Q1 2027 Centum Electronics Ltd Earnings Call

August 14, 2026

Speaker #1: Ladies and gentlemen, you have been connected for our Centum Electronics earnings conference call. The call will begin shortly. We request you to please stay connected.

Operator 2: Ladies and gentlemen, you have been connected for our Centum Electronics earning conference call. The call will begin shortly. Request you to please stay connected. A reminder to all the participants that you have been connected for Centum Electronics conference call. The call will begin shortly. Request you to please stay connected. Thank you. Ladies and gentlemen, good day, and welcome to Centum Electronics Q1 and FY27 earning conference call hosted by Avendus Spark Institutional Equities. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen-only mode, and there will be opportunity for you to ask questions after the presentation concludes.

Speaker #1: Reminder to all the participants that you have been connected for the Centum Electronics conference call. The call will begin shortly. We request you to please stay connected.

Speaker #1: Thank you. Ladies and gentlemen, good day and welcome to the Centum Electronics Q1 and FY27 earnings conference call, hosted by Amethyst Park Institutional Equities. 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.

Operator: Ladies and gentlemen, good day, and welcome to Centum Electronics Q1 and FY 2027 Earning Conference Call hosted by Avendus Spark Institutional Equities. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen-only mode, and there will be opportunity for you to ask questions after the presentation concludes.

Speaker #1: These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants on the line will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your desktop phone. Please note that this conference is being recorded.

Operator 2: Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Juzer. Thank you. Over to you, Juzer.

Operator: Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Juzer. Thank you. Over to you, Juzer.

Speaker #1: I will now hand the conference over to Mr. Jose. Thank you, and over to you, Jose.

Speaker #2: Good morning, everyone, and a very warm welcome to you all. My name is Jose Haveliwala from Valorant Advisors. We represent the investor relations of Centum Electronics on behalf of the company and Valorant Advisors.

Juzer Haveliwala: Good morning, everyone, and a very warm welcome to you all. My name is Juzer Haveliwala from Valorum Advisors. We represent the investor relations of Centum Electronics. On behalf of the company and Valorum Advisors, I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year 2027. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainty, which could cause actual results to differ from those anticipated. Such statements are based on management beliefs as well as assumptions made by information currently available. Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decision.

Speaker #2: I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year 2027. Before we begin, let me mention a short cautionary statement.

Speaker #2: Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainty, which could cause actual results to differ from those anticipated.

Juzer Haveliwala: Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainty, which could cause actual results to differ from those anticipated. Such statements are based on management beliefs as well as assumptions made by information currently available. Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decision.

Speaker #2: Such statements are based on management's beliefs as well as assumptions made from information currently available. Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decision.

Speaker #2: The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Let me now introduce the management participating with us in today's earnings call and hand it over to them for opening remarks.

Juzer Haveliwala: The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Nikhil Mallavarapu, Joint Managing Director, and Mr. Sundararajan Parthasarathy, the Chief Financial Officer. Without any further delay, I request Mr. Nikhil to start with his opening remarks. Thank you, and over to you, sir.

Speaker #2: We have with us Mr. Nikhil Malavarappu, Joint Managing Director, and Mr. Sundarajan Parthasarathy, the Chief Financial Officer. Without any further delay, I request Mr. Nikhil to start with his opening remarks.

Speaker #2: Thank you, and over to you, sir.

Speaker #3: Thank you, Jose, and good afternoon, everyone. Welcome to our earnings conference call to discuss the performance of the first quarter, FY27. Let me extend a special thanks to our hosts, Amethyst Park, for today's call.

Nikhil Mallavarapu: Thank you, Juzer. Thank you and good afternoon, everyone. Welcome to our earnings conference call to discuss performance of the Q1 FY27. Let me extend a special thanks to our hosts at Avendus Spark for today's call. Let me start by taking you through the key business highlights for the quarter, after which our CFO, Mr. Sundararajan Parthasarathy, will take you through the financial performance in greater detail. We have started FY27 on a steady note with revenue growth in our standalone business and continued strengthening of our strategic positioning across high reliability electronics. At the outset, I would like to highlight that the Q1 was somewhat muted compared with our expectations for the full year, both in terms of growth and margins. This is primarily a function of the quarterly variations in project execution and revenue phasing, particularly in our build-to-spec business.

Speaker #3: Let me start by taking you through the key business highlights for the quarter, after which our CFO, Mr. Sundarajan Parthasarathy, will take you through the financial performance in greater detail.

Speaker #3: We have started FY27 on a steady note, with revenue growth in our standalone business and continued strengthening of our strategic positioning across high-reliability electronics.

Nikhil Mallavarapu: We have started FY27 on a steady note with revenue growth in our standalone business and continued strengthening of our strategic positioning across high reliability electronics. At the outset, I would like to highlight that the Q1 was somewhat muted compared with our expectations for the full year, both in terms of growth and margins. This is primarily a function of the quarterly variations in project execution and revenue phasing, particularly in our build-to-spec business.

Speaker #3: At the outset, I would like to highlight that the first quarter was somewhat muted compared with our expectations for the full year, both in terms of growth and margins.

Speaker #3: This is primarily a function of the quarterly variations in project execution and revenue phasing, particularly in our Build-to-Spec business. Based on the momentum we are seeing across our businesses, our order pipeline, and customer engagements, we are confident that the stronger execution expected in the subsequent quarters will enable us to deliver against our full-year growth objectives.

Nikhil Mallavarapu: Based on the momentum we are seeing across our businesses, our order pipeline, and customer engagements, we are confident that the stronger execution expected in subsequent quarters will enable us to deliver against full-year growth objectives. As we mentioned consistently, we encourage investors to look at our performance and outlook on a full-year basis. During the quarter, standalone revenue grew 11% year-on-year to INR 205 crore, while we closed the quarter with a standalone order book of approximately INR 1,800 crore, representing a robust 31% year-on-year growth and providing strong visibility for future growth. One of the most significant developments during the quarter was the successful completion of the restructuring and exit from our overseas subsidiaries. As many of you would recall, we initiated this strategic exercise last year with the objective of sharpening our focus on our core India business and ensuring more disciplined capital allocation.

Speaker #3: As we mentioned consistently, we encourage investors to look at our performance and outlook on a full-year basis. During the quarter, standalone revenue grew 11% year-on-year to ₹205 crore.

Nikhil Mallavarapu: During the quarter, standalone revenue grew 11% year-on-year to INR 205 crore, while we closed the quarter with a standalone order book of approximately INR 1,800 crore, representing a robust 31% year-on-year growth and providing strong visibility for future growth.

