on-year, while PAT margin remains healthy at 29%.
Coming to the quarterly performance, Q4 2026 revenue stood at INR 345 crore, while the revenue was lower by -13% year-on-year. Due to timing of execution of certain programs, revenue nearly doubled sequentially with a growth of 99% quarter-on-quarter, reflecting strong execution momentum during the quarter. Pertinent to also note that share of fourth quarter revenue was 37% in FY 2026 as against 55% in FY 2025. Gross margin for Q4 FY 2026 improved significantly to 73% as compared to 49% in Q4 of last year. EBITDA for the quarter stood at INR 193 crore with EBITDA margins at 56%, while PAT for the quarter stood at INR 139 crore with PAT margin of 40%.
From a working capital perspective, we continue to see improvement in operational efficiency during FY 2026. Our cash conversion cycle improved meaningfully to 365 days in FY 2026 from 428 days in FY 2025, reflecting strong execution, better inventory management, and continuous focus on disciplined working capital control. As of March 2026, our order book stood at approximately INR 926 crore. Including negotiated and expected orders, the order book pipeline remains strong at around INR 2,062 crore.
Our order book continues to remain diversified across radar systems, avionics, electronic warfare, communication systems, and strategic electronic applications. The company continues to maintain a strong balance sheet and remains a debt-free company. We believe our healthy liquidity position and disciplined capital allocation strategy provides us with the flexibility to continue investing in R&D, infrastructure, advanced technologies, and manufacturing capabilities. Going forward, we remain optimistic about the long-term opportunities in the domestic and international defense sector. Continue to focus on execution, operational efficiency, technology development, and profitable growth. With that, we would like to open the floor for question and answers. Thank you.
Thank you very much. We will now begin the question- and- answer session. If you want permission to ask a question, please dial star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are asked to use handset while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles. We will take our first question from the line of Dipen Vakil from PhillipCapital India. Please go ahead.
Hi. Thank you for this opportunity. Congratulations on a great EBITDA margin and surpassing the revenue and guidance for the year. My first question is on the lines of your margin profile itself. You have told us that this quarter you had some great EBITDA margin. Can you help us understand as to what is the which product mix has led to such strong EBITDA margin? Out of those order books, what kind of EBITDA margin can we expect going ahead?
You see, we have a differentiated product line. The margins for Q2 were much lesser because I earlier explained in that call also that there is a strategic program where we've taken a contract at a lower cost and the margin. It's built us capability to build a complete system and also the program management office which is necessary, other than also demonstrating mechanical capabilities, which is not when we talk, we're an electronics company. These are the takeaways from this contract, and also our commitment that this will also lead to future contracts. We take some contracts with lower margin consciously to ensure that we build a capability, product capability, and also allows us future expansion. That is the reason the last year quarter-to-quarter differences were there.
Though there's a increase in revenue in quarter two and, you know, overall revenue has been as per guidance, slightly better than guidance. The rest of the margin which you talk about, is that is normally where our complete product development is done in-house. Where all the IP is created in-house. We don't import anything and integrate. This is in nature of exactly what we normally do. Since there is no bought-outs those last quarter, revenue, and it is all our own full systems which has been developed by us as told, the margin profile has been different.
You need to look at not, you know, you can't give a direct guidance on, you know, contract to contract, how it will go in terms of EBITDA or margin, because this is the overall business cycle. There are very many products and we take some products at different kinds of pricing based on our one, ability to absorb it, two, to see how the future business is going to look at. The business prospects, we take a call on that and take a decision where to make an offer, how to quote it. This is what we've done. Now that the opportunities are much larger and becoming much, much larger, we need to build a capability upgrade into the, in our company to address larger opportunities going forward. I think I've answered your question. If anything else, please ask again.
Yes, sir. That was very much clear. Just another thing on that, you mentioned that you have currently INR 2,000 crore of order books, of which INR 1,000, roughly INR 1,000 crore, is already in the books and INR 1,000 crore expected. Any timeline on that as to when we can expect finalization of those INR 1,000 crore when negotiations are completed?
I think in the next one to two months' time, we should expect the contracts to happen.
Okay.
Unless of course there is some, you know , see these are all government customers. I can't predict for them. Our feeling is that it should happen in the next one to two months' time.
Over and above that, we are expecting orders to the tune of INR 15 billion-INR 20 billion for FY 2027?
Yes. See, what has happened is we have developed products earlier and those products during the course of this year will have repeat orders. That has been projected at INR 1,900 crore. These are all single tender orders which is expected during the course of the year. The timing is not exactly visible. That is why I said during the course of the next 12 months we should get additional order book, which is based on already developed products and delivered and accepted by customers.
Repeat requirements are already quoted for in some situations, and inquiries have also come in for other equipment. Wherever we're talking about those INR 900 crore, we've already quoted for those requirements. Only thing is the, some of the negotiations may have to happen, and the timelines are not exactly in our control, but it should happen during the course of the year.
Got it, sir. Got it. Sir, last question on the productions. In this order inflow, what will be the proportion of the production order inflow, which are expected to be like short cycle orders? Any indication on those that out of those INR 2,000 crore or maybe INR 1,000 crore, how much will be the quantum of the production orders?
I can't give you exact ratio now. What is already delivered, I said if you get a repeat order with INR 1,900 crore, that'll all be production orders because already we've done the development. On the existing INR 2,000 crore, some are service orders, some are already developed orders, and some are new development which is going to take place. I don't have the exact mix and percentages.
Whatever we've taken up, even for development initiatives we're taking up, we're looking at it only with the perspective of future requirements are there for such products and programs. Whatever we develop, we develop as building blocks, and they have a future requirement in other applications as well. That is how the development cycle is actually managed by the company. I can't give you exact number, but there will be larger size production contracts for the overall business we expect as we go along.
Got it, sir. I have a few more questions, but I'll get back on the queue. Thank you so much.
Thank you. Next question is from the line of Rishika from Goldman Sachs. Please go ahead.
Hi. Good morning, everyone. Thank you for the opportunity. Sir, I have two questions. You indicated that you're working with global OEMs. I wanted to understand what's the traction around that, and if we have anything apart from U.K. Secondly, when can we expect to get the order for BrahMos seeker? Certain media articles indicate that the production is hampered. Will it have a material impact on our revenue growth in FY 2027?
Okay. First question is global OEMs. A number of them have started visiting us and quite impressed with whatever we've achieved in terms of capabilities and products. Similar products are required in Europe, so the inquiries have started coming from Europe for building such products, and they quite like our prices and delivery time. I think in the next two, three months' time or four months' time, we should start getting some contracts from these global OEMs, which will lead into some development initiatives initially but then it w ill lead to year-on-year or quarter-to-quarter delivery for their actual military programs for which they are addressing their opportunities. This is going to be not a one-off system, it will be multiple systems based on what we already developed and modified to meet their OEM requirements.
This is one part of the story on exports concerned. We also want to now expand our own export team, build a team to address exports because we believe that there is going to be increased, you know, look at India with our capabilities and delivery models, which Europe and U.S. and other countries would be looking at very seriously. I think this is a growing business. Since we have done a lot of product development in-house, which matches the requirement immediately, I think there will be a lot of traction once we put the marketing team to address the opportunities. We are going not just U.K., but other than U.K., also in Europe.
Inquiries have started coming in. Other people have started visiting us, also from U.S., from civil aviation and things like that. People have started visiting us, and they're quite taken interest in our capabilities and inquiries have started coming in. Regarding BrahMos seekers, the first variant of the development seeker order is under execution. Once that execution is completed, I think in the next four, five months' time, the production orders will start coming in. They've indicated production orders, and they want it to be delivered before next year. Middle is what the customer is saying. I don't think there is going to be any distress on delivery timelines as far as BrahMos is concerned.
With our kind of seekers and systems, whatever orders was given in three, four months back in BrahMos, we've already delivered and b y March we delivered it. Our timelines for delivery is quite fast with respect to other competitors which were there in this line of business. I don't think we'll have a problem in terms of revenue. Anyway, this is part of the expected order of INR 1,000 crore is what we've projected, not in the orders on hand situation. I don't think there'll be a revenue upset based on BrahMos even if there's a delay. I don't think there's going to be a delay.
Understood, sir. That's helpful. Thank you.
Thank you. Next question is from the line of Hardik Rawat from IIFL Capital. Please go ahead.
Thanks for the opportunity and congratulations team on a wonderful result. Sir, my first question would be with regards to the current order book. We have some INR 1,000 odd crore of order book, and we expect another INR 1,000 odd crore of negotiated orders to flow through in the coming month or two. Just wanted to understand, you know, our order book mix, if I look at today, the share of services in that is roughly INR 350 odd crore. The order book as at the end of Q4. When you talk about the negotiated orders, could you give us an indication as to what part of this would pertain to services or, and what part would pertain to products?
I think about on this INR 1,000 crore which I have said, maybe about INR 100 crore will be on services. The rest on product delivery.
Got it. We should be sitting, again, not understanding that, you know, the orders can be delayed. Our expectation is that we should be sitting at a product order book of about INR 1,500- odd crore. Would that be correct? INR 575 crore that you already have and some INR 900- odd crore that you'll be getting.
Yeah, around that or even slightly higher.
Got it, sir. Now I want to understand, you know, since a large part of our product portfolio and because of our faster execution timeline, the execution has largely been short cycle. What do you expect the execution cycle to be on this INR 1,500 crore of orders that you'll be sitting at in a month or two?
That is not whether we can execute or not. Depends on the program requirements. Some of the program requirements are spread over three years delivery. Some is delivered to in a few months. That varies from the contract to contract and t hat'll be mostly based on customer requirements, not on our ability to deliver.
No, sir, I get that. What I am trying to understand is that based on the delivery schedules that you have, what is your expectation in terms of order execution cycle? If you can break it down, what do you expect? Again, we are not holding you to this, what do you expect?
We have projected about 20%-21% revenue growth. We won't think we'll have a problem on those things, so that will happen. If the other INR 1,000 crore things come in early, some part of it can be executed this year also and so t hat will also bump up our revenue model. Since the, y ou know, we don't have the exact timing, we have only projected this 20%-21% growth. Once the contracts are earned, we already developed these products. Our execution timelines can be matching customer requirements or even earlier. Depending on that, the delivery model will happen. At the present moment, we don't want to wager any kind of saying that we will do this this way because we know we are confident doing this. This is a base point. I think as the contracts starts coming in larger contracts, our projections may vary from quarter- to- quarter.
Got it, sir. That's very helpful.
I'm sorry to interrupt. Hardik, you may please rejoin the queue for more questions.
I think I just asked. All right, no worries.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. We will take our next question from the line of Riya Bhatia from PNB. Please go ahead.
Yes. I just wanted to understand about the order inflow for the year. You said around INR 1,500 crore-INR 2,000 crore. This is apart from the INR 1,100 crore that's been negotiated, right?
Yes.
Okay. Would it be correct to assume that you'll be ending the year with around INR 3,500 crore-INR 4,000 crore of order book?
No, we will also be executing contracts which is coming in, no? We have to review that.
Okay. What will be the closing order book for the year?
I think it's a bit early for that. We will come towards the year-end before we give you the numbers. It's a bit early because there are a lot of programs we're working on. Some of the large contracts and strategic programs also the order may start coming in. If the order starts coming in, the order book size will, it'll grow, plus the export revenue which is going to happen. There are so many areas of product development and, you know, we are making offers to customer. If it was successful, you know, we will be able to have a very healthy order book going ahead.
That is why in the opening remarks I mentioned that this is the first time I've given a all-rounded view on the market and where we are in terms of investment models and product models, and how the business is supposed to scale in the coming, you know, in the short and medium term. I've given you overall perspective on existing, you know, repeat business from existing deliveries, new things which can happen, and then other areas where we are focusing on product development also, plus the export and the repeat business we expected.
We've also said that if some of this, what we predicted, it happens, we'll have a healthy product, you know, order book, which will also give us a clarity of quarter- to- quarter growth over the next two to three years' time, while we still strive for building larger businesses going ahead. I think we have a fairly rounded view I've given on the opening remarks. To exactly tell you end of March, what will it be, I think towards the Q2, Q3, depending on how we get the orders going ahead, that will give you better answers.
Understood, sir. Thank you so much.
Thank you. Next question is from the line of Akshay from AK Investment. Please go ahead.
Hi, sir. My one question is already answered, and congratulations on the great set of number. Sir, my second question is how much cash flow from EBIT are we expecting to generate in FY 2027 and going forward for the next two to three years? Because for the last two years, our cash flow generation from operations has been very weak.
No, I didn't understand the question. What is this CapEx? What is that?
Sorry?
What did you ask?
Sir, I am asking about the cash flow from operations. Since last two years, our cash flow from operations has been very weak.
Guest flow?
Over the next two to three years. Cash from operating, sir.
Oh, cash flow from operations. Okay. Okay. Okay.
Yes. Yes.
Uh-
Yes. Over the next two to three years, how much conversion from EBIT are we expecting?
I don't know. Venkat, do you wanna answer this question?
The cash conversion cycle today is at 365 days. We are seeing improvements year on year. We expect it to, you know, probably settle down at 320-340 days going forward. Year- on- year, we cannot. At the beginning of the year, it's very early to, you know, calculate all that and come out with an answer for this. We are definitely focusing on reducing the working capital cycle, and it is also showing some improvements year on year. Going by that, we expect it to settle down at, I mean, 320-340 days going forward. Probably during the middle of the year, we can take a review on this and some color can be given, but this is too early now.
Okay, sir. Thank you.
Thank you. Next question is from the line of Pujan Shah from Molecule Ventures. Please go ahead.
Hello.
Am I audible? Hello.
You are audible.
Yes. Actually, first question pertains to, in the last, our con call, we have said that we might receive the INR 1,100 crore in one t o two months timeline. While that has been delayed, but while I was also reading, some of the tender participation and where we can be, I have seen that, there is also an order of INR 1,007 crore for Tejas Mk 1A. Is it possible that?
Pardon me.
it is the same order?
Pardon. What is that order? INR 1,007 crore. What is that?
INR 1,007 crore order value, for Tejas Mk 1A.
Tejas, okay.
Is it the same order which, I'm been considering or you have been considering in the last con call, or it is just different order altogether?
These are not the Tejas 1. Tejas 1 is part of some inquiries have come. We've quoted for whatever, our products are going, avionics is going into Tejas. Hopefully the order should come during the course of this year. It normally goes a very large negotiation cycle with HAL, we have to wait and watch when the order is placed. We've not projected anything on last year for Tejas. We had orders on hand, which we executed, the new order projections is this year only. We're talking about other than that, orders on hand situation. Already delivered products which repeat orders may happen. For this, we've already quoted, Tejas also we've already quoted. We'll have to see when the contract comes. It'll be only this year.
Okay. I just want to clarify, sir, because the tender was closed on, I think, 13th or 23rd of March. I don't remember the date. In 65 days of timeline, it needs to be concluded on their side. There is no update from on the portal or something like that. How should we read that?
I don't know which you're talking about. I'm not aware of what you're talking about. I'm not able to comment on it.
To give you more clarity, actually, the orders negotiated of INR 1,000- odd crore, which was shown in the previous conference call, is not a single case, it's multiple cases. Some of them, we have got the contract, and that number now stands at INR 1,090 crore. I mean, we have got some more contracts negotiated in between last conference call and now. Put together, INR 1,090 crore as on date as we speak. Including that, our order book today stands at INR 2,000 crore+ , INR 2,062 crore to be precise.
Right. Right, sir. We'll wait for the Tejas order to happen. We'll announce it to the market as and when the order happens.
Okay. I just want to understand.
I'm sorry to interrupt. Poojan, you may please rejoin the queue for more questions.
Sure. Sure.
Thank you. We will take our next question from the line of Garvit Goyal from Serene Alpha. Please go ahead.
Hi. Hello. Am I audible?
Yes, you are.
Hi. Good mor ning, and congrats for good numbers. Sir, in your opening remarks, you mentioned about some delays with certain programs. Can I know what kind of programs are these? If these delays and these programs are getting deferred to FY 2027, fundamentally, your growth should be more than 25%. Why we are speaking about 20%-25%? That's my first question.
No, I never marked any. What are these 13 programs? I don't know what you're talking. Which 13 programs?
Not 13. I'm saying, you mentioned about some programs getting delayed in execution in Q4 that will be deferred in next year. That's what you said, right?
No, no. I never said anything like that. I only compared quarter two to quarter four performances. There are expected orders from whatever we deliver in quarter two. I never talked about any delays. I only talked about orders which is expected, let's say, another INR 1,000 and odd crores for repeat contracts. I am not able to give you timelines on those orders because these are all government contracts. I expect this to happen over the course of this year, is what I said. I never talked about delays on any other thing.
Okay, understood. Okay. If I look at the execution in Q4, it is falling behind Q4 last year, right? We were having the order book in our hand, right? What is stopping us from executing those contracts? Like, what is the reason behind the poor execution?
This is not a poor execution.
Poor.
Actually, very good. It's not poor. It is a good execution. Execution is, has to be in line with customer requirements. I may have an order on hand, but customer doesn't want delivery today. There may be preconditions to our delivery. Based on customer request, we deliver, and based on the contract. Execution has not been poor. Actually, execution is very good. We delivered things in two months and three months, which is very, very good. Our board is very happy with the execution and how we manage the execution. There's no delay from our side. It's a question of the agencies, government agencies getting together to approve these kind of things. Normally it goes through a process, and that process delay is not, you know, addressed by us. We can't address those process delays. We've never had an execution delay from our office.
Understood.
I'm sorry to interrupt, Mr. Garvit Goyal. You may please rejoin the queue. Thank you. We will take our next question from the line of Shrinarayan Mishra from Baroda BNP Paribas. Please go ahead.
Thanks for the opportunity. My first question is on the, largest order that we have received in Q4, IMD radar development and service order. What would be the execution cycle, for that order?
The requirement is between, around 18 months. We're trying to see how fast we can deliver it.
Okay. Sir, since I can see in the order backlog, services mix has increased significantly. Would that mean trade receivable days would improve, or how should we see that?
No, no. You're talking about services?
Yeah. In the order book, services mix has increased significantly.
No, trade receivables will not increase because we won't bill for services until the services are carried out. If only product delivery happens, we bill only product development.
The services part of the contract will be billed as and when the services happen and delivery of the services happen. There are two independent parts to the order. We will not bill the overall amount and wait for services to happen over the next four, five years. That is not the way revenue recognition is done. It's not done that way.
Service orders represents our AMC revenue. AMC is actually for multiple years. It's not a single year AMC.
There is a process for re-revenue recognition.
Billing. Sorry. Sorry, sir.
There's a process revenue recognition. This will not add to, you know, any receivables increase and all those things.
From the date of billing of a service order, how many days it takes to collect the amount?
Depends on the customer.
That depends on the customer, yeah.
Depends on the customer and the processes involved.
What we do is, after the service, that again depends on the contract, when the billing can start. We, at the end of the service contract, one year over, the annual billing can be at the end of the year. If it is quarterly billing, then quarterly. It depends on the contract. Varies from contract to contract. The payment cycle terms varies from customer to customer.
In general, if you were to generalize, is it better than production orders?
I can't generalize because there are your uniquely government agencies are there. IMD is our first case which we've taken up now. Until we get some money transferred from IMD, we won't be able to generalize.
Okay. Thank you for answering my question.
Yeah. Thank you. Thank you.
Thank you. Next question is from the line of Amit Sharma, an individual investor. Please go ahead.
Hello. Hi. Thank you for the opportunity, sir. Congratulations on great set of numbers. I have two specific questions, one related to our current order book. We have about 38% of our current order book coming from services, which has roughly an elongated execution cycle. Even our negotiated order book of 1,090 crore, even within that also we have a sizable amount coming from services. Does that put a pressure for us in terms of our growth size? I mean, would our growth will be, say, 25% growth? Would that be a pressure point for us for the coming year as well as for next year at 2028?
Okay, this question has already been asked and answered. INR 1,090 crore, I gave an approximately about INR 100 crore will be services. The rest is product delivery. It will not affect the our top line revenue growth as what we projected. We projected 20%-25%. We believe we should be able to do this. On top of why we said we should be able to do this, is also that there are a number of repeat contracts we're expecting during the course of the year. If it happens early, then we can deliver those products earlier. That also will bring in additional revenue or, you know, either the part of the revenue projections or over and above the revenue projections, we can do that. It depends how the order inflow happens during the course of this year.
Basically what we are saying is that the quick execution order book like we had in the current year is what we are largely depending on for the, to achieve the ballpark number that we are guiding for the current year. Is that correct or not correct?
Yeah. We believe it'll be substantially higher than the guidance number, is what we expect because, I think there are a lot of long-term initiatives the company has taken. I think those initiatives, number one, will start fructifying into contracts. Once it starts getting contracts, our order book situation should grow substantively in the coming years, is what we expect. We have, you know, developed products over a period of time to ensure that we can scale the company very quickly into multiple INR 1,000 crore company rather than scale it 20% year-on-year. That is not what we're looking at in the management cycle here. We're actually looking at some very high scalability in the coming years. The strategy and product development mix is working towards how to build that scalability, and sustainable scalability is what we're working on.
Got it. Got it. Sir, my second question is.
I'm sorry to interrupt, Amit. You may please rejoin the queue. Thank you. Next question is from the line of Sahil Karia from White Pine Investment. Please go ahead.
Yeah, thank you for the opportunity. I just want to ask, apart from BrahMos missiles, which are the missile programs are you delivering?
No, I can't hear you at all. I can't hear you at all. Can you come to nearer the phone and call?
Now audible?
Yeah.
Yeah. Apart from BrahMos missiles, which are the missile programs are you delivering?
I'm sorry to interrupt, Sahil. Can you use your handset mode, please?
Yeah. Am I audible now?
Yes, please.
Yes.
Yeah. Apart from BrahMos missiles, which are the missile programs are you delivering products to? For which products are we L1 vendors?
No, I'm still very confused with your question. You're not very audible.
Apart from BrahMos missiles, which are the missile programs are you delivering products to? For which products are we L1 vendors?
Other than the BrahMos product, there's one other program for the air defense. We've done a seeker that is under delivery mode now. There are no other programs on the missile area. We're working on seekers. As a concept, we want to take up initiatives to build other kinds of seekers, electro-optic, etc. , seekers on our own. Where we were positioning ourselves with an industry partner to see that we can build a revenue model as we go along. Those are all development initiatives internal to office.
As of now, we don't have anything else. We work on whatever DRDO allows us to do. We develop the product as per their requirement. Till then, it will be now very controlled by DRDO on the missile program itself. As and when the missile program becomes opened up and other agencies start building, large corporates start coming into the business, then maybe we should be able to do a large part of the missile and have a ecosystem which will develop the system. That's yet to happen.
Okay. Sir, the second thing is.
I'm really sorry, Sahil. You may please rejoin the queue for more questions. Thank you.
Okay, thank you.
A reminder to all the participants, kindly restrict yourselves to one question only. In case of follow-up question, please rejoin the queue. We will take our next question from Jenish Karia from Union AMC. Please go ahead.
Yeah, good morning, sir. Am I audible?
Yeah.
Yeah. Thanks for the opportunity. My question is on the AMCA program. Any update on our consortium position for the AMCA program? Irrespective of the outcome of the which consortium is winning, what would be our opportunity within the AMCA program?
The AMCA program RFP is expected any time now so t hat is the first status. Second is, on the AMCA, the glass cockpit is developed by us. The mission systems is developed by us for the LCA Mk-2, which is going to be taken to AMCA. We are hoping that as we go along, more such, on the sensors and, RWR and radar and things like As and when we are able to develop products and, it is accepted by customer, more such programs will follow. At the present moment, we have only the cockpit solutions and mission management system is being done by us.
Thank you. Next question is from the line of [Santosh] from ITUS PMS . Please go ahead.
Hi, sir. Am I audible?
Yes.
Okay, sir. I just wanna know, like, out of the negotiated order of INR 1,000 crore, you did say that if the delivery schedules are okay, we might deliver some of those contracts this year. Would that growth be over and above the guidance of 20%-25% you are guiding for?
No, I never mentioned. I think you misheard me, misunderstood the whole thing which I've answered. Yes, I never said the INR 1,000 crore. We totally talked about orders at hand, the expected orders that have been negotiated with INR 1,000 crore. I never said that this will be delivered earlier and things like that. I talked about other INR 1,900 crore. If it were to come, similarly in the business is what happened through the course of the year, comes in early, then I can execute them early. That is what I talked about, not on the contracts on hand. I didn't understand the second part of the question.
Right, right. Thank you.
What was the second part of the question?
Just asking that if that INR 1,000 crore, if the delivery schedule is allowing you to get the revenue today, would that be over and above the guidance you are suggesting for? Because is there any capacity constraint is my question as well?
No, we are building large capacities.
Okay.
For expected contracts, already capacity we have built. We are building something about nine floors of factory space to build in additional capacity to see that we, you know, as the program sizes increase and the volume of contracts increase to scale to a multi-thousand crore company, we already, you know, started investing on CapEx and infrastructure expansion, because it takes one to two years' time. We're already in the process of doing it. For seekers and other things, we already put the aggressive building blocks and infrastructure necessary to ramp up production. Already we've done that. I don't think we will have a problem in execution.
As and when it happens, we are aware of when this will happen. Of course, the timelines are not very predictable. We have taken a cautious view of not overspending on infrastructure, and the contracts don't happen. I don't want to sit on, you know, CapEx infrastructure there. This has to be judiciously implemented. We are aware that scaling is going to happen substantively. We are taking aggressive position on terms of CapEx infrastructure to address the scaling requirements as we go along.
Okay, sir. Understood. Thank you.
Thank you. Next question is from the line of Dipen Vakil from PhillipCapital India. Please go ahead.
Hi, sir. Thank you for the follow-up opportunity. Sir, I wanted to understand on your product development and also on the Virupaksha, component for the Virupaksha radar that you had supplied to Indian Air Force as well. Any update on that as to what is the progress, how was the response, and if there's any concrete order which we can expect from there? You also mentioned about the new areas of development around anti-drone systems, drone detection. Can you tell us more about the timeline as to when these products will start getting commissioned or other in that approval stages, and we can expect some revenue from them?
Okay. First is Virupaksha is not our product. Virupaksha is a DRDO approved project, name for the Super 30 radars. This is not ours. We call it by a different name. We've not delivered Virupaksha or any equivalent to Air Force as yet. So that is a wrong information you have received. We have our own versions of it, and we believe that will also be taken up, by Air Force in the coming years, b ut because of the uncertainty and timelines, which I can't predict, we've not given revenue expectations out of those things and, in our, you know, opening remarks.
Similarly, when you talk about anti-drone, yes, products are getting done. We will be participating and demonstrating the products to Army and Air Force and whatever. That will happen. Again, we don't have clear timelines when what will happen. We have started quoting in some locations, and if we are successful, the quotes, we may get the order, but these are all things which is, again, a quote and competition basis. Timelines are. Revenue model is not, what do you say, very clear now, b ut then we need to expand the product portfolio and be aware of what is happening and the need of the customer, is trying to address the need in overall. We're developing a number of products, and these are all repurposed products.
Already we have done something. With incremental effort of three, four months, I can position the products, so it makes sense to do that. Our product will be reliable and meeting the specifications. We believe that there will be some revenue model going ahead, but I can't predict anything at the present moment. On new product development, we don't do revenue projections. Unless clarity is there for the market and it is in acceptance stage, and later requirements start, inquiries start coming in, I can't give you projections.
I'm only talking about the overall business environment and product development to help to the investors to understand how scalability we are going to ensure that we can be a larger business going ahead in the next two, three years' time. That is how the overall business perspective and product development has been explained. Not to the exact revenue model, because I can't give you numbers like that.
I'm also looking for the timeline on the new product development as to when we can expect the new products to start coming into your product portfolio per se.
That will all happen as it's happening already, that depends on the product. Anti-drone is a smaller system, so it can happen quickly. The other, you know, the other EW suite for self-jammer is a two-year, two and a half year initiative which we've taken up, and that is in the next one year it will come to conclusion. It depends on the product and the complexity of the project and program, and the acceptance models. Air trials have to be done. It takes a longer time. It takes one and a half to two years' time to do air trials. Why I give you the overall perspective is that we are not only looking at contracts now, we are also looking at mid shorter term, some kind of product development initiatives and repeat contracts.
Slightly immediate term, we've already invested and continued to invest in new products and orders, which is actually needed by the country, which is not presently, you know, positioned. No Indian company is positioning. The only foreigners are positioning products there. In competition to products, our product should be far more economically priced, and support systems are going to be far superior, as long as the product meets world-class specifications. Based on that, we believe there are low-hanging fruits, but timelines are not predictable, so we will not predict timelines and revenue models out of that.
Got it, sir. Thank you for answering my question, and all the best.
Thanks.
Thank you. Next question is from the line of Aditya from Avendus Institutional Equity. Please go ahead.
Hi, sir. Congratulations on your set of numbers. My doubt is regarding our competitive peer, which is Astra Microwave. I have been following the different companies access. In this case, Astra Microwave is also, like, in line with providing more on complete system, like similar to us. They have been transitioning in that aspect. How are we trying to position ourselves in case of the competitive front when compared to one such peer, like let's say Astra Microwave, in case of systems and orders which we have on the table?
I wouldn't like to comment on specific and competition in open line, so I will refrain from answering this question.
That's all for questions from my side, sir, o r if possible, could you just explain more on our technological side in case of our product development, which is part of our R&D efforts, like details more on the technical part of it?
We have a strong in-house technology development team. Nearly about 1,200 engineers working with us. As what we've done all through the years, we develop products and write off the revenue expenses, except in few cases where we made a CAP fund for product development, which is capitalized. We don't do capitalizing. We continue to do enormous amount of product development as part of our yearly requirements, and then have the product ready for markets which we perceive or we believe is going to open up to us. We take such kind of initiatives and upfront invest products, and we're investing now products on radars.
Earlier, only the hardware was being done by us because the DRDO software is done by them. The markets have opened up, we decided that we build the software and full radars. We've done a few radars by here, and some of them have been exported. We're building the drone detection radars. We want to get into the airborne radar programs, we are doing the airborne development programs for airborne radars, including software and complete radars. We were doing the IFF. We want to do the mission systems. We want to do the EW. Already it's flying, we want to enhance the scale of EW.
The communication intelligence, we want to do world-class systems. We are increasing specifications to see that it is a top online world-class specifications are met. Like that, in every product area, we're trying to improve the product capability and address it to the world markets and see that we are in line with the world systems so that we can offer best solutions for India and not, you know, second to none is what we're trying to do. Our area of focus is, if you take avionics, you know, radio, mission systems, communications, radars, EW, IFF, a lot of other things which goes into UAV platforms.
And parts of the radar as for DRDO requirements, complete radar solutions wherever we can do that. Export of these parts and systems to international OEMs. All of this is what we are looking at. We have fairly deep technological capabilities in all of them, and we have a very strong group of people who've been with this company for 20, 25 years, who will drive this technology. Also the middle management on engineering who are all 15, 20 years in the company. There's a very homegrown kind of an organization, where there are no levels and product talks and all of us listen. The idea is to develop products which is world-class with the market opening up, and we want to build a large-scale company going ahead.
Thank you, sir.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to the management for closing comments.
Thank you all for joining in on this conference call, earnings call for Q4 and the year, FY 2025, FY 2026. I've taken time to give you an overall perspective of how our business is growing and where we are trying to develop products. The intent is to see that we scale up multiple times in the coming years. The market opportunities are very, very large, considering that India has been importing all our defense systems and these are core competency in IP-driven products. We have been completely dependent on foreign OEMs who don't share the details and do a manufacturing only in India. Against that, we want to build our own capability in full products to see that we are completely self-reliant and with world-class products.
Some of our initiatives have started giving some results. Some orders are going to come on EW, which we're competing with Germany. We got some contract. We're going to get some contracts. Tenders have been opened and negotiation completed. Things like that. Similarly, on the EW jamming, we have done all that, including the software, the mechanical, the systems, the cooling systems, the electronics, which is world-class. We believe that also should give us some substantive revenue opportunities going ahead.
The third area is what we've already developed and w e've taken some additional risks in addressing these opportunities because we believe it'll help us build scale and repeat orders, as well as build program management capabilities in the company to take them and successfully execute those contracts. Customer is quite happy, so w e believe that there will be some additional requirements will come up which will build scale into the company. Fourthly is, we are looking at exports. Till now, that is not been a focus area.
With the geopolitical environment, the export then now takes a precedence because a lot of weapon companies are looking at how quickly can we deliver products for their military programs. We're trying to address it. Similarly, in U.S. programs, and we need to now have a team to go and address from Japan to Korea to Europe to U.K., to other countries, including U.S. That we are trying to put a team together to see how to address this. We're also looking at how do we scale capabilities in terms of, you know, electro-optics.
What is it we need to do to build an electro-optics, not just a, you know, electronics company and a domain. Domain and electronics, mechanical, all we integrated together to build our own systems. I'll give you an overall idea. We're very bullish, like I said, on the growth opportunities of what India offers today. Since we've been importing everything, it now, you know, it is up to us for grabs. Obviously, there are time lapse and it's government agency, so we need to be aware of that and not do over-investment and then have competition foreigners who come on the back route and put in infrastructure, then you lose the business. We are cautious of the development and what we are putting money in.
Overall, I think we are taking the right approach and direction, and the board and the technology board and the company are quite clear that we're going the right track. We will continue to build like this and, you know, scale the company quite quickly. This is what we expect. We're very bullish on Data Patterns growth going ahead. Thank you very much for your listening patiently for this. If you have any further questions, please pass it on to GoIndia Advisors and we'll get them answered to you through them. Thank you all. Thanks for listening in.
Thank you very much. On behalf of Go India Advisors, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.