Astra Microwave Products Limited ($532493)

Ladies and gentlemen, good day, and welcome to the Astra Microwave Products Limited Q4 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. S.G. Reddy, Managing Director. Thank you, and over to you, sir.

Thank you, and good morning to everyone, and a warm welcome to all the participants for the post earnings call of our company. I'm joined today by my colleagues, Mr. M.V. Reddy and Atim Kabra, and SGA, our Investor Relations advisers. The financial results and investor presentation for Q4 and FY '26 have already been uploaded on the company's website and the stock exchanges. I hope you had an opportunity to review them. Let me begin with an overview of the industry outlook. The environment for the defense industry continues to remain highly supportive for the domestic players. The government's strong focus on indigenization is creating significant opportunities for private sector participation with nearly 75% of India's defense capital acquisition budget now allocated towards domestic companies. The long-term defense manufacturing cycle also remains robust, supported by accelerating government procurement momentum and increasing localization across critical defense programs. Indigenization is creating a structural opportunity for Indian companies, particularly in defense electronics, drones and aerospace, which continues to be among the fastest-growing segments within the industry. India's defense exports have also gained strong momentum, exceeding approximately INR 38,000 crores in FY '26 and continuing to grow steadily. At the same time, global supply chain diversification and rising defense spending across various regions are generating additional opportunities for Indian defense electronics and subsystem manufacturers like Astra. Order book across the industry remains at historical high levels, providing strong long-term visibility. We expect the FY '27 and FY '28 to witness stronger execution and improved revenue conversion across the sectors. Overall, the defense sector is steadily transitioning into a sustained execution and manufacturing scale-up story. We believe the company is well positioned to benefit from these industry trends. To sum up, FY '26 has been a year of steady, delivering strong execution and important strategic initiatives aimed at building long-term growth for the company. Some of the financial performance highlights for the year, I would like to announce here. For FY '26 has been another strong year for the company, characterized by consistent growth, effective execution, margin expansion, driven by favorable revenue mix and improved working capital cycle, resulting in operating cash flow of INR 370 crores compared to minus INR 99 crores as of last year. This is a very significant improvement, and we expect to maintain the trend. On a both stand-alone and consolidated basis, we have delivered strong growth across all key financial parameters. Detailed information, including growth percentages and Q-on-Q or year-on-year comparisons have already been shared through our stock exchange filings and investor presentation, and I request you to kindly refer to these documents for more information. The Board has recommended a dividend of INR 2.40 per equity share, that is about 120% of face value for the year '25, '26, subject to approval of shareholders at the ensuing Annual General Meeting. We also witnessed steady progress in our joint venture company, Astra Rafael Comsys. The JV closed the financial year FY '26 with an order book of about INR 625 crores and continue to receive significant orders from PSUs and the Ministry of Defense. It is expected to deliver a top line of over INR 600 crores in FY '27. Although the profitability during the year was impacted due to ForEx-related provisions, we expect improved profitability in the coming year. Our other wholly owned subsidiaries have also performed well while continuing to support captive business requirements. Further, we continue to see robust opportunities across all 3 product segments in the defense market and therefore, reaffirm our FY '27 top line growth at 15% to 20% rate with a potential for much stronger growth over the coming years. We continue to proactively invest in the development of products and solutions for various defense applications which is reflected in our increased R&D expenditure on a year-on-year basis. These investments are expected to translate into significant business opportunities over the medium to long term and help us to achieve important milestones in revenue and profitability as we move forward. Other key business development happened during the year. On a strategic front, the Board of Directors have in principle approved demerger of our space, meteorology and hydrology business. The objective of this move is to create sharper strategic and operational focus for business segments. The proposed structure will enable dedicated management teams to pursue sector-specific growth opportunities enhance governance and accountability, simplify the corporate structure and create clearer investment propositions to the shareholders. Furthermore, this restructuring will position us to capitalize on emerging opportunities, both in India and globally. Over the medium to long term, we believe this initiative will support focused growth, better capital allocation and improved operational efficiency. We'll share the detailed scheme of demerger once it is formally approved by the Board, which is expected over the next few weeks. I will now hand over to call to Mr. M.V. Reddy and Atim Kabra, who will provide more further insights into the new product developments, business outlook across near and long term and the strategies being adopted to take the company to its next phase of growth. Thank you for now.

Good morning, everyone. This is M.V. Reddy, Joint Managing Director, and thank you for joining us today. I'm pleased to share that FY '26 has been another strong year for our company. As mentioned, we achieved turnover of INR 1,157 crores, delivering at par with the guidance given in the beginning of the year that shows the strength of the technology portfolio and execution capabilities. Our radar business continued to be a primary growth driver, contributing nearly 60% of our revenue, while space and meteorology segment contributed around 16%, demonstrating our expanding footprint in strategic and high-technology domains. In Q4 alone, we secured fresh orders worth of approximately INR 530 crores, taking our total order book to robust INR 2,141 crores as on 31st March and concluded P&C of INR 300 crores more orders, which are expected to be received in the next couple of months. Key orders received during the quarter, which is in Q4, including SDR programs, subsystems of various radar projects from BEL and the checkout hardware for prestigious Gaganyaan mission from ISRO. I'm also proud to share that we have successfully completed all our related works in shipborne radar, which we took about a couple of years back and hand over the systems to DRDO for final testing. This marks the successful delivery of one of the nation's most strategic and technologically advanced defense program during this financial year, further reinforcing our capabilities in complex mission-critical systems. Additionally, we have successfully delivered critical subsystems for one of the nation's unique and strategic defense space program, showcasing our growing technological strength and contribution towards the Indian strategic space capabilities. We also continue to strengthen our future growth pipeline through proprietary products, particularly in MMIC technologies. On the execution front, we have achieved Q4 billing of INR 490 crores, reflecting a strong 16% year-on-year growth. Major programs executed during the quarter included subsystems of radar, EW and satellite programs and Doppler Weather Radar for IMD. Going forward, we have clear visibility of approximately INR 1,600 crores plus orders which can be booked in the current year, that is FY '27. Around 25% of this is expected to come from R&D programs, while balance are basically driven by the production orders. Segment-wise, radar is -- again, radar segment is expected to contribute around 45% electronic warfare and missile together around 25% space and meteorology is around 25% and the remaining others from strategic business areas. So this provides us a strong confidence in sustaining our growth momentum and improving scale in the coming years. Regarding execution front, we have planned to book sales of INR 1,300 crores to INR 1,400 crores, that is around 15% to 20% growth as compared to FY '26, covering 40% of R&D and 60% from the production area. As far as JVC concerned, it was a fabulous year for ARC. It surpassed the guidance. We booked orders worth of INR 546 crores in the last year, that is FY '26 and sale of INR 360 crores. Going forward, in FY '27, we expect ARC to outperform, and we expect the minimum growth of 50%, both in terms of order booking and as well as sales. As on date, we have visibility of INR 1,200 crores order book in FY '27 for ARC and also expected to cross INR 600 crores sales. Looking ahead, the outlook in Indian defense and strategic electronics sector remains highly promising. With the government's strong push towards indigenous defense manufacturing and self reliance, we are confident that the company is well positioned to sustain its growth trajectory and create long-term value for the stakeholders. That's all from my side. I would be happy to answer your questions. Now I'll hand over to Mr. Atim Kabra, Director, Business Development Strategy. Over to you, Atim.

Hi. Good morning, everybody. And first and foremost, my gratitude to SGR, MVR and the entire Astra team for delivering a strong set of numbers. Performance is never accidental. It is an outcome of discipline, persistence and clarity of purpose. And I think that is what is visible here. At Astra, we have always believed in a simple method, speak less, think long term and deliver on what we promise. We are trying every single day to live up to that philosophy. There are 2 other principles which guide us deeply. The first, the only constant in life is change. In technology and defense, standing still is equivalent to moving backwards. You have to keep running simply to retain your position. The second principle comes from Andy Grove, Intel, Only the Paranoid Survive, and we take that quite seriously. Healthy paranoia keeps organizations humble, agile and hungry. It prevents complacency and it forces reinvention. And these principles, combined with our long-term orientation, define Astra's strategic DNA. Over the last few years, we have consistently spoken about 3 priorities: enhancement of or enhancement on our return on equity; second, relentless focus on achieving a positive operating cash flow generation capability; and third, creation of operating leverage. And I'm happy to say that Astra team has delivered meaningfully on all 3 fronts. And we think this is only the beginning of good things. As operating leverage kicks in increasingly, we believe that Astra story will become significantly stronger over the next 5 years, which is the outlook which we had presented to you last quarter. Whether it takes 5 years, 4.5 or 5.5 years is less important than the direction of travel. Our trajectory is clear and our intent unwavering. We believe that Astra is structurally positioned to nearly triple its turnover over this period, while simultaneously improving the quality of earnings, cash generation and long-term shareholder value creation. Importantly, I think we have discussed this multiple times that we do not run this company for quarterly applause. Quarterly numbers are outcomes, but not our identity because we see ourselves as custodians of long-term interest of more than 100,000 shareholders who have placed their trust in us with our objective being to build a sustainable, technologically relevant cash flow-focused enterprise that can compound value predictably over decades. So today, while we are on track on these parameters, I also want to redefine how Astra should be viewed. Surprisingly, our website still describes us as a Tier 2 subsystem supplier. But I'm glad to tell you that, that description is now outdated. We have, in reality, evolved from a component manufacturer to a deeply integrated IP-driven systems manufacturer to now becoming a development cum production partner for strategic national programs. I'll repeat. We are now a deeply integrated IP-driven systems manufacturer and a DCPP for a critical national program. And beyond that lies what I would call the holy grail, where Astra-owned intellectual property, Astra-branded products and Astra-led solutions for India and the global markets are going to be created and sold. And that future, I'm glad to say, is visible now. This financial year itself, hopefully, before Diwali, you will have multiple Astra products, which are where we own the complete IP. They are our branded products and solutions for global markets, India first, global markets. So our roots, as many of you know, were in telecom, especially antenna design and manufacturing. And because of the heritage and technical depth of our founders, we gradually became trusted partners to India's defense labs. Over 3 decades, we built extraordinary horizontally technological depth across multiple domains. In fact, one of our ongoing internal exercises is to catalog the sheer number of indigenous programs and products whose development journey Astra has contributed to over the years. And the breadth is so extensive that even today, we are still uncovering the full extent of our own technological footprint. Ironically, it sounds stupid that we can't do that. But this very well may be Astra's greatest hidden strength in a world where technologies, threats and platforms evolve rapidly. This horizontal capability stack creates resilience, adaptability and staying power. And more importantly, it forms a moat which is difficult to replicate. So we are not building merely for the next quarter or the next order cycle, but for the next 3 to 5 decades. We've been around for 3 decades. And that is the lens through which we allocate capital, build capabilities and take strategic bets. You are very well aware, we have touched upon this that MMIC was -- MMIC division itself was created in 2005. And that chip design capability has become one of Astra's most important competitive advantages, which strengthens our technological independence and complements the horizontal breadth, which we have built over decades. So where do we stand in the defense value chain? Yes, we manufacture components. Yes, we build subsystems ranging from advanced multilayer PCBs to MMIC chips and highly sophisticated RF building blocks. But equally important is the fact that we design, integrate and deliver complete systems. We are very much a Tier 1 systems company. I don't say this lightly because I'm going to rattle off a few complete systems which Astra has delivered. Mobile multi-object tracking radar to SHAR and ISRO, complete. phased array telemetry, that's PATM system to ITR and DRDO, fixed-head Doppler radars to ITR, DRDO, radiation mode T&E facility to same to DLRL and DRDO. We have delivered PPTR, which is so important to PSC and DRDO, multifunctional pulse compression radars for SHAR and ISRO. We have delivered FMCW and MFCW-based short range and medium range tracking complete radars to ITR, DRDOs. These are systems, complete systems which have been delivered. Military radars, we have delivered ground-based surveillance radar systems. We have delivered active antenna array units for long-range multifunction radars. And I still don't call this a system, but a subsystem probably. But Drishti counter drone radar, we call it D4 radar. We are developing and in the next few months, you will hear much more about it, low-level lightweight radar and bird detection and monitoring radar, complete system. On weather radars, as MVR had alluded, we have delivered satellite earth stations. We have delivered complete XC and S-band Doppler radars, L and US UHF-based pin profiler radars. I can go on. But I think these are end client delivery of complete systems, which have been done by Astra, Tier 1 and systems manufacturing. So this is not aspirational anymore, but it is based on execution. We do not hesitate to share design parameters and technical details with our customers because we stand behind our engineering capabilities with confidence and transparency. But this is what establishes Astra not nearly as a supplier, but as a trusted indigenous technology partner. If you speak to our customers, you will hear the same sentiment that we feel internally, a quiet sense of pride, but pride tempered with humility in what persistent engineering effort and long-term commitment have enabled the Astra team to deliver. So this evolution continues. Having established ourselves as a systems manufacturer, we are now proud to participate in the next phase of value addition as a DCPP for a major Su-30 Electronics Warfare Upgrade Program, which is in development. This marks a strategic transition upward in the value chain from participation to ownership, from execution to influence and then the final frontier, the Holy Grail, Astra owned Astra branded IP-led products and solutions. Before Diwali, there will be multiple Astra products, Astra branded, where a complete IP is with Astra, and we can compete in the rest of the world, which will be hitting the market. These are solutions which we intend to offer not only to Indian armed forces, but eventually to the global markets. And our first NCNC demo is planned within this quarter. And God willing, that will mark the beginning of an entirely new chapter in Astra's history. So let me make one point very, very clear. The work underway today has the potential to position Astra in the immediate coming decade to more than $0.5 billion revenue enterprise and potentially much larger thereafter. And we do not make such statements lightly. What we have said we deliver. In fact, the entire tripling of our turnover that we spoke about in the 4.5, 5.5-year time frame is based on just 5 to 6 programs, and the rest is not even included in the numbers. So what I would tell our long-term investors even more is this, that not a single rupee from these future proprietary IP-led opportunities has been factored into our near threefold growth aspiration over the next 5 years. Everything beyond remains potential upside, contingent, of course, on successful execution. And it means that our stated growth path is grounded not in optimism, but in visible execution pipelines and existing business momentum. And that distinction is extremely important. We want you to focus not only on our narrative, but also on delivery. So therefore, our focus is unchanged, technology depth, capital discipline, cash flow generation, customer trust and long-term value creation. With this, I'm sure many of you have questions for SGR, particularly around sustainability of margins, cash flows and scalability. So let's open the door for discussion.

[Operator Instructions] The first question comes from the line of Amit Dixit with Goldman Sachs.

Congratulations for a very strong set of numbers, operating cash flow as well as very nice deck that you have got highlighting quite a few details. I have a couple of questions. The first one is essentially, if I look at EBITDA margin for the quarter, again, I mean, not looking at the quarter per se, but if I look at the overall trajectory of EBITDA margin, particularly, I mean, it is like almost 33.3% for this quarter. And space revenue has increased. I understand -- I mean, margins in space can be quite high. Exports has also gone up. And so I just want to understand 2 points over here since we are focusing a bit more on space. And in export as well, if I look at the order inflow, it has remained quite strong. So considering that the space proportion would grow, so do we -- can we expect margin trajectory to strengthen further? And secondly, what are these exports? I mean, traditionally, we had deemed exports, which used to give us lower margin, but I think these are more IP-driven exports or subsystem-driven exports actually. So just wanted to get your thought on these parameters. This is the first question.

Amit?

Yes.

So regarding exports, these are the exports made to our wholly owned subsidiary, ARC. As we mentioned in the previous calls, these exports are different from the earlier offset-based exports, where we are paid only for the conversion cost. Here, actually, these are the things where the RF portion of the SDRs are being co-developed between Rafael and Astra. So because of that, the value add is much higher than the regular exports that were recorded in the previous periods. Therefore, generally, these carry a good amount of value add. I would say the gross margin will be close to about 40% kind of thing in these exports. So that is the reason why there is an improved margin from the export business as such. I think I answered your first question, Amit. What is the next one?

Sir, another part was space because space is going up.

Your other question, Amit, as far as space is concerned, we have delivered subsystems for defense satellite program, which is a very -- I mean, like complex subsystems, which we made in over a period of 1 year that we completed in last quarter, and that has a decent contribution. And we are expecting similar subsystems going forward as the user is planning to go for constellation of those satellites. So this will continue as for the orders, what we are expecting from both ISRO and as well as from the defense side as far as the space business is concerned. And your other question on the deemed export, yes, we -- year-on-year, we are increasing our value addition in the overall contribution like whatever we've been contributing to our JV as well as the company. We are increasing that value addition in Astra and both in the testing front and also in the qualification front. Hence, the margins are also been increasing.

So just as a follow-up, sir, I mean, since you -- ARC outlook is expected to be quite strong and space, as you highlighted that we will be continuing the value addition. So the trajectory of margins, I mean, I'm not asking for a quarter or something, I'm asking a year-on-year kind of trend would continue to strengthen or at least remain at this particular level?

Yes, yes. As far as the ARC is concerned, we have an order book in last quarter, we have booked some crore orders. And this year also, we are expecting close to INR 150 crores kind of orders from the JVC and the value addition will remain same. So going forward, for next 2, 3 years, we have a clear visibility to have a good growth.

The second question...

[ One more ] will be a function of the order mix, which has been delivered, right? So there may be some variations, you have to be acceptable and ready for that.

No, no, that's fine. That's fine. Quite mindful of that factor. The second question is on Sukhoi, and you highlighted in your prepared remarks that on the DCPP role. So there are two parts to it Sukhoi upgrade. One is the radar, the Virupaksha of which we are, of course, the partner. I wanted to understand a bit more on ASPJ pods. Are we doing something over there as well? And is it possible for you to highlight, I mean, broadly a range of business size that we can expect from these upgrades?

Yes. Amit, two things. One is on the radar front. As we mentioned in our last couple of calls, we have been developing AAAU with the DRDO, and we are the part of the Virupaksha program. And the development is going on. We are expecting that our portion to get completed in the next few months. And hopefully, the entire radar will also be completed soon in this year or maybe. As far as the EW is concerned, where [ Pod Jammer ], we are part of that ANGAD program. Again, it's a DRDO program. And we are the DCPP, one of the DCPP -- as you are aware that they have selected two DCPP, we are one among them. And the development program is going on with the DRDO [indiscernible].

The next question comes from the line of Vikash Singh from ICICI Securities.

Sir, just wanted to understand this revenue tripling guidance which we are giving. So do we expect -- what kind of CapEx we need to spend further in order to achieve that or majority of the CapEx are already in place and we just need to invest working capital going forward?

Yes. In terms of the CapEx, as you know, every year, we are augmenting the existing requirements by spending close to about INR 40 crores, INR 50 crores, so that will continue. Therefore, there won't be any additional CapEx beyond this what we are doing normally. Working capital, yes, depending on how the things are going to pan out, there will be working capital requirements. As I mentioned in my call, there is a significant improvement happened in the working capital cycle in the last year by releasing a significant amount of debtors through -- which are being held up for various technical reasons. I would say that the improvement in terms of realization of the receivables will continue. Therefore, though the increased volumes call for higher working capital utilization, we should be able to manage within the sanction limits as of today. Thereby the finance cost and other things are going to be more or less similar to what has been incurred by the company in the current year.

Okay. So the working capital situation would improve further going forward? My second question pertains to our mix of the order book. Given that the space segment order book as a percentage -- year start order book as a percentage has shrunk, how should we look at the overall margin mix basically? Because I understand that probably space is #1 or #2 in terms of our margin profile.

Definitely, the space margins are better compared to even defense also. But when you look at the overall space sales contribution, in the overall sales of the company, it is just around 10% to 15% kind of thing. Therefore, the reduction in the space order book or overall space contribution to the sales of the company should not have any negative impact in terms of the overall margins.

Got it. Sir, can we -- just correct me if I'm wrong, can we assume that given we are transitioning into a better product category going forward, our margins at least should be higher than what we have seen in the historical levels?

The margins delivered by the company in the current year is about 55%, okay? So you are still expecting an improvement over 50%, 55% Look at the industry standards. Yes, as we move forward, definitely, there will be a change in the product mix of the company. But again, it is subjected to various other variables. We feel that we should be doing very well by sustaining the current margins achieved by the company, not only in terms of the gross margin, but also in terms of various profit margins.

And added to that, we -- as mentioned, we -- our business model towards the exports also changed. And if you look at the historical data till FY '24 or so, we largely depend on that BTP business where our value addition was less and margins were very less. And we came out of that, and we are accepting orders only the value addition is more. We are focusing in that. And also, we are focusing on IP-driven products for the export market. That is the reason our margins have been increased in the last couple of years.

Noted, sir. And sir, lastly, if I may add.

But from a guidance perspective, I think we should very clearly say this probably is the top end. You can actually -- you should factor in slightly lower numbers only on the margin front so that there is no disappointment coming in at a later date. This is probably as best as it gets, if I may say.

Just lastly, if I can squeeze in one last question. In terms of our overall dependency on MMIC, so if you could explain that have we seen any problems so far? Or what is the percentage we are able to source in-house domestically versus the import dependency.

If you look at the overall MMIC, as of now, we have not encountered any issue and the production and as well as development is going very smooth. And second thing is, as far as the dependency, like yes, in all our subsystems, we are -- most of the active devices, we are sourcing out from our in-house MMIC division. And also, we have started promoting these MMICs to the domestic players and international players also. So we are strategically looking at that particular business segment to enhance the product range and also to meet the captive consumption and as well as to generate more revenue from the external market.

The next question comes from the line of Sanjeev Zarbade with Antique Stock Broking.

Congratulations on good set of numbers.

Sir, I'm sorry to interrupt, Sanjeev, I would request you to be a little louder, please.

Yes. Sir, in our presentation, we have a slide which gives us total addressable opportunity of around INR 28,000 crores between FY '26 to '28. Since FY '26 has been passed, what kind of -- would you want to change this number in terms of addressable market for us for the next 2 years?

Well, Sanjeev, the total accessible market has remained same, but only there is a shift in the year. As we know, there are many programs got delayed for various reasons as these are all government-driven programs depend on the budget and also depend on the priority, this gets shifted and also a few development activities got delayed at various levels. So the overall accessible market remains. But the only thing is we -- this is FY '28, '29 may go up to '30, '31. So that's the one thing. And we are always focusing on that particular market to maximize our share of the business.

Yes, sir. And my next question is on the new initiatives like in terms of ground penetrating radar and the other developments that we are in the process of making, how are we positioned there?

Yes. ground penetrating radar and all, we have developed it with collaboration with one start-up company. We have work on some trials, and there were a few observations. We have been addressing that. And soon we'll launch that product in time to come and to meet the customer requirement. But we started participating in few tenders.

[Operator Instructions] The next question comes from the line of Vansh Modi with Swan Investments.

I just missed your guidance on revenue. I heard you say that you expect to triple your revenue. Just wanted to know what the timeline would look like and what would be the drivers for this?

We are expecting at least next down the line, 3 to 4 years to triple the revenue and maybe you can say up to FY '30 to '31. So that's something which we are looking based on the orders -- timing of the orders and the finalization of the contracts and all. So that's the one. And second question, what was your question?

What would be the growth drivers for this?

Yes, growth drivers, there are many programs are there, both -- especially in the radar segment, we have seen clear visibility in -- to grow in airborne radar, fire control radar and surveillance and tracking radars and medium-range and long-range radars. So likewise, in radar segment, we have huge opportunities in the industry. Similarly, in the Electronic Warfare segment also, as I've explained just now, we have -- we are there in the DRDO programs for a few of the airborne platforms, which we are DCPP in that. So we are developing that. And once the development and qualification gets completed, we expect production orders to come from the services. And also apart from that, we are part and parcel of BEL major programs like [ Lion Shakti, Himshakti, Shatru Vartama ]. There are so many programs which BEL is integrating. So we are the qualified subsystem supplier for these systems. So that business will continue for next 4 to -- 3 to 4 years. And in the other segment, like in the Missile and Telemetry also, we are in the seekers, some of the active seekers we have developed for a couple of missiles, we are expecting a few orders in the next 2 to 3 years. And in Space segment, we are expecting repeat orders for the -- some of these programs from ISRO and also from the defense satellite. So these are all our growth drivers going forward. And apart from that, as Mr. Atim had mentioned that in meteorology business also, we have developed Doppler Weather Radar, wind profiler radars, which are the production orders are yet to come. So we are -- we already booked a few orders. More orders we are expecting in next 2 to 3 years.

Okay. Just one last question. What is the current order book right now? As you said, you are planning to execute around INR 1,600 crores in FY '27. So just wanted to know what the current order book is right now? That's it.

Yes, we have order book of INR 2,141 crores. This is the order book, stand-alone order book of Astra.

Consolidated goes up to -- consolidated is INR 2,600 crores?

Yes, consolidated is INR 2,600 crores, but stand-alone is INR 2,141 crores.

The next question comes from the line of Jatin Jadhav from Sahasrar Capital.

Most of my questions have been answered. But on a technological front, just to gain a better understanding, I wanted to understand where does Astra Microwave essentially sit in the entire radar ecosystem relative to other similar companies, specifically which layer of the radar architecture do we participate, RF, electronics, [indiscernible] so on and so forth.

Yes. When we compare with the other industries working in the radar domain, the differentiating factor here is we have grown from the component subsystems to the systems. So whatever systems we have taken it up to participate in the MOD program in services. So we have been developing in-house the [ total ] with the complete IP with Astra. It takes some time for us to come to the standard of global make. But finally, the contribution will be better and also we can be more competitive as compared to other players. And as far as the overall business in the radar is concerned, as I said, we are continuing our participation in the DRDO programs for all the development in the ground and airborne programs. And also we are partnered with the BEL for the production programs as we are the qualified supplier for the -- during the development phase. So that -- while continuing that business in subsystems and components, we are focusing in the systems for the MOD. As Mr. Atim had mentioned, we have taken up a few projects to address directly to the MOD. Those projects are in development phase. Most likely in the next few months, by the month -- by this year-end, I think we should be in a position to demonstrate to the user and to become a qualified supplier for this. So this -- we are growing in both system-wise and as well as on the systems front. And apart from that, we are also working out on the -- to provide overall solutions. It is not only a system, it is a complete solution to the end user, including a couple of systems mounted in the one platform that we -- more details will be shared to you in time to come. But we are focusing on that and that those programs are also in very active stage of completion. So by November, I think we should be in a position to roll out at least 1 or 2 systems.

Got it, sir. My second question is kind of like a follow-up on this only. So over the time, over 30 years, you've developed in-house IPs and technological capabilities. And so you positioned yourself very strongly in the radar ecosystem. So based on that, I wanted to understand, for example, is it possible for us or, let's say, a similar company to diverge into different types of radar. Let's say, right now, if we can cater to AESA radar, then can we shift to, let's say, a surveillance radar based on the [indiscernible] radar, probably a small seeker also. Is that possible based on our current capability?

Got your question. See, apart from the current business of the radar, we are also -- we are working in the futuristic technologies like we have recently developed and delivered major subsystems for the digital array radar for DRDO. And that is giving us edge to get more orders in the digital array radar. And similarly, we have developed photonics radar, which is working in the optical domain. And that also with collaboration with one start-up company, we have developed -- this is overall solution for the DRDO and we are successfully delivered. So these are the few technologies which are the new futuristic -- the technologies for the radar domain, which we have been working. So we are continuously working on this domain. And also for the existing radars, we are optimizing the technology, for example, to minimize the size of the array and all like since we have the components within the company, so we are in a position to scale down the overall size and form so that to offer miniaturized size radars for the future. So these are all we have been working continuously to make sure that we should be in a better position as compared to the competition.

The next question comes from the line of Prerit Jain with Motilal Oswal.

Sir, I only have one question. Can you please give us an update on the QRSAM and Uttam AESA radar orders? Like you earlier mentioned that there have been some delays in some of the orders from DRDO side itself. So can you give us an update on that? And whether these orders will come altogether and the execution will be panned out in subsequent years or even the orders will come in batches?

Yes. As far as the Uttam radar is concerned, the negotiations have been started with HAL. As you know, they have been negotiating because of the big pricing contract. So we have already started. I think it is almost reaching a final stage. I think we are expecting this particular order sometime in the Q2 or Q3 and as the process is more like to place the order. So -- but as far as today's position, as of today, negotiations are on for Uttam radar with HAL. That much I can tell you. And second is on the QSM front, as probably you are all aware that BEL stated that they are expecting contract by June or so. So we also expect orders once they get the order. But before that, we are expecting the FOPM version that is first of production model, which they got clearance from internally the Board, they're placing orders on vendors. So we have started receiving a small quantity for that FOPM model. And once after they get the main contract, we expect the orders in the next 3 to 4 months from their order.

The next question comes from the line of Sahil Karia with White Pine Investment Management.

So just wanted to ask on the -- like what are the time lines for this Su-30 upgradation program for both radar and the ASPJ pods? By when can we expect the production orders to come in?

Yes, I think I've answered this question just while some time back. But anyway, I'll again repeat. For the radar, the AAAU, which we have taken up development, that is on. I think next 2 to 3 months, we should be in a position to complete the development and hand over to DRDO. And in all probability, I think in maybe FY '28, DRDO will be ready to qualify the overall radar, but we cannot comment on behalf of DRDO. We are expecting that this will be completed in the next financial year. And similarly, in the EW front also, we are taken up by the DCP for that overall program, and it is in the development phase. And we are expecting next 1 year that also we should be completed and gets qualified. So soon after qualification, we hope to get production order from the services.

Sir, the reason behind this was on Bharat Electronics call, they had mentioned that the Su-30 program is still in the development stage, and it would be in the same stage for the next 5 years. So just wanted a color from your side that like do we receive the production orders after 5 years or like how it would be.

So as I said, the next year, probably next FY '28, I think radar should get qualified. But the user qualification and all may take another 1 more year. And thereafter, I think maybe next 2 to 3 years, we will take time to get the production orders. This is what our expectation as far as the progress is concerned.

[Operator Instructions] The next question comes from the line of Balasubramanian from Arihant Capital Markets.

Sir, our exports has been declined because we are moving away from low-margin build-to-print business. I just want to understand what is our current margin in this build-to-print and other design lead export orders? Just want to know the difference between both, sir.

Margins, see, as I mentioned, like the low-margin BTP business, we have left it out, and we are not addressing that particular market. We are only addressing the market in exports where our value addition is more and margins are much better than the BTP market. So here, although it is BTP, but our value addition is more. And the margins, as Mr. SG had already mentioned, it is around 45% as compared to the single-digit figure in the BTP business.

Yes, sir. Sir, my second question on the JV, we have seen just INR 1 crore share of profit from JV in FY '26. But in earlier con call, you have mentioned around ARC revenue of INR 350 crores with 10% to 12% PBT margin. Just want to understand, is there any significant cost in terms of technology transfer, fees, royalties or any pre-operational expenses on the JV.

I think INR 1 crore profit you are referring to the quarter. Otherwise, for the year now, it is around close to about INR 8 crores. That is a share of profit after tax, that is from the JV. Yes, during the current year -- of course, IT expenditure is always there. In addition to that, there is a foreign exchange provision which the company has to make. So because of that, close to about $2 million of provision was made in the books of accounts. As a result, the overall profitability has come down. But otherwise, the share of profit from the JV for the entire year is close to about INR 8 crores after tax.

The next question comes from the line of Darshal Javeri with Crown Capital.

A lot of my questions have been already asked, but just a few regarding the 3x target. So number one, it would be kind of like an asymmetrical growth, right, like that we would be having like -- because of our product approval. So a lot of this growth would come towards the end, like FY '29, '30. Is that a fair assumption, sir? And are we including the JV's revenue -- our share of JVs revenue in this? Or what -- or this is a stand-alone, sir?

Let me answer this. Yes, you're right, absolutely. It is going to be rear-ended. There are basically 5 or 6 major programs which are driving this, as I think a couple of times now. We have QRSAM, we have Uttam radars. We have Su-30 Virupaksha. We have Su-30 ANGAD and we have a regular business, which we do for our JV. And also maybe electronic mines, for example, is a big area for us, okay? So the -- so it is only just these 5 or 6 programs that we are talking about, which will lead us to the kind of numbers which we have indicated. The -- we are not factoring in our export potential out there. We are not factoring in a whole lot of other programs which we are a part of. And I think MV alluded to a lot of BEL programs. That's all gravy on the top. As and when it comes in, it keeps adding to our bottom line and makes up for some delay or some mishap which happens, which can pull back this number. So there's enough flexibility and depth built into these numbers to achieve them in 4.5 to 5.5 year time frame.

Okay. Fair enough, sir. And sir, just wanted to understand for the JV, we are kind of, I think, targeting around INR 600 crores revenue this year. So what would be the margins in this business? What can we expect to hit our P&L, sir? Rough range would also be fair enough.

Yes. Definitely, it is going to have an improvement over the current year. EBITDA, I think around 18% to 20% is what is being projected by the company. So basing on that INR 600 crore top line, at least about INR 20-plus crores will be our share of profit for the entire year. That is what I'm expecting as of now.

Okay. Okay. Fair. So we, I think in the past had said around 10% PBT. So INR 20 crores would be a kind of a lower PBT. So what would we -- so is that a higher depreciation or interest cost that something that's eating up? Or how would you say?

See, I have given the number at the lower end. Let us wait for the year to proceed. When I said INR 20 crores, that is a minimum. Let us see how the things proceed.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for their closing remarks.

Thank you, and thank you for your presence. I guess we had a good discussion, and I wish you meet you again at the end of Q1. Thank you very much.

Thank you.

Thank you. Thank you, guys. Thank you.

Thank you, sir. Ladies and gentlemen, on behalf of Astra Microwave Products, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.