Speaker #3: We closed the quarter with a standalone order book of approximately ₹1,800 crore, representing a robust 31% year-on-year growth and providing strong visibility for future growth.

Speaker #3: One of the most significant developments during the quarter was the successful completion of the restructuring and exit from our overseas subsidiaries. As many of you will recall, we initiated this strategic exercise last year with the objective of sharpening our focus on our core India business and ensuring more disciplined capital allocation.

Nikhil Mallavarapu: One of the most significant developments during the quarter was the successful completion of the restructuring and exit from our overseas subsidiaries. As many of you would recall, we initiated this strategic exercise last year with the objective of sharpening our focus on our core India business and ensuring more disciplined capital allocation.

Speaker #3: During the quarter, the French court approved the acquisition of substantially all operating business and employees of Centum TNS Group S.A. and certain subsidiaries to the successful bidders, which were MBDA and SII.

Nikhil Mallavarapu: During the quarter, the French court approved the acquisition of substantially all operating business and employees of Centum T&S Group SA and certain subsidiaries to the successful bidders, which were MBDA and SII. Following the transfer, these entities ceased operating activities and were deconsolidated from our financial statements effective 4 June 2026. Subsequently, the French court converted the process into liquidation judiciaire and appointed a judicial liquidator on 2 July 2026 to oversee the remaining wind-down activities. Importantly, with the operating businesses now transferred and restructuring process substantially completed, we do not expect any further liabilities in relation to these subsidiaries. This allows us to put this chapter behind us and move forward with a much sharper focus on our core India ESDM platform, with greater management attention and capital directed towards our standalone business. Sundar will take you through the accounting impact of these developments in greater detail.

Speaker #3: Following the transfer, these entities ceased operating activities and were deconsolidated from our financial statements effective 4th June 2026. Subsequently, the French court converted the process into liquidation judiciaire and appointed a judicial liquidator on 2nd July 2026 to oversee the remaining wind-down activities.

Speaker #3: Importantly, with the operating businesses now transferred and the restructuring process substantially completed, we do not expect any further liabilities in relation to these subsidiaries. This allows us to put this chapter behind us and move forward with a much sharper focus on our core India ESDM platform, with greater management attention and capital directed towards our standalone business.

Nikhil Mallavarapu: Importantly, with the operating businesses now transferred and restructuring process substantially completed, we do not expect any further liabilities in relation to these subsidiaries. This allows us to put this chapter behind us and move forward with a much sharper focus on our core India ESDM platform, with greater management attention and capital directed towards our standalone business. Sundar will take you through the accounting impact of these developments in greater detail.

Speaker #3: Sundar will take you through the accounting impact of these developments in greater detail. Let me now move to our operational performance and business highlights.

Nikhil Mallavarapu: Let me now move to our operational performance and business highlights. Our Build-to-Specification, or BTS business, continues to have a strong underlying demand environment. Revenue in the quarter was impacted by the project execution schedules, but our order book remained healthy and grew approximately 40% year-on-year. Looking ahead, we expect continued strong order intake through the year across several of our key programs, particularly in the areas of space, radar, electronic warfare, and air navigation. This gives us confidence in the growth trajectory of the BTS business as we move through the year. Our Electronic Manufacturing Services, or EMS business, also continued to perform well, with the revenue growing 20% year-on-year and order book expanding 23% year-on-year. We are ramping up well with our semiconductor equipment customer, and the demand remains solid and is in line with our expectations for the current year.

Speaker #3: Our Build to Specification, or BTS, business continues to have a strong underlying demand environment. Revenue in the quarter was impacted by the project execution schedules, but our order book remained healthy and grew approximately 40% year-on-year.

Speaker #3: Looking ahead, we expect continued strong order intake throughout the year across several of our key programs, particularly in the areas of space, radar, electronic warfare, and air navigation.

Speaker #3: This gives us confidence in the growth trajectory of the BTS business as we move through the year. Our electronic manufacturing services, or EMS, business also continues to perform well, with revenue growing 20% year-on-year and the order book expanding 23% year-on-year.

Nikhil Mallavarapu: This gives us confidence in the growth trajectory of the BTS business as we move through the year. Our Electronic Manufacturing Services, or EMS business, also continued to perform well, with the revenue growing 20% year-on-year and order book expanding 23% year-on-year. We are ramping up well with our semiconductor equipment customer, and the demand remains solid and is in line with our expectations for the current year.

Speaker #3: We are ramping up well with our semiconductor equipment customer, and the demand remains solid and is in line with our expectations for the current year.

Speaker #3: And importantly, based on customer engagements and opportunities we are seeing, we believe there is visibility to surpass our current expectations over the next one to two years.

Nikhil Mallavarapu: Importantly, based on customer engagements and opportunities we are seeing, we believe there is visibility to surpass our current expectations over the next one to two years. More broadly, we continue to see increasing opportunities across industrial automation, electrification, and grid automation. During the quarter, we received a strategic partner award from a leading global industrial and energy conglomerate. We value this recognition as a strong endorsement of our engineering capabilities, execution track record, and long-standing customer relationship. This also reflects an important area of focus for Centum going forward. We are increasingly working with global customers who are implementing localization strategies in India while simultaneously responding to growing global demand for advanced electronics. We see an opportunity to leverage our engineering capabilities, manufacturing scale, and high reliability expertise to become a deeper partner to these customers as they localize and diversify their supply chains.

Speaker #3: More broadly, we continue to see increasing opportunities across industrial automation, electrification, and grid automation. During the quarter, we received a strategic partner award from a leading global industrial and energy conglomerate.

Speaker #3: We value this recognition as a strong endorsement of our engineering capabilities, execution track record, and long-standing customer relationships. This also reflects an important area of focus for Centum going forward.

Nikhil Mallavarapu: This also reflects an important area of focus for Centum going forward. We are increasingly working with global customers who are implementing localization strategies in India while simultaneously responding to growing global demand for advanced electronics. We see an opportunity to leverage our engineering capabilities, manufacturing scale, and high reliability expertise to become a deeper partner to these customers as they localize and diversify their supply chains.

Speaker #3: We are increasingly working with global customers who are implementing localization strategies in India, while simultaneously responding to growing global demand for advanced electronics. We see an opportunity to leverage our engineering capabilities, manufacturing scale, and high-reliability expertise to become a deeper partner to these customers as they localize and diversify their supply chains.

Speaker #3: As part of this strategy, we have initiated the NPI process for a number of electrification for yeah, a number of electrification and grid automation products.

Nikhil Mallavarapu: As part of this strategy, we have initiated the NPI process for a number of electrification and grid automation products. These programs are expected to start contributing meaningfully to revenue growth over the next two years and provide another important growth avenue for our EMS business. Across our other focus areas, we are tightly integrating our engineering services and EMS teams to deliver differentiated design-led manufacturing solutions, enabling customers to seamlessly transition from product design to high reliability manufacturing. This approach strengthens our value proposition, enhances customer engagement, and supports improved margin profiles. We have made encouraging progress in building this capability and are optimistic about securing our first DLM program wins in the coming quarters. Our objective remains to move further up the value chain by combining our design and engineering expertise with advanced manufacturing capabilities.

Speaker #3: These programs are expected to start contributing meaningfully to revenue growth over the next two years and provide another important growth avenue for our EMS business.

Speaker #3: Across our other focus areas, we are tightly integrating our engineering services and EMS teams to deliver differentiated, design-led manufacturing solutions, enabling customers to seamlessly transition from product design to high-reliability manufacturing.

Speaker #3: This approach strengthens our value proposition, enhances customer engagement, and supports improved margin profiles. We have made encouraging progress in building this capability, and we are optimistic about securing our first DLM program wins in the coming quarters.

Nikhil Mallavarapu: This approach strengthens our value proposition, enhances customer engagement, and supports improved margin profiles. We have made encouraging progress in building this capability and are optimistic about securing our first DLM program wins in the coming quarters. Our objective remains to move further up the value chain by combining our design and engineering expertise with advanced manufacturing capabilities.

Speaker #3: Our objective remains to move further up the value chain by combining our design and engineering expertise with advanced manufacturing. With a robust order book, strong expected order intake, expanding customer engagements, and a healthy opportunity pipeline across both BTS and EMS, we believe Centum is well-positioned to capitalize on these structural opportunities.

Nikhil Mallavarapu: In summary, with a robust order book, strong expected order intake, expanding customer engagements, and a healthy opportunity pipeline across both BTS and EMS, we believe Centum is well positioned to capitalize on these structural opportunities. With that, I would now like to hand over the call to our CFO, Mr. Sundararajan Parthasarathy, who will take you through the financial performance for the quarter in greater detail.

Speaker #3: With that, I would now like to hand over the call to our CFO, Mr. Sundar Rajan Pathasarathy, who will take you through the financial performance for the quarter in greater detail.

Speaker #2: Thank you, Mr. Nikhil. And good afternoon, everyone. Let me now take you through the financial highlights for the first quarter of financial year 2027.

Sundararajan Parthasarathy: Thank you, Mr. Nikhil, and good afternoon, everyone. Let me now take you through the financial highlights for Q1 of financial year 2027. At the standalone level, our revenue from operations for the quarter stood at INR 205 crores, registering a healthy growth of approximately 11% year-on-year. EBITDA for the quarter stood at INR 23 crores, which translates into an EBITDA margin of 11.28%. Profit before tax stood at INR 18 crores, while profit after tax stood at INR 14 crores with a PAT margin of 6.59%. While margins during this quarter were impacted by relatively lower contribution from the BTS business, we expect the revenue mix to improve as execution on key BTS programs accelerate over the coming quarters. Before I move to the consolidated performance, let me briefly touch upon the accounting impact of the overseas restructuring.

Speaker #2: At the standalone level, our revenue from operations for the quarter stood at $205 million, registering a healthy growth of approximately 11% year-on-year. EBITDA for the quarter stood at $23 million, which translates into an EBITDA margin of 11.28%.

Speaker #2: Profit before tax stood at $18 million, while profit after tax stood at $14 million, with a PAT margin of 6.59%. While margins during this quarter were impacted by a relatively lower contribution from the BTS business, we expect the revenue mix to improve as execution on key BTS programs accelerates over the coming quarters.

Sundararajan Parthasarathy: While margins during this quarter were impacted by relatively lower contribution from the BTS business, we expect the revenue mix to improve as execution on key BTS programs accelerate over the coming quarters. Before I move to the consolidated performance, let me briefly touch upon the accounting impact of the overseas restructuring.

Speaker #2: Before I move to the consolidated performance, let me briefly touch upon the accounting impact of the OC's restructuring. During the quarter, following the approval of the French court and the transfer of substantially all operating businesses and employees to the successful bidders, the OC's entities were deconsolidated, effective 4th of June.

Sundararajan Parthasarathy: During the quarter, following the approval of the French code and the transfer of substantially all operating businesses and employees to the successful bidders, the overseas entities were deconsolidated effective 4 June. Consequently, the financial statements reflect a one-time profit on deconsolidation of INR 94 crores, while the remaining entities are now under liquidation proceedings. These developments provide greater transparency into the performance of our continuing operations and sharpen our focus on the core India business. Coming to the consolidated financial performance. Revenue from operations for the quarter stood at INR 204 crores, representing a growth of approximately 14% year-on-year. EBITDA stood at INR 24 crores with an EBITDA margin of 11.56%. Profit from continuing operations after tax stood at INR 11 crores, and including the one-time gain arising out of the deconsolidation of the overseas subsidiaries, the consolidated profit after tax for the quarter stood at INR 106 crores.

Speaker #2: Consequently, the financial statements reflect a one-time profit on deconsolidation of $94, while the remaining entities are now under liquidation proceedings. These developments provide greater transparency into the performance of our continuing operations and sharpen our focus on the core India business.

Speaker #2: Coming to the consolidated financial performance, revenue from operations for the quarter stood at INR 204 crore, representing a growth of approximately 14% year-on-year. EBITDA stood at INR 24 crore, with an EBITDA margin of 11.56%.

Sundararajan Parthasarathy: Coming to the consolidated financial performance. Revenue from operations for the quarter stood at INR 204 crores, representing a growth of approximately 14% year-on-year. EBITDA stood at INR 24 crores with an EBITDA margin of 11.56%. Profit from continuing operations after tax stood at INR 11 crores, and including the one-time gain arising out of the deconsolidation of the overseas subsidiaries, the consolidated profit after tax for the quarter stood at INR 106 crores.

Speaker #2: Profit from continuing operations after tax stood at INR 11 crore, and including the one-time gain arising out of the deconsolidation of the OC subsidiaries, the consolidated profit after tax for the quarter stood at INR 106 crore.

Speaker #2: Our overall performance continues to reflect the resilience of our core India operations, well supported by healthy execution across both our BTS and EMS businesses, robust order inflows, and sustained demand across strategic sectors including defense, aerospace, semiconductor equipment, industrial automation, and energy.

Sundararajan Parthasarathy: Our overall performance continues to reflect the resilience of our core India operations, well supported by healthy execution across both our BTS and EMS businesses, robust order inflows, and sustained demand across strategic sectors including defense, aerospace, semiconductor equipment, industrial automation, and energy. We also closed the quarter with a standalone order book of approximately INR 1,800 crores, up 31% year-on-year, and strong order inflow for the quarter that stood at approximately INR 360 crores. That grew by approximately 70% year-on-year, which was mainly influenced by BTS registering a robust 150% year-on-year growth at INR 120 crores. This provides a strong revenue visibility for the coming years. Overall, we remain confident in the strength of our business fundamentals with a focused India ESDM platform, a healthy order book, expanding customer engagements, and a strong opportunity pipeline across both BTS and EMS businesses.

Speaker #2: We also closed the quarter with a standalone order book of approximately $1,800, up 31% year-on-year, and strong order inflow for the quarter that stood at INR 360 crore approximately, which grew by approximately 70% year-on-year. This was mainly influenced by BTS registering a robust 150% year-on-year growth at INR 120 crore.

Sundararajan Parthasarathy: That grew by approximately 70% year-on-year, which was mainly influenced by BTS registering a robust 150% year-on-year growth at INR 120 crores. This provides a strong revenue visibility for the coming years. Overall, we remain confident in the strength of our business fundamentals with a focused India ESDM platform, a healthy order book, expanding customer engagements, and a strong opportunity pipeline across both BTS and EMS businesses. We believe the company is well positioned to deliver sustainable long-term growth. With that, we can now open the floor for the Q&A session. Thank you.

Speaker #2: This provides strong revenue visibility for the coming years. Overall, we remain confident in the strength of our business fundamentals. With a focused India ESGM platform, a healthy order book, expanding customer engagements, and a strong opportunity pipeline across both BTS and EMS businesses, we believe the company is well positioned to deliver sustainable long-term growth.

Sundararajan Parthasarathy: We believe the company is well positioned to deliver sustainable long-term growth. With that, we can now open the floor for the Q&A session. Thank you.

Speaker #2: With that, we can now open the floor for the Q&A session. Thank you.

Speaker #1: Thank you so much, sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 2: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sai Vijay with Capstock Securities. Please go ahead.

Operator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sai Vijay with Capstock Securities. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Sai Vijay with Capstock Securities.

Speaker #1: Please go ahead.

Speaker #3: Good afternoon, sir. Thank you for the opportunity. Sir, my first question is regarding the BTS segment. Given the higher project lifecycle of over two and a half years, our order book has almost doubled since FY24.

Sai Vijay: Good afternoon, sir. Thank you for the opportunity. My first question is regarding the BTS segment. Given the higher project life cycle of over 2.5 years, our order book has almost doubled since FY 2024. Can we expect an accelerated revenue recognition going forward for the BTS segment?

Sai Vijaya: Good afternoon, sir. Thank you for the opportunity. My first question is regarding the BTS segment. Given the higher project life cycle of over 2.5 years, our order book has almost doubled since FY 2024. Can we expect an accelerated revenue recognition going forward for the BTS segment?

Speaker #3: So, can we expect accelerated revenue recognition going forward for the BTS segment?

Speaker #2: Yeah, thanks for the question, Jay. Yes, the simple answer is yes. With the increased order intake that we've had, we expect to have clear, strong revenue growth in the BTS business this year.

Nikhil Mallavarapu: Yeah. Thanks for the question, Vijay. The simple answer is yes. With the increased order intake that we have had, we expect to have clear, strong revenue growth in the BTS business this year and the coming years also. Like I mentioned during a call, there is a high level of quarterly variations, but on a full year basis, they cannot.

Speaker #2: And in the coming years also, like I mentioned during the call, there is a high level of quarterly variations, but on a full-year basis.

Speaker #2: We are very confident.

Speaker #1: I'm sorry, sir, but your voice is breaking.

Operator 2: I am sorry, sir, but your voice is breaking.

Operator: I am sorry, sir, but your voice is breaking.

Speaker #2: Okay. So, no, I was just explaining that we do absolutely expect that there will be healthy growth of the revenue in the BTS segment as a result of the increased order book.

Nikhil Mallavarapu: I was just explaining that we do absolutely expect that there will be a healthy growth of the revenue in BTS segment as a result of the increased order book. We have some quarterly variations because of the lumpy nature of this business and the contract. But on a full year basis, we expect to have strong growth in revenue.

Speaker #2: We have some quarterly variations because of the lumpy nature of this business and the contract. But on a full-year basis, we expect to have strong revenue growth.

Speaker #3: All right, sir. Just one doubt regarding the advances: around ₹210 crore of advances that we currently have, how much of it is coming from the BTS segment?

Sai Vijay: All right. Sir, just one doubt regarding the advances. Around INR 210 crores of advances that we currently have, how much of it is coming from the BTS segment?

Sai Vijaya: All right. Sir, just one doubt regarding the advances. Around INR 210 crores of advances that we currently have, how much of it is coming from the BTS segment?

Speaker #2: So, I would say the majority of that is coming from the BTS segment only, given the nature of the business. To be precise, about two-thirds is coming from BTS.

Sundararajan Parthasarathy: I would say majority of that is coming from the BTS segment only given the nature of the business.

Sai Vijay: Okay. Thank you, sir. Very helpful.

Sai Vijaya: Okay. Thank you, sir. Very helpful.

Sundararajan Parthasarathy: About two-thirds is coming from the BTS.

Speaker #3: All right. All right. Thank you very much, sir, and congrats on the results. I'll get back on that.

Sai Vijay: All right, cool. Thank you very much, sir. And congrats on the results. I will get back on.

Sai Vijaya: All right, cool. Thank you very much, sir. And congrats on the results. I will get back on.

Speaker #2: Thank you. Thank you so much.

Speaker #1: Thank you. Our next question comes from the line of Pratik Srivastava with Nivesh Wisdom. Please go ahead.

Sundararajan Parthasarathy: Thank you so much.

Operator 2: Thank you. Our next question comes from the line of Prateek Srivastava with Nivesh Wisdom. Please go ahead.

Operator: Thank you. Our next question comes from the line of Prateek Srivastava with Nivesh Wisdom. Please go ahead.

Speaker #3: Yeah. Again, congratulations, sir, on a great set of numbers and great progress in the BTS segment. My question is about the semiconductor equipment. Sir, this has been referenced in the call also many times.

Prateek Srivastava: Yeah. Again, congratulations, sir, on a great set of number and great progress in the BTS segment. My question is about the semiconductor equipment, sir. This has been referenced in the call also many times. I just want to understand what this semiconductor equipment, can you just give more details on this semiconductor equipment? Again, who are the customers? Have you signed any large global player in that? Just want more details on the semiconductor equipment, sir.

Prateek Shrivastava: Yeah. Again, congratulations, sir, on a great set of number and great progress in the BTS segment. My question is about the semiconductor equipment, sir. This has been referenced in the call also many times. I just want to understand what this semiconductor equipment, can you just give more details on this semiconductor equipment? Again, who are the customers? Have you signed any large global player in that? Just want more details on the semiconductor equipment, sir.

Speaker #3: I just want to understand more about the semiconductor equipment. Can you give more details on this semiconductor equipment? Also, who are the customers? Have you signed any large global players in that area?

Speaker #3: So, I just want more details on this semiconductor equipment, sir.

Speaker #2: Sure. Thanks for the question, Pratik. Yes. So, first of all, this is part of our EMS business. It is essentially where we are manufacturing various types of box builds and PCBAs that go into the equipment used in manufacturing semiconductors.

Nikhil Mallavarapu: Sure. Thanks for the question, Prateek. Yes. First of all, this is part of our EMS business, so it is essentially where we are manufacturing various types of box builds and PCBAs that go into the equipment used in manufacturing semiconductors. If you talk about the processes such as photolithography or etching and some of these critical processes that actually enable the manufacturing of semiconductors, they are supplied largely by a very few large global OEMs that supply these equipment to the foundries, essentially. In terms of where we are, we have one of these key global OEMs that we have added as a customer, and we have ramped up over the course of the last year. We continue to ramp up in terms of new part numbers and products that we are delivering.

Speaker #2: So, if you talk about processes such as photolithography or etching, and some of these critical processes that actually enable the manufacturing of semiconductors, they are supplied largely by a few, very few, large global OEMs.

Nikhil Mallavarapu: If you talk about the processes such as photolithography or etching and some of these critical processes that actually enable the manufacturing of semiconductors, they are supplied largely by a very few large global OEMs that supply these equipment to the foundries, essentially. In terms of where we are, we have one of these key global OEMs that we have added as a customer, and we have ramped up over the course of the last year. We continue to ramp up in terms of new part numbers and products that we are delivering.

Speaker #2: That supply these equipment to the foundries, essentially. And in terms of where we are, this is a we have a global OEM. One of these key global OEMs that we have added as a customer and we have ramped up over the course of the last year, and we continue to ramp up in terms of new part numbers and products that we're delivering.

Speaker #2: On previous calls and so on, I had mentioned that our revenue from this segment, which was practically zero in FY25, was in excess of ₹10 million, or over ₹100 crores of revenue contribution, in FY26.

Nikhil Mallavarapu: On previous calls and so on, I had mentioned that our revenue, from this segment, which was practically zero in FY2025, was in excess of over INR 100 crores of revenue contribution in FY2026. We expect this to get in the range of 25 to 30 million in the coming one to two years. This is where we are seeing a strong visibility, and it is in line with our expectations.</seg <seg id="3">Got it, sir. Since this is EMS and not BTS, what are the margins in this business, and what are the margins we are looking forward in future in this business, sir?

Speaker #2: And we expect this to get to a in the range of 25 to 30 million. In the coming one to two years. And this is where we are seeing a strong visibility and we are on it's in line with our expectations.

Speaker #3: Got it, sir. And since this is EMS and not BTS, what are the margins in this business, and what are the margins we are looking forward to in the future in this business, sir?

Prateek Srivastava: Got it, sir. Since this is EMS and not BTS, what are the margins in this business, and what are the margins we are looking forward in future in this business, sir?

Prateek Shrivastava: Got it, sir. Since this is EMS and not BTS, what are the margins in this business, and what are the margins we are looking forward in future in this business, sir?

Speaker #2: Yeah. With the EMS business, considering the sectors that we are addressing, these will be in the range of about 10% in total. They can vary slightly a little bit up and down depending on the customer and segment a little bit.

Nikhil Mallavarapu: Yeah. With the EMS business, considering the sectors that we are addressing, these will be in the range of about 10%. They can vary slightly, a little bit up and down, depending on the customer and the segment a little bit, but I would say not a huge amount of variation. Typically, this being a cost-plus model, 10%, 11% is a fairly benchmark bit of margin.

Speaker #2: But I would say not a huge amount of variation. Typically, this being a cost-plus model, 10–11% is a fairly benchmark bit of margin, so.

Speaker #3: And in the future, can we use the learnings from this and get more into a sort of BTS model, where the margins could be higher in this segment?

Prateek Srivastava: In future, can we use the learnings from this and get more into sort of BTS sort of a model where the margins could be higher in this segment?

Prateek Shrivastava: In future, can we use the learnings from this and get more into sort of BTS sort of a model where the margins could be higher in this segment?

Speaker #2: Yeah, so this is where I was addressing the point around the design-led manufacturing. Where we are, while we have a BTS, we run our BTS separately in the form of actually building products for defense and space and so on.

Nikhil Mallavarapu: Yeah. So this is where I was addressing the point around the design-led manufacturing. While we have a BTS, we run our BTS separately in the form of actually building products for defense and space and so on. We also had an engineering services team, which was originally intended or created for this overseas subsidiary that we've had. But with that being basically behind us now, we are refocusing this part of our business to work very closely with our EMS team and our EMS customers to offer more end-to-end solutions or design-led manufacturing solutions. So, as those progress, we do expect to have a higher margin contribution from those businesses.

Speaker #2: We also had an engineering services team, which was for this overseas subsidiary that we've had. But, with that being basically behind us now, we are refocusing this part of our business to work very closely with our EMS team and our EMS customers.

Nikhil Mallavarapu: But with that being basically behind us now, we are refocusing this part of our business to work very closely with our EMS team and our EMS customers to offer more end-to-end solutions or design-led manufacturing solutions. So, as those progress, we do expect to have a higher margin contribution from those businesses.

Speaker #2: To offer more end-to-end solutions or design-led manufacturing solutions. So, as those progress, we do expect to have a higher margin contribution from those businesses.

Speaker #3: Got it. Thank you. Thank you for answering my question, sir, and all the very best.

Prateek Srivastava: Got it. Thank you. Thank you for answering my questions, sir. All the very best.

Prateek Shrivastava: Got it. Thank you. Thank you for answering my questions, sir. All the very best.

Speaker #2: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may please start, one after the other, on the student telephone. Our next question comes from the line of Darshan Gala with Gala Investment.

Nikhil Mallavarapu: Thank you.

Operator 2: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touch-tone telephone. Our next question comes from the line of Darshan Gala with Gala Investment. Please go ahead.

Operator: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touch-tone telephone. Our next question comes from the line of Darshan Gala with Gala Investment. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Hi, sir. Am I audible?

Speaker #1: Yes, you are.

Darshan Gala: Hi, sir. Am I audible?

Speaker #3: Hi. Hi, sir. You were just explaining how the margins would be much higher in the semiconductor part of the business. Can you—when can we expect those revenues to start meaningfully contributing?

Operator 2: Yes, you are.

Operator: Yes, you are.

Darshan Gala: Hi. Hi, sir. You were just explaining how the margins would be much higher in the semiconductor part of the business. When can we expect those revenue to start meaningfully contribute?

Speaker #2: No, I didn't talk about higher margins in semiconductors. I said the revenue growth—we have good visibility on semiconductors. But this is fundamentally an EMS business.

Nikhil Mallavarapu: I did not talk about higher margins in semiconductor. I said the revenue growth, we have a good visibility on semiconductor, but this is fundamentally EMS business.

Speaker #2: So the margins will stay at around 10 or 11%, yeah.

Darshan Gala: Correct.

Nikhil Mallavarapu: The margins-

Darshan Gala: Yeah, sorry on that.

Speaker #3: Correct, correct. Sorry about that. But regarding the revenue part, when can it start meaningfully contributing?

Nikhil Mallavarapu: will probably stay at around 11%.

Darshan Gala: Correct. Sorry on that. About the revenue part, when can it start meaningfully contribute?

Speaker #4: Darshan, hi. So, like you mentioned, FY26 has already started to come in, which was 100,700.

Nikhil Mallavarapu: Darshan, hi. So like you mentioned, FY 2026 which was 700-

Sundararajan Parthasarathy: Darshan, hi. So like you mentioned, FY 2026 which was 700-

Speaker #1: I'm sorry to interrupt you, Management. Your voice is breaking.

Operator 2: I am sorry to interrupt you, management. Your voice is breaking.

Operator: I am sorry to interrupt you, management. Your voice is breaking.

Speaker #4: Is this any better?

Speaker #3: Slightly better, I can say. So, it's still breaking.

Nikhil Mallavarapu: Is this any better?

Operator 2: Slightly better, I can say, sir. It is still breaking.

Operator: Slightly better, I can say, sir. It is still breaking.

Speaker #4: How about this? Is this okay?

Speaker #1: Yes, this is loud and clear. Thank you, sir. You may proceed.

Nikhil Mallavarapu: How about this? Is this okay?

Sundararajan Parthasarathy: How about this? Is this okay?

Speaker #4: Okay, yeah. I was explaining to Darshan that the contribution of revenue from this business was zero in FY25, and it ramped up to ₹100 crores in the last year—more than ₹100 crores.

Operator 2: Yes. This is loud and clear. Thank you, sir. You may proceed.

Operator: Yes. This is loud and clear. Thank you, sir. You may proceed.

Nikhil Mallavarapu: Okay. Yeah. I was explaining to Darshan that the contribution of revenue from this business was zero in FY 2025, and it ramped up to INR 100 crores in the last year, more than INR 100 crores. We expect this to kind of double or triple in the next two years. So you will see that coming in this year as well as it will further ramp up in the next year. That's what we see.

Sundararajan Parthasarathy: Okay. Yeah. I was explaining to Darshan that the contribution of revenue from this business was zero in FY 2025, and it ramped up to INR 100 crores in the last year, more than INR 100 crores. We expect this to kind of double or triple in the next two years. So you will see that coming in this year as well as it will further ramp up in the next year. That's what we see.

Speaker #4: We expect this to kind of double or triple in the next two years. So, you will see that coming in this year, as well as it will further ramp up in the next year.

Speaker #4: That's what we see.

Speaker #3: Thank you. Thank you. I'll get back in the Q4.

Darshan Gala: Thank you. I'll get back in the queue.

Speaker #4: Yep.

Speaker #1: Thank you. Our next question comes from the line of Karan Samwal with Nivasha. Please go ahead.

Operator 2: Thank you. Our next question comes from the line of Karan Sanwal with Nivask. Please go ahead.

Operator: Thank you. Our next question comes from the line of Karan Sanwal with Nivask. Please go ahead.

Speaker #3: Yeah, thank you for the opportunity. Sir, I wanted to understand something along the lines of what the previous participant asked. So, semiconductor—we have already rendered the semiconductor division in the last two quarters, maybe Q4 and Q3.

Karan Sanwal: Yeah. Thank you for the opportunity. Sir, I wanted to understand something along what previous participants asked. So semiconductor, we have already ramped up the semiconductor division already within the last two quarters, maybe Q4 and Q3. So, should this execution remain stable and the customer tests our product in the real condition, would there be a linear growth or there can also be an exponential growth as we also qualify the simultaneous other parts for the same customer?

Speaker #3: So, should this execution remain stable and the customer test our product in real conditions? And would there be a linear growth, or can there also be exponential growth as we also qualify the simultaneous other parts for the same customers?

Speaker #2: Let me make sure I’ve understood the question correctly, Karan. So, your question was with regard to the semiconductor equipment—if these have been tested and validated in the real environment. And then your second question was with regard to growth, whether you see that as exponential growth or linear growth.

Nikhil Mallavarapu: Let me make sure I have understood the question correctly, Karan. So your question was with regard to the semiconductor equipment, if these have been tested and validated in the real environment. Then your second question was with regard to growth, whether you see that it is an exponential growth or linear growth. Is my understanding correct?

Speaker #2: Is my understanding correct?

Speaker #3: Yes, sir.

Speaker #2: Okay. Yeah. So yes, to your first question, absolutely, they are in production. This is, first of all, a very highly recurring business.

Karan Sanwal: Yes, sir.

Nikhil Mallavarapu: Okay. So yes, to your first question, absolutely, they are in production. So this is, first of all, a very highly recurring business. You will have maybe certain variability that comes with longer CapEx cycles in the broader semiconductor manufacturing industry. But at least for the next 2 years or 3 years, there is a fairly strong visibility in terms of the demand in the industry. As a qualified partner for these global OEMs, these products typically have very long product life cycles. So we have a fairly good level of recurring revenue from this part of the business. Also, in the last year itself, for all the products that are already in production, we have gone through the full qualification process and requirements. So that is behind us, and now it is in serial production. But we continue to add also new part numbers from these customers.

Speaker #2: You will have maybe certain variability that comes with longer capex cycles in the broader semiconductor manufacturing industry. But at least for the next two or three years, there is fairly strong visibility in terms of demand in the industry.

Speaker #2: And as a qualified partner for these global OEMs, these products typically have very long product life cycles. And so we have a fairly good level of recurring revenue from this part of the business.

Nikhil Mallavarapu: So we have a fairly good level of recurring revenue from this part of the business. Also, in the last year itself, for all the products that are already in production, we have gone through the full qualification process and requirements. So that is behind us, and now it is in serial production. But we continue to add also new part numbers from these customers.

Speaker #2: Also, in the last year itself, for all the products that are already in production, we have gone through the full qualification process and requirements. That is behind us.

Speaker #2: And now it is in serial production. But we continue to add also new part numbers from these customers. As and when we do that, they will go through their respective qualification processes and then go into production after that.

Nikhil Mallavarapu: As and when we do that, they will go through their respective qualification processes and then go into production after that. So I would say we are very well integrated and now in a fairly mature process in the supply chain. Your second question about growth, I think, as we mentioned, this has already been a very steep and strong growth, considering the fact that this was pretty much zero in terms of revenue in FY2025, exceeding INR 100 crores in FY2026. As Sundar was mentioning, we expect it to more than double going forward in the coming years and so on. So, clearly a steep growth over these couple of years. We expect, of course, that it will stabilize at a point in the next maybe 1 to 2 years, and then it should be fairly stable after that.

Speaker #2: So, I would say we have integrated very well and are now in a fairly mature process in the supply chain. Your second question about growth: I think, as we mentioned, this has already been a very steep and strong growth, considering the fact that this was pretty much zero in terms of revenue in FY25, exceeding ₹100 crores in FY26.

Speaker #2: And as Sundar was mentioning, we expect to more than double going forward in the coming year and so on. So, clearly, steep growth over these couple of years.

Nikhil Mallavarapu: As Sundar was mentioning, we expect it to more than double going forward in the coming years and so on. So, clearly a steep growth over these couple of years. We expect, of course, that it will stabilize at a point in the next maybe 1 to 2 years, and then it should be fairly stable after that.

Speaker #2: And we expect, of course, that it will stabilize at a point in the next maybe one to two years. Then it should be fairly stable after that.

Speaker #3: So, it would still be a recurring demand after one to two years, right?

Karan Sanwal: So it would still be a recurring demand after 1, 2 years, right?

Speaker #2: Yes. Yes.

Speaker #3: Understood. And for the product that we are manufacturing for these semiconductor equipment players, who are we competing with in India? Or are we competing with players in other geographies?

Nikhil Mallavarapu: Yes.

Karan Sanwal: Understood. For the product that we are manufacturing for these semiconductor equipment players, who are we competing with in India? Or are we competing with players in other geographies? Where is the competition placed in position for the product that we are already manufacturing, or we will be manufacturing in future for the semiconductor clients?

Speaker #3: Where is the competition placed in the position for the product that we are already manufacturing, or that we will be manufacturing in the future for the semiconductor clients?

Speaker #2: So, in terms of manufacturing, which I was…

Nikhil Mallavarapu: Sorry to interrupt you, management. Again, your voice is breaking. I was saying that with regard to the competition, as far as PCBA and box build manufacturing for EMS type of business, we are the main suppliers in India. We are their first major supplier in India. Our main competition is in Southeast Asia, basically in Malaysia. There is nobody, I would say, in India that we would directly be competing as far as the EMS business is concerned. Having said that, they are adding other parts of the supply chain, so there are other good companies that have been benefiting from the general shift that they are looking in terms of increasing their overall spend and sourcing from India.

Speaker #1: Sorry to interrupt you, management. Again, your voice is breaking.

Operator: Sorry to interrupt you, management. Again, your voice is breaking.

Speaker #2: Yeah, so I was saying that with regard to the competition, as far as PCBA and box-build manufacturing for EMS-type of business, we are the main supplier in India.

Nikhil Mallavarapu: I was saying that with regard to the competition, as far as PCBA and box build manufacturing for EMS type of business, we are the main suppliers in India. We are their first major supplier in India. Our main competition is in Southeast Asia, basically in Malaysia. There is nobody, I would say, in India that we would directly be competing as far as the EMS business is concerned. Having said that, they are adding other parts of the supply chain, so there are other good companies that have been benefiting from the general shift that they are looking in terms of increasing their overall spend and sourcing from India.

Speaker #2: We are their first major supplier in India. Our main competition is in Southeast Asia, basically in Malaysia. So, there's nobody I would say in India that we would directly be competing with as far as the EMS business is concerned.

Speaker #2: Having said that, they are adding other parts of the supply chain, and so there are other good companies that have been benefiting from the general shift that they are looking at in terms of increasing their overall spend and sourcing from India.

Speaker #3: Understood. So, are we also in talks with some other semiconductor clients for similar products, or are we unable to supply similar products to their competition—basically, the customers' competition?

Karan Sanwal: Understood. Also, are we in talks with some other semiconductor client for similar products, or we cannot supply similar products to their competition, basically, the customer's competition? How is our understanding over there?

Speaker #3: How is the understanding over there?

Speaker #2: So, first of all, in the EMS business, the design and the IP of the product belong to the customer. So, we are not allowed to sell the same product to other players in the space.

Nikhil Mallavarapu: First of all, in the EMS business, the design and the IP of the product belongs to the customer. We are not allowed to sell the same product to other players in the space. Having said that, we are in some preliminary-level discussions with other customers also, who are looking at India as a supply base as part of their sourcing and supply chain strategy. But that is still at an early stage. We will update that as we progress.

Speaker #2: Having said that, we are in some preliminary-level discussions with other customers also, who are looking at India as a supply base as part of their sourcing and supply chain strategy.

Speaker #2: But that's still at an early stage. We will update that as we progress.

Speaker #3: Understood. One last question.

Speaker #1: Thank you. Karan, sorry to interrupt. Can I request you to come back for a follow-up, please? Thank you. Next question is from the line of Alok Shah from Shree PMS.

Karan Sanwal: Understood. One last question.

Nikhil Mallavarapu: Thank you. Karan Soity from Troy. Can I request you to come back for a follow-up, please? Thank you. The next question is from the line of Alok Shah from SRE PMS. Please go ahead.

Operator: Thank you. Karan Soity from Troy. Can I request you to come back for a follow-up, please? Thank you. The next question is from the line of Alok Shah from SRE PMS. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Hello, I'm Amanibal. Thank you. Yes, sir, I had two questions. First is that, can you throw some light on how India is evolving in the space industry?

Alok Shah: Hello, am I audible?

Nikhil Mallavarapu: Yes.

Operator: Yes.

Nikhil Mallavarapu: Yes.

Alok Shah: Thank you. Yes. Sir, I have two questions. First is that can you throw some light that how India is evolving into the space industry, and what are the opportunities that ISRO can give us in next two to three or four years? My second question is, the space-based surveillance program that was initiated during Operation Sindoor, I think. So, where it is now, what is the opportunity we will get, and can you throw some light on that also, sir? Thank you. Thanks.

Speaker #4: And what are the opportunities that ISRO can give us in the next two to three or four years? And my second question is, the space-based surveillance program that was initiated during Operation Sindhur, I think so.

Speaker #4: So, where it is now, what is the opportunity we will get? And can you throw some light on that also, sir? Thank you. Thanks.

Speaker #2: Yeah, thank you. The space opportunity is quite an exciting one, I would say. We have been in the space now for over 25 years, or close to 25 years.

Nikhil Mallavarapu: Thank you. The space opportunity is quite an exciting one, I would say. We have been in the space now for over 25 years or close to 25 years, and gradually moved along the value chain from doing niche components to modules to subsystems to now building complete payloads. Our objective is to go further also into satellite integration and so on, as we move forward. In terms of the broader ecosystem, I think there has been a lot of positive development in the form of startups coming with very good and innovative solutions. You all must have recently seen the success of the Skyroot launch vehicle, I think, which is a major milestone for the country. There is clearly a lot of innovation. There is clearly, from a demand perspective also, a need coming in from various different end-use applications.

Speaker #2: And Grant moved along the value chain, from doing niche components to modules, to subsystems, to now building complete payloads. And our objective is to go further also, into satellite integration and so on as we move forward.

Speaker #2: In terms of the broader ecosystem, I think there's been a lot of positive development in the form of startups coming up with very good and innovative solutions.

Nikhil Mallavarapu: In terms of the broader ecosystem, I think there has been a lot of positive development in the form of startups coming with very good and innovative solutions. You all must have recently seen the success of the Skyroot launch vehicle, I think, which is a major milestone for the country. There is clearly a lot of innovation. There is clearly, from a demand perspective also, a need coming in from various different end-use applications.

Speaker #2: You all must have recently seen the success of the Skyroot launch vehicle, I think, which is a major milestone for the country. So, there is clearly a lot of innovation.

Speaker #2: There's clearly, from a demand perspective also, a need coming in from various different end-use applications. As far as we are concerned, the major end applications that we are addressing today are largely for defense and military requirements.

Nikhil Mallavarapu: As far as we are concerned, the major end applications that we are addressing today are largely for defense and military requirements. There are also certain contributions that go into scientific missions and some communication kind of equipment also. With regard to your question regarding the SBS program, this is moving well. We have started to book some good orders from this program, and we expect in this year that we will have a very strong order intake coming from this program, essentially. We are quite positive about that. Apart from that, we are also executing a major program for payloads, electronic warfare-based payloads. Not specifically part of SBS program, but very closely aligned with it. We expect those also, once delivered, will have repeat requirements in the coming years as well.

Speaker #2: But there are also certain contributions that go into scientific missions, and some communication kind of equipment also. And with regard to your question regarding the SBS program, this is moving well.

Speaker #2: We have started to book some good orders from this program, and we expect that, this year, we will have a very strong order intake coming from this program, essentially.

Nikhil Mallavarapu: We have started to book some good orders from this program, and we expect in this year that we will have a very strong order intake coming from this program, essentially. We are quite positive about that. Apart from that, we are also executing a major program for payloads, electronic warfare-based payloads. Not specifically part of SBS program, but very closely aligned with it. We expect those also, once delivered, will have repeat requirements in the coming years as well.

Speaker #2: So we are quite positive about that. And apart from that, we are also executing a major program for payloads or electronic warfare-based payloads. Not specifically part of the SBS program, but very, very closely aligned with it.

Speaker #2: And we expect those also, once delivered, will have repeat requirements in the coming years as well.

Speaker #4: Okay, sir. Thank you. Yes.

Alok Shah: Okay, sir. Thank you. Yes.

Speaker #1: Thank you. The next question comes from the line of Harish Subramanian with Unifi Capital Private Limited. Please go ahead.

Operator 1: Thank you. Next question comes from the line of Harish Subramanian with UniFi Capital Private Limited. Please go ahead.

Operator: Thank you. Next question comes from the line of Harish Subramanian with UniFi Capital Private Limited. Please go ahead.

Speaker #4: Hi. Good afternoon, Nikhil. Good afternoon, Sundar. My question was on the VTS segment where the order book has inched up over time. So what does the revenue mix is concerned?

Harish Subramanian: Hi. Good afternoon, Nikhil. Good afternoon, Sundar. My question was on the BTS segment, where the order book has inched up over time. As far as the revenue mix is concerned, do you see it sustainably move beyond the 70/30 sort of a ratio, much in favor of BTS in a sustainable manner? That was the first question.

Speaker #4: Do you see it sustainably move beyond the 70:30 sort of a ratio? How much in favor of VTS, in a sustainable manner? So, that was the first question.

Speaker #2: Got it. Thanks, Harish, for the question. So, I think we may, fundamentally—first of all, we are seeing strong growth happening in both businesses.

Nikhil Mallavarapu: Got it. Thanks, Harish, for the question. I think fundamentally, first of all, we are seeing strong growth happening in both businesses. We may see in one year, maybe in the very short term, one year or two years, we may have slightly little bit higher contribution from the BTS. But I would not say it is hugely different. We may have, instead of 70-30 split, it may marginally be favorable towards the BTS side, but again, not hugely, drastically different from a split standpoint.

Speaker #2: We may see in one year, maybe in the very short term—one year or two years—you may have slightly a little bit higher contribution from the VTS.

Speaker #2: But I would not say it is hugely different. I mean, we may have, instead of a 70/30 split, it may marginally be favorable towards the VTS side.

Speaker #2: But again, not hugely, drastically different from a split standpoint.

Speaker #4: Okay, another one on the revenue growth. You'd said that the medium-term target in terms of revenue growth for India business is at 25% plus. But for this year, do you think you will still maintain that, or will it be anything less than 25% in terms of revenue growth?

Harish Subramanian: Okay. Another one on the revenue growth. You would say that medium-term target in terms of revenue growth for India business is at 25% plus. