Astra Microwave Products (NSE:ASTRAMICRO) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Astra Microwave Products Limited Q1 FY 'twenty seven Earnings Conference Call. 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. Please note that this conference is being recorded. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as of the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. SG Reddy, Managing Director. Thank you, and over to you, sir. Thank you, and good morning, everyone. A warm welcome to all the participants joining the post results earnings call of our company.

0:49 I'm joined by Mr. Mehredi, Joint Managing Director and Athin Kopra, Strategy and Development Director and SGA, our Investor Relations Advisers. The results and the investors presentation for Q1 have already been uploaded on company website and stock exchanges. I hope you had a chance to review them. In terms of the performance, the quarter performance is on the expected lines. The revenue and profitability were moderate modest, I should say, primarily due to temporary delays in customer approvals and closing some of the last stage technical issues, which are expected to normalize in the coming quarters.

1:35 Overall, India's defense industry is increasingly moving towards indigenous design, development and manufacture of advanced subsystems and the systems with the total solutions. We believe companies with proven engineering capabilities and experience in these areas are well positioned to benefit from this transition and as to being one such company. In terms of the opportunities, our stand alone order book as of quarter end stands at INR 2,156 crores, providing strong visibility for the upcoming period. Around 66% of this order book is from defense and the rest, that is 34%, is from space, metrology and hydrology sectors.

2:21 Our consolidated order book stands at INR 2,849 crores, which includes service orders of about INR $2.44 crores, which are typically more accretive to margins. Staying in the order book, I would like to highlight that in the month of July, we secured a significant order worth about INR 2,205 crores from Hindustan Aeronautics Limited for procurement of critical subsystems for Uttam radar. As you know, these are landmark achievement for our company and reflects the long standing trust placed in our capabilities, technology and execution track record in the defense sector. My colleague, Sameer Reddy, will throw more insight into this order, its execution cycle, etcetera.

3:08 Looking ahead, we continue to see healthy progress through our key programs and remain confident in our growth trajectory. We are targeting a top line growth of more than 15% year on year, resulting into about $13.50 crores for this financial year, maintaining a healthy bottom line. With the addition of these significant new orders, we see substantial long term opportunities ahead and remain focused on leveraging our capabilities, strengthening our execution and delivering sustainable multiyear growth over the long term. I now hand over to Mr. Remir Adi and later on, Athim Kabra, who will provide more insight into new product developments, the business outlook for the near and long term and the strategies adopted to take the company to the next level of growth cycle.

4:00 I request MB to take it over. Thank you, Vijaya. Good morning, everyone. Extend a warm welcome to all investors, analysts and stakeholders joining today's earnings call. Yes, please present our key business updates. First, as Jed mentioned, we have achieved a remarkable and significant milestone at the end of July twenty six with the receipt of long awaited strategic order. As I said, this is the single largest order in the history of Astra, and it is a direct result of a decade of continuous efforts, the landmark of Uttam Pradar, which I was talking about, which has effectively doubled our entire order book. So with this major win, our total order book sales to a record breaking of INR 4,300 crores as end date.

4:55 I'm also pleased to announce that we have emerged as the lowest bidder in triple AU of AMCA program. This is a news of a few days back. And probably in a month's time, we will be able to get this particular contract. Alongside this major milestone, the daily operations remaining strong. We booked new orders worth of 185 crores in Q1, matching our performance guidance exactly. Revenue for the quarter stood at 182 crores during the robust operational execution and steady demand for our advanced technology. Similarly, our joint venture, Astra Raphael Comsys performed well, both in terms of order book and also the execution is going in within the guided figure.

5:46 As on date, ARC, that is as Astra Raffle Comsys has order book of INR $8.36 crores. And the current year, we are planning to book sales of INR $3.60 crores. We continue to strengthen our positioning across the defense space and semiconductor segments. During this quarter, we secured a good order from Bharat Electronics, about INR 45 crores worth of contract for aluminum IC chipsets, proving our strong capabilities in radar core components. We also won significant contracts from key defense and space entities, including BDL and space application center. Our production lines demonstrated timely execution and robust delivery capabilities. We successfully built and delivered wide profile of high technology systems like CAR, five gs, isolation, RoE modules, MPR modules.

6:40 And also in EW segment, we have delivered the Shekt, E9 and other programs. Beyond manufacturing, we are also making great steps in innovation. I I'm pleased to inform that in the month of July, we conducted successful technology demonstrations in Jalanhar for two unique, first of the kind products, the electromagnetic wall and the vehicle mounted antidrone system, which we were discussing with you for a few months. These are all initial based first of kind versions that can be fully customized in months to come to meet specific end user requirements. To support this rapidly growing volume and complexity of work, we have invested steadily in automated process, engineering workflows and advanced infrastructure.

7:30 Our production lines and our team are fully ready in all aspects for seamless, large scale execution. Future is exceptionally bright and armed with 4,300 crores order book, as I mentioned, and also a healthy pipeline in coming quarters, scaling technical capabilities, we are confident in our ability to deliver consistent growth and long term value. Our core focus remain on executing our current order book efficiently and while aggressively pursuing new opportunities in both domestic defense and global export markets. Thank you. And now I want to hand over to Mr. Ratin Kopra, is our Director of Business Development and Strategy. Over to you, Ratin. Yes. Thanks, guys.

8:16 Hi, everybody, and congratulations as you and MB for a fantastic order. I mean, I think it cements our role in the overall aero defense ecosystem, and we are very, very grateful to our DPSU partners like HAL and BEL for their trust and faith in our abilities. Besides the fact that Astra has grown under the tutelage of various defense labs and DRDO. So from a bottom of my heart, I think our hearts, a sincere heartfelt thanks to everybody who has been our partner. But with these kind of orders comes a very heavy execution responsibility. And after attending one of our review meetings recently, I think it is not a understatement to define how proud we are of our colleagues who have worked and are working relentlessly in a focused manner to further the cause of defense ecosystem in India.

9:19 You know, we often talk of orders, strategy, vision, but fail to highlight that we are defined by our human resources. Infrastructure and capital can be sourced by many, but it is our human resources cultivated over decades that define us. And we are very fortunate to have created an ecosystem of colleagues who are in now increasingly coming together and collaborating across their domains, sharing their knowledge towards creating systems. And I was playing the game of Zynga recently, and I realized that as we move up to greater heights, we are only as strong as our base.

10:06 While everybody has a critical role to play in the ecosystem, we can build a tall param... Pyramidal structure only if the base is strong enough and wide enough to support the growth. I think that's where the strength of Astra lies. And then logically speaking, the base has to be wide, multi skilled, sustaining, and it has to be recurring. It has to have a steady defensible margin. On top is what I call the next gen solutions, wherein will lie the future as it unfolds, There we might have higher margins right now, but as more solutions emerge, what at the top... What's at the top comes into the middle level and becomes more sustainable margin wise and more mainstream.

11:02 But all this is possible only if you have multi talented, multifaceted teams that are unified by a common vision. You know, I was thinking about our conversation today. I look back and I realized that in the eight... Last eighteen months or so, we have inducted many new leaders into our company to supplement the continuous influx at the mid... Middle levels. New resources as well as replacements for folks who have moved on. Resource rejuvenation has become the order of the day. You know, just to elaborate, we've had a new CTO, a new head of HR and admin, a new quality head.

11:51 We strengthened our purchase department with a new head. Besides new domain heads, we have joined our r and d team. And this is not to miss our new head of sales and marketing. And it is these veterans combined who bring into the company new varied experiences and the knowledge that lays the foundation for higher sustainable growth. So we are very com... Confident and comfortable with our order book. So the obviously obvious focus shifts to execution, and that is what ought to be keeping us awake at night. Just to put things in perspective, in the next five years or so, we are expecting to do at least six to seven times our last year's annual turnover.

12:45 Let me, know, pause for a second to have that sink in. Every single year, we will do more than what Astra achieved in the last thirty three odd years, and that's no mean order by any means. Thankfully, Astra has worked on the scale before during our offset business times, and we have the experience of driving significant business volumes through laser focused execution. So we are beefing up our purchase department and other departments as the risk, which I also want to highlight, is that stretch supply chains across the border, across every country because everybody is restocking on their armaments inventory.

13:36 So we've got to make sure that our supply chains remain intact and stuff comes in within the defined timelines. So what makes us fairly confident about our future order book? I think... And we alluded to it. Astra is emerging as a significant player in the aircraft... In the air... Airborne segment. There are various airborne platforms which are in the works, and Astra happens to be a key part of many of these. Be it Tejas, where Uttam Redar is Astra's, and the recent 2,200 crore order. Actually, it's around $18.70 without GST.

14:24 So we have to keep that distinction in mind. Or the Avax mark two, where we are part of the supply chain. Or the supply chain for mark one, where we will have, I think, at least 25%, if not more, of the designated supply chain. Or the two thirty upgrades, be it on the radar side or be it on the EW side where we are tier one and tier two respectively, or be it AMCA. You know, we are already... We and Bell. Right? Okay? We are l one, l two for the four units of AMCA. We prototyping, which is gonna be done, and that's huge, guys. It are... They are across every platform.

15:15 So what does it mean in terms of numbers? Embraer confirms that we will see at least 1,600 crores being added this year, And we may improve that number by the by the way, over the next few quarters. So the way I... We look at it, over, you know, over the next few years visibility. When we did our QIP, we made a commitment. And Astra is more or less delivers on its commitment. Again, that's another thing which we need to highlight. We had said that we are looking at somewhere between 8,000 to 10,000 crores worth of orders coming in over the next five years.

16:00 Of this, and we just confirmed, 4,300 crores is already in the bag. 5,700 crores if you are looking at the higher end of those order books, okay, or just or just 3,700 crores to be added to make up that commitment. But I am glad to say that we are upping our visibility for the next four to five years. Our order intake over the next three to four years, I think, should be in the region of at least 8,000 to 9,000 crores to be executed over the next five to six years. How are we coming at these numbers?

16:49 4,300 crores is our current order book. Seven... This includes, by the way, a little bit from the QR SAM, which we are expecting will happen... Will come to us partly before this year end. So that will leave at least $708,100 crores worth of orders to be added from... For QR SAM for the first three regimens only, at least for now. We are looking at at least 500 to $7.50 crores orders from our ASR, our joint venture, and at least 3,000 crores worth of business coming in from Super Tea, as well as Anger.

17:35 This, if you add it up, is 8,000 to 9,000 crores worth of business alone coming in order intakes. So this does not include, by the way, chip sales, which may happen at a scale which is better than imagined. It does not include anything from counter UAV solutions electronic wall, which we are building. It doesn't include more products like the area denial systems which we are making. And it does not include anything from exports to other countries where we are already fielding a couple of inquiries, serious inquiries. So, guys, that is the kind of order prospects and business which we are looking at. I would seriously, you know, insist that we look at our ability to deliver our year end revenue targets to you. 1,350 crores for the current year plus minus 25.

18:36 Next year, we are looking at about 1,600 crores plus minus 50. And it is expected thereafter that we will be in a different trajectory as production orders will play out for both of them and. Completely different trajectory from '29 onwards. I will wind up with a note on space and weather divisions being spun off as a separate listed company, replicating exactly the same shareholding pattern as Astra Microwave. You want 5%, you will get 5% in the new company. But the positive spin over there is that SGR, SGRED has graciously accepted the mandate to groom this new company and establish the same rigorous methodologies and standards as AMPL with almost...

19:34 Utmost undivided attention. We will be discussing and sharing with you the detailed plans and introducing the new leadership teams in the next few quarters as we go along. But the company shall operate as an independent entity from 04/01/2027 is our expectation. We hope that our shareholders will experience tremendous value growth in the new company also, like Astra Microwave Products. We continue to work on unlocking further value for our esteemed shareholders. So with this, I'll open the session for question and answers, please. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone.

20:26 If you wish to remove yourself from the question queue, you may press star and 2. Participants have requested to use handsets while asking your question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Amit Ashok Thawani from Clear Blue Capital Advisors. Please go ahead. Thank you for taking my question. My first question is the press release says that we are targeting a top line growth of 10 to 15%, but the presentation says that we are our target is 15 to 20%. As a matter of fact, the same was the case even in the last quarter. Can you please explain which is the correct number?

21:16 Yeah. 15... In excess of 15%. That is 15 to 20% growth is the right one. Okay. My second question is what is the target year end order book, both on stand alone and consolidated? See, apart from the Uttam, the order, we have guided to have an order book of about booking of order book of worth about INR 1,600 crores for the entire financial year. We stand by that. Thank you. Thank you, sir. Yes. Thank you. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.

22:03 Yes. Hi. Good morning, everyone, and thanks for the opportunity. The first question is around the order inflow, and you mentioned in the great level of details platform wise where we are expecting order inflow. Just wanted to understand if we have some play in the EW systems, the SPJ port for pagers, for two thirty, etcetera. And, also, if we have some participation in LCH program of HAL. Yes. Mr. Amit, as far as the EW is concerned for Tejas, yes, we are there as a part of Podjammer. We have one of the major subsystem, AATRU, which has been already qualified for the Tejas SCA Mark IA platform.

22:55 As we are aware, that particular EW suite is under the final phase of qualification. And once it gets qualified, then one it will be detected in the production program. So we will have the production orders also for that. Similarly, for Su-thirty, as Mr. Atim had mentioned, we have the DCPP for development of EW suite for 02/30, that is called Langhat program. And we are one of the concession partner, which has taken it up. And it is going steadily. And we are expecting this program will be completed within the time lines. So we are there both in Tejas and as well as the Virupaksha platforms in EW.

23:42 And LCH, sir? LCH also we have been delivering from subsystems. So if we take these three opportunities, these were probably not covered in the overall order inflow guidance that you gave. How much will be these opportunities, I mean, if I add all these three, let's say? Actually, whatever we have mentioned about next to four years order book predictions, in that we did we considered, like, Anghat for a few numbers and also few numbers of the subsystems from NCH and all. But of course, this Tejas Mark 1A is something which we have recently, we have taken it up. And then I think probably other, let's say crores to INR600 crores may add up in the overall business in the order book projections.

24:43 Great, sir. Thank you. The second question is essentially on you mentioned two very interesting products, AM Wall and Veckel Mounted Counter Drone System. Congratulations for conducting the test on both of these. Just wanted to understand the opportunity size and a very rough number will do. Also, in the last call, mentioned that by Diwali, we will be having some five IP products or with our own IP. Are these two part of that particular group? Actually, let me take that. I mean, we had mentioned three products at least. Okay? EM wall, if you break it up, right, is itself two products. Right? The the counter, the vehicle mounted, complete soft killing and soft kill and hard kill program.

25:28 EM wall itself is an extension with possible additional layers of interceptors, etcetera, being thrown in. We are very well on track for Diwali, somewhere around Diwali, actually, for at least two complete radars of our own and one drone mounted intelligence... Electronic intelligence product. So we should have them. Sir, we That these are the solutions? None of the... None of... Not even a penny of these is... None of a penny from these is included in our numbers which we give you. That's all upside. You know? If it happens, when it happens. If it doesn't happen, it was not there in the numbers. You know? So that's all upside.

26:16 My guess is it will more... It will be more than pennies. It will be rather in pounds. But anyway, the question is, BL has indicated few very interesting orders in their Congo, Shattrukhat, Samagkhat, orders for p 75 I. I'm sure we will have some play over there also. So very broadly speaking, if you could highlight the opportunity size for us in these three platforms. Yeah. We do have some subsystems for Shatrukhat and Samaghat. We are there in the part of the development program, the DRDO. And we do expect production orders from BEL as and when they get orders. Approximately around INR 100 crores to INR 120 crores worth of orders we expect for these two programs put together. Okay. So the last question, if I can squeeze, is on the interest cost, which we saw was down substantially in this quarter.

27:11 So is it due to the lower working capital commitment we have or something else? Yes. If you recall, at the end of last financial year, there is a significant amount of positive cash available in the books of accounts. So because of that, the utilization of the overdraft during Q1 is very minimal. So that is one of the significant reasons why the overall interest cost is down compared to the previous period. Great, sir. Thank you so much and all the best. Thank you. Thank you. Thank you. The next question is from the line of Bafiya Bandhi from Bajaj Alternate Investment Management. Please go ahead.

27:57 Yes. Hi, sir. Thanks for taking my question. So first question is regarding the Uttam Pradar order. What is the average execution time line? And what is the revenue booking that we can see over next two to three years? Yes. That's question. Yes. The overall execution period is about five years, as we have mentioned in the press release. Before 05:32, we must complete the total order. And the first Phase one, the 12 numbers, which we are supposed to complete by September 27, exactly about fourteen months from the date of order. And thereafter, almost every year, on the average of 25 numbers plus, we should execute.

28:46 As we ramp up the production, we can we are even thinking of executing the overall total quantity by FY 'thirty one itself. Got it, sir. Got it. And sir, you alluded earlier on the margin front saying that margin is a key metric. So just wanted to understand what could be the margin range going forward? Because you'll be introducing couple of new products as well. So on a longer term basis, if you can provide some guidance on your margin. Let let me take that. Solution... Product pricing will be a function of the market. Okay? I think the internal feedback from global markets, which we have received attractive from not markets, one global market, where... Is that we are fairly competitive and that's at a very nice margin.

29:38 Okay? So that gives us the confidence that we should be able to maintain more or less our current margin trajectory. But we don't want to commit to you on the margins because there are a lot of factors which will come into play from incremental products, number one. Number two, I think what we are pitching for, what we are looking at is as we go into more and more systems and DCPPs. Right? Okay? You will actually have long tail building in of business. Okay? You will have AMCs, etcetera, which will kick in, upgrade cycles which will kick in. So we have to look at the profitability across the product life rather than the initial margin. So, you know, there might be a trade off between the order size and initial margin, but overall, we expect it to be, you know, healthy...

30:38 Healthier, if not as healthy as the current business, at least. That's how we would like to interest it. Got it, sir. Thank you so much. That's it from me. Thank you. Thanks. Thank you. The next question is from the line of from ICICRO Securities. Please go ahead. Good morning, sir, and thank you for the opportunity. Sir, your five to six year guidance, if I just chalk out the the revenue plan, then we would cumulatively would execute somewhere around 17,000 to 18,000 crore. While on the order booking perspective, we have given 8,000 to 9,000 crore kind of the roadmap visibility. So could you give us any other bigger orders chunk which we are expecting to receive in FY 2028, 2029, which would get executed in 3031?

31:34 If you could give us some idea about the thing. Because I think there's some confusion there. I don't think we are executing $1,813,000 crores. The order book, which we are talking about, which we will take in over the next... Or which builds up over the next three to four years is to be executed over the next five to six years. So around 9,000 to 10,000 crores... $8.08 to 10,000 crores, if we take a range, right, is what we are looking to execute. Right? So the idea is that when we... Let's say, I... Don't hold me to the years plus minus one. Let's say if you're talking of f y thirty one. Right? And let's say we are doing a revenue of $350,000,000, $400,000,000. Okay?

32:20 At that point in time, we need to make sure that we have enough irons in the fire to do $600,000,000 to a billion dollars. You know? That part has to be chopped out by that time. We see... You know, we are fairly optimistic, honestly, guys, that given the kind of depth of engineering talent we have and the ability now to work with others and create solutions building on our core capabilities. We should be in a position to kind of, you know, aim much higher. But in terms of... Even when we broke up the order visibility, we just gave you the current order book. Okay? And, obviously, we did not add in over there the annual incremental orders which we will get, okay, from our regular business. And we added three more programs, QSM, ARC, and two thirties to give you...

33:21 To reach the number of 8,000 to 10... 9,010 thousand crores. Okay? Obviously, they... We are expecting much more. The regular business which we do, that also should be kicking in. But from an estimate point of view, Astra would rather be conservative. Right? As it unfolds, let it be a positive surprise, right, for you. But those are the kind of numbers we are comfortable sharing at this point in time. Notice, sir, my calculations will basically come in from that our guidance was $13.50 crore this year, then 1,600. And within by FY thirty two, if you wanted to have even a five x growth, would have been 5,500 plus crore. So cumulative execution is not about the single year. Cumulative execution would have been to that tune of INR 18,000 crores, out of which four plus another INR 5,000 crores, 6,000 guidance we've we So just to add back in this, what is the average annual repeat orders, which you just said that you would continue to receive from the existing customer? Any numbers you can assign? Henry, you want to take that?

34:31 I think that there's some confusion. Yeah. I'm I'm not still getting the 17. Probably what we can do is maybe I think we'll give you more clarity in one to one. I think I don't know how you arrived at that particular figure of cumulative 17,000. Even if we add all these things, it won't cost more than INR 10,000 crores. So anyway, I think probably we will have a we'll give you more clarity in one to one discussions. Noted, sir. Sir, second aspect to the exports, you just said that you have pointed out that you are fairly competitive versus global class. Our export segment had not been growing. So any lighter you want to throw? Yeah. We we did not have anything to... We did not have any solutions to export.

35:21 It is only now that we have built products, which are... Which can stand in in the market along... You know, neck to neck with others. So We did offset business, so called exports, which was not really exports. It was deemed exports. As an execution of this platform? Yeah. Sorry. Amir, what are you saying? Yes, yes. Actually, let me just clarify both on the export front. As you know, like we started up our export only on the BTP front, fulfilling the offset obligation that over a period of last about a few years. And subsequently, like we since offset guidance have been changed and also our business model, we have changed and we came out of that BTP business. We focus more on the BTS.

36:25 So we have a couple of orders on the BTS front from a couple of players that which we have executed also and given some prototypes for qualification and all, which takes time. And then apart from that, on the MMACs, that is on the components front, yes, we have been pursuing it aggressively now. And we are getting good leads from U. S. And other European countries. Probably, it may take at least another couple of years to get the sizable orders for the our components, which we have been doing it. So these are all some of the things which we have been focusing. And apart from that, as Assim had mentioned, the solutions what we worked out, they put complete solutions, which we wanted to prove it in for the Indian defense first. And there, after that, we will start looking at the export.

37:14 As in when we approach many OEMs and also services in the foreign countries, they've been asking us to provide a comprehensive solution, which includes other sensors apart from the radar what we have been doing it. So that is the reason we have been focusing on the overall solution too, so that we can go to the customer with the complete solution. So that may take about a year or two to reach that particular stage. Noted, sir. Noted. That's all from my side. Thank you. The next question is from the line of Preeti Chai from Motilal Oswal. Please go ahead. Yes. Hi. Am I audible?

38:00 Yes. Yes, Praedy. So thank you for the opportunity, sir. So you have painted a very clear picture on the defense side, like what the opportunities are going ahead and what kind of execution you're expecting. Can you shed some more light on the, basically, your satellite business and also metrology business? Because metrology, the project MORCM mission project MORCM is going on and what kind of Doppler radar are we expecting there? And also on the satellite part, we were building our own sat... Satellite. So any updates on that part as well? We'll we'll like to do this in a structured manner over the next few quarters. Right, if you will allow us that luxury. But to... Suffice to say that we are building our own satellite, which should be launched within the first six months of the new entity being listed.

38:56 It is focused not on optics, but on, you know, some other use cases. We will be launching... It's a part of a constellation of satellites, which as I will be launching. There is... There are multiple product lines which are being looked at, including being part of global supply chains for LEO satellites. But we will like to shed more light on it in a structured manner as we go along, please. On the On the on On On the other one, sir. We'll combine it together. No. And we'll combine it together. Anyway Yeah. Unless you wanna give a over... Overview. Yeah. Please go ahead. Yeah. Let me throw some light on Doppler weather radar, which he was asking.

39:42 So, as you know, when we are the first Indian company to develop this Doppler weather radar in India to be supplied to IMD and having got it commissioned. And we have supplied more than 45 numbers of Doppler weather radars in various frequency band. Almost we are covered in every frequency band in last four years, and we have been supplying. We have orders on hand, which have to be executable for the next two financial years. And apart from that, under Mission Mosom, we expect more orders in the current financial year, which probably we may go for execution another two, three to four years. So we have a visibility to continue this particular production for next four to five years to make sure that we will maintain that in leadership. We set up the good infrastructure and as well as the resources.

40:42 And as Mr. Adi mentioned, we wanted to go for a special focus NDTA as such, so that we will have more focus to develop new products in this particular segment. So our focus is on the metrology and as well as in the hydrology segment, and we are coming out with the new products, I mean, very soon. Got it, sir. Thank you so much. Clarify here. Yes. Yes. Yes. Very helpful, sir. And, sir, one more question on the UAV part that we are building up. What is the scope of work that will be built in house by Astra? Like, I know, like, for the software, we have the inbuilt capabilities. But for the hard kill, like, the... Or the laser system, will that be procured or supplied by the customer itself?

41:31 Yes. We are looking at two parts to it. One is the guns. Right? We are not in the guns business. So we will leave it to the client to mount whatever guns they want onto the system, number one. Number two, there is a interceptor drone capability which is being built in. Okay? It is... We are working on it actually as we speak. And so it will be a dual kind of a thing. But the whole structure is modular, which means, primarily, that my radars and detectors should be able to give you the direction, the speed of the incoming, the velocity, the lat long, and align the inner... The counter kill measure in the direction for the decision to be made to deploy it. Okay?

42:26 So it be the directed energy weapon. We are not making one, by the way. So it's a leaner, if you remember our lead strategy, lean and learn. Right? So we will be procuring a few countermeasures. Right? If the client wants, you know, directed energy weapon, we take that and we put it out there. You know? But we will give the client the ability to mount whatever Article solution they want on that. Got it, sir. And it's one more question if I can squeeze in. What are the key projects that we are expecting to execute in FY twenty twenty seven? Yes. Few contracts what we have in development contracts like in Rada segment, Hyjal and Suzati, we'll fortunately use there are a few other subsystems.

43:22 And also some of the subsystems were well, especially the FOPM orders, whatever we have received in the last quarter, there, we are planning to execute before March for the QSM. Apart from that, there are other subsystems like and those are all will be executed. So most of them are in production in nature. We don't see any major challenges to execute this. In EW front also, we have few orders for the existing programs of Bell Hyderabad. All those orders also can be executed in this current financial year. And in Space, we have a plan to execute around INR 100 crores, which we have orders from DRDO a few years back, that will be executed in the next quarter.

44:09 Similarly, metrology, we have Doppler weather radars on hand as this order also. Few numbers will be executed by before March. So these are all few projects which we can complete it before March 27. Got it, sir. And Sorry, one last question. What can the working capital cycle be like, like we saw it coming down sequentially in this quarter? So for the full year, since most of the orders which are being executed can be on the FOBM side, can we expect working capital to moderate even like come down even a bit more than FY 'twenty six? No, I don't think so. I think normally, the Q1 and part of Q2, generally, the working capital cycle looks much better because of the comfort being derived from the execution made in the previous financial year.

45:05 As we move forward in Q3 and Q4, again, the pressure builds up on working capital. Therefore, I'm not expecting any significant change in the working capital position as compared with the previous year. More or less, we may be in the same position. But let let let us wait and see probably on end of q three, we should be able to give more clear update on that. Got it, sir. Thank you so much, sir, for that. I would like the opportunity to reiterate our fundamentals which are driving us, you know, few things. Till we have a crit... Accretive, nonorganic opportunities, we will not value for working capital. We are fairly comfortable on that part, This goes on to increase our return on equity, which is already...

45:57 Has moved up substantially. And as executions happen, we'll move up even better. And more importantly, the operate positive operating cash flow, which was our focus and has been achieved. You know, as as we scale up, you will see nice numbers kicking in on operating cash flow basis. So I think this is sovereign debt. We don't believe that we should be diluting for any working capital requirements. You know, just answering a few questions which we have received from others also. So we believe equity is to be respected and is a, you know, very expensive form of capital. Got it, sir. Thank you. Thank you so much for the opportunity, and all the very best for future. Thank you. Thank you.

46:44 Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Tippein Wakil from Philip Capital. Please go ahead. Congratulations on decent execution and margin. So my first question is on the lines of your current order book. So you mentioned that your current order book is close to around 2,850 crores. So what would be the likely of the order book in terms of how much are the short cycle orders in it, which are executable in the next one to two years and longer than that? And the follow-up to that would be that what would be the tune of short cycle order inflows that you expect annually over the next one to two years?

47:33 Yeah. See, we we have given the the guidance for the current year, as mentioned, about INR $13.50 crores. And then we are expecting another 15% to 18% growth for the next year. So the orders, whatever we have in order book today, we think more or less, like the executable next two financial years, except the one which, in fact, we got that good term, which need to be executed in four to five years. Otherwise, most of the orders, whatever we have, they are basically will come for execution in next two years. Got it, sir. So any annually short cycle orders that you expect, say, something on on a regular nature, may...

48:25 Maybe it is on the services side, something on annual quantum? Generally, for us, the short cycle orders are very limited. So it is very difficult to now quantify how much of that is going to be, but it all depends. Got it. So second question is, if you can give us a slightly elongated commentary on your L1 for AAAU for AMCA program as to what would be the quantum of it and what kind of opportunity can we expect in the AMCA program? Yes. This is basically a development program as probably you're aware that ADA, they have given this development of ADA to DRDO, LRD.

49:16 And that the AAU portion of that been they came out of tender. So we and the other company, well, we both of us, we emerged as L1 and L2, and we will be getting this order for like the way we got the order for Utham AAU, similar the same way we have participated for development of active antenna array unit for MCA order. As far as the size is concerned, as you know, the numbers are already available in this site, what are the number of MCA quantity, which government is looking for. So that anyway as a lead, it has TCPP, this RFP is already out. I think they have shortlisted three consortium partners.

50:03 So those are with the particular bid and they will be taking this order, this radar from the radar designated production agency. So, we will be part of the supply chain. We don't know the numbers, guys. We don't know the numbers. You know, that you have to ask AD and EMCA guys. Noted, sir. Thank you so much, and all the best. You. Thank you. The next question is from the line of Mehul from Cavia Advisors. Please go ahead. Hi. Just wanted to understand any guidance on the full year EBITDA margins, do you expect to maintain what you did last fiscal?

50:53 And also wanted to understand, secondly, on the space sort of the business, out of the INR $13.50 crores, how much would come from that sector? Actually, didn't get you the first part of your question. The second part, I can answer. Out of INR $13.50 crores of projected sales for this financial year, I would say close to about and INR 1 crores to 150 crores is going to be from the space sector. Right. My question was more on the EBITDA margin guidance. Would your margins be similar to last year? Or is there any room for improvement? Definitely, definitely, the margins are going to be similar to last year.

51:47 You can expect a delta increase in that, a positive increase in that margins. Got it. And just wanted to understand since the space business will be demerged, What sort of plans do we see in that part of the business and opportunities which will come up, maybe you did not have so far? Space will detail it out in the next few quarters... Over the next few quarters in terms of what specific areas we'll be looking at. Our intention is to create substantial value addition for our shareholders from space and weather division combined as a separate entity. So you'll be getting in an absolutely rock bottom in my opinion, you know, for a sector which is looking quite promising.

52:47 Okay? Suffice to say, we are not gonna be banking on domestic business alone, but we will be looking at participating on a slightly larger scale, global scales. As and when they are finalized, we'll share it with you. Still So that business has a to nine months of it. Once... So that business will have a run date of about $1.50 crores as we speak. Right? Possibly. May... More more more than that. Combined. More than that. So I think I'm on record I think I'm on record, so no point... So no harm in repeating it. Our first year guidance for the space business should be in the range of 300 space entity as a standalone entity, space and weather, should be in the range of 300 plus crores with at least 18 to 20% PBT margin.

53:40 So it'll be a profitable entity right on day one with its own cash flows and everything. But we'll detail it out, please, in the next few quarters. Lot of things are being finalized as we speak. Our focus is right now on the personnel. You know, as I said, people are the most important assets in Astra. And right now, you you... I hope you understand and appreciate how difficult or how difficult task it is with all of us here to kind of make sure that everything happens in a smoothest possible manner. The facilities are being demurred, stand alone. The people have been identified, put across into, you know, different segments, different buckets, and accounting. And as you have... Has ensured that accounting has been happening on a stand alone basis right from the beginning of the year. So for us, it is extremely simple now. You know, we we done... We just completed migration to SAP HANA and congratulations is you for that and successfully.

54:49 And, you know, to do all these things without disruption to the existing business is a fairly dedicated task. So we focus on that and then subsequently everything else will flow. But we hope that this business itself will be as value creating for us for shareholders as Astra has been. So, sir, this last one, you said 13, 15 Sorry to interrupt, mister Mitone. Maybe, Ramesh, return to the question queue for a follow-up question. Thank you. The next question is from the line of Abhijit Singh from Systematics Group. Please go ahead. Hello. Am I audible? Yes, please. Sir, first question is, what is our capabilities and product offerings in the BrahMos program?

55:39 There has been significant interest coming in from exports, you know, from different geographies in the Southeast. And I I understand that we have been developing seekers, the RF seekers from the Ramos program. So apart from that... Apart from seekers, in totality, if you can answer in terms of both development and production, where are we in that? What all do we supply? And going forward, what is the plan on that program? Yes. The existing BrahMos missiles, we are there as a part of supply chain for the Jimbal based RF seekers. In that, we are supplying a critical RF component to the OEM.

56:25 Apart from that, we also supply telemetry products to BrahMos missiles. And also, we have taken up a proactive development for BrahMos new generation, that NG missile. There, think that Seeker, whatever we have taken it up, it is in the development stage, may take another few months for us to complete that and then go for testing and qualification. So we this is what we have been focusing as far as the BrahMos message is concerned. Understood, sir. And sir, have you factored in the BrahMos whatever development we are doing in the order inflow that Only we have existing orders that whatever the development we have completed and which we have been producing those numbers only we have factored.

57:15 But otherwise, the new program, which we are working out on the NCNCR, maybe on the proactive development, those numbers, we have not taken into account. Right. So sir, is there a possibility of upward surprise on this? Because that program promises to be significant possibly. Yes, yes. Yes. There's a possibility. Right. And lastly, revenue declined this quarter. I mean, logically, I would assume that there could be some kind of shipping issues at the end of the quarter, and we might be sitting on a larger finished good inventory. So is there a deferred revenue situation in Q1? And if it is, yes, how much is the quantum?

58:03 As we mentioned in the opening remarks, there are a few programs which we plan to book sales in the first quarter, but because of some inspection issues and there was a delay in from our side in the sense to prove these specifications. So there were a few issues in the development cycle. And also, there were some supply chain issues. So there are coupled with all this, we missed out to execute these few programs in the first quarter, but we will be able to cover it up, I think, in coming quarters. Mostly like in Q3 and Q4, we will have a good execution as we have almost received all the material for those 0.5. And also the development projects are in the final stage of clearance. So I think next coming quarters will get promising.

58:55 And more on, whatever the guidance we have given in the beginning of the year that I think we are confident to meet that. But, gentlemen, I must add here that we don't... We... You know, our quarterly numbers are our internal numbers, which we are constantly fine tuning. And since we don't even break them out and we only give you the yearly numbers. Right? So whatever estimate you feel like, you know, please make the estimates. But we know what we have to achieve at the end of the year, and that's the guidance we are working on. You know? So we don't... You know, like other companies which have told everybody, which are, you know, which are very clearly spelled out, this business is not a quarterly driven business. Right? There are so many things which lead into this particular program. Right?

59:46 Which lead to leads to revenue realization that, you know, yearly targets are the ones which we which we focus on. Okay? So I don't know what is the basis, but, you know, at the end of the year, we will deliver what we say we are looking to deliver. That's what drives us. Very helpful, sir. We'll get back in queue. Thank you, Rajesh. Thank you. Thank you. The next question is from the line of Shairam Kapoor from Jefferies. Please go ahead. Hi, sir. Thanks for the opportunity. My question is on some of the guidance that you've given for the next five years, talking about six to 7x revenues versus FY 'twenty six.

1:00:34 Apologies if I might have missed this earlier, but is this purely on the defense side? Like are you guiding for this ex of the space and meteorology business that's going to be spun off? Just want to understand the guidance that you're giving going ahead even on all the orders and and and, you know, a few quarters back, you had given some guidance on what the sales could be in FY 2930 as well as INR 2,000, INR 2,000 crores. Is that all purely going to be in the defense company? Does that include your space business as well? Actually, I... We broke it up into constituent parts of the same thing. Right? So barring the next two years, there's nothing from space. So the space portion is only reflected in the existing 4,300 crores that we spoke about, okay, the current order book.

1:01:27 And the recurring business which will come in, but we... Which we did not take into account here in this calculation of 8 to 10,000. Okay? So mostly, it is defense side that we are talking about. Space, we'll address as and when we get along, separate it out. You know? Right. So that's six to seven x in the next five years. That will be six to seven x of your FY twenty six defense sales. Is that is that on... Is that understanding broadly correct? See, guys, right now, when we talk of Astra, we are talking of Astra as a unified company. Right? Okay. The separation has still not happened. So till the time it happens, we are talking of a combined business. So when we talk about, let's say, thousand 57, which was the revenue last year, okay, that is both actually come... Is the... Is both the companies combined. Right?

1:02:24 So when we are talking of an order book to the tune of 8 to 10,000 crores order intake over three to four years, we are talking of multiples of the combined one zero five seven entity. And so similarly, execution is based on the historical number of one zero five seven. One zero... Which was, I guess, which took thirty three years in the making. Alright? And now this is the growth phase which we are expecting. Right, sir. That's clear. And just secondly, on your... The... Just to ask about your space and meteorology business. So would it be fair to look at, you know, the business as a function of the kind of, you know, capital investments that the government is making in the space and meteorology? Is that...

1:03:09 Or are there any opportunities beyond, you know, government programs that we are looking at in this business? Just wanna understand We will. Currently as well as from a future point of view. Yeah. So our current business is focused solely on the government of India programs. Going forward, we will be... We are... As I said, within the first six months of the of the space business coming on its own, we would be launching our own satellite, which will be a part of a consortium of satellites. Okay? So there is a data monetization business, which is substantial. If you think about that, when we talk of data being the new gold or all the so called talk which used to happen, right, it has been so far confined to our personal databases, financial sector, etcetera, etcetera.

1:03:58 Right? It is now space where the inflection point has come, where space will be able to get industrial grade, industrial sized databases and ability to process that into tangible defined outcomes. We hope to play on that. And thirdly, we are... We want to be... We desire to be a part of the international supply chain. But we'll detail all these things out probably two quarters down the line, you know, as we finalize our numbers and are much more certain of what we are doing. We hope to come to you with something real tangible. You know, when we speak to you, we try and keep it... We try and keep our conversations to what is actually in the bag and highly visible with limited scope for error. That's exactly what we want to do for space also. So all these multiple strategies shall tie in together, but it's gonna be much beyond government of India programs, hopefully.

1:05:01 Understood, sir. If I could just squeeze in on your meteorology business. So of course, the last couple of years, we've seen a sharp scale up even on the government and with Mission Morsum coming through. And there's been a ramp up in the budget as well for FY 'twenty seven driven by Mission Mausam. How long do we expect this to continue? Are we going to sort of see FY '28 onwards that kind of start to trend downwards again? Or is there is this a sustainable program where this level of CapEx by the government could sustain for the next few years and drive the overall cost. About our opinion, and we actually were discussing amongst the few of our directors the other day. We... Somebody... One of our directors drove down from Haridwar. Okay?

1:05:48 And the kind of situation which exist on the roads, right, okay, where, you know, some... People are cut off. Right? Okay? Because of landslides, because of, you know, extreme weather and extreme rains and climate change, you know, you have to be a believer in that if we are believers. Right? So given all these things combined, I think, you know, there there should be and there ought to be and from indications are there will be sustained focus on meteorological budgets. So we hope to capitalize on that. So just to add to what Tim, what he had mentioned is basically apart from doppler weather radar, we also are trying to develop new radars in this particular segment like avalanche radar And weather forecasting applications we are trying to enhance as to provide a complete solution.

1:06:51 So our journey is on and while addressing this requirement of IMD, we are trying to provide a complete solution on the weather platform. And that probably we will get ready by next year or two years. That means demand will be there for next eight to ten years. Understood, sir. Thank you so much and all the best. Thank you. Thank you. Ladies and gentlemen, due to time constraints, we take that as the last question of the day. And now, I would like to hand over the conference to the management for closing comments. Yes, thank you and thank you all for being part of the discussions.

1:07:37 I also would like to share with all of you, this is my last interaction with you as a Managing Director of the company. I am passing on the baton to Mr. Amiredi and Atim for more energetic earning. I am sure that they will be able to deliver much more than what has happened in the last couple of years. As you have created a legacy you have created a legacy. Right? Okay? And I think it's gonna be... You leave us, you know, with a very strong footing, and we hope to live up to your expectation. And, seriously, thank you for everything. You know? Thank you. Thank you. Okay. Thank you. Thank you, guys. Thank you. Thank you. On behalf of Astra Microwave Products Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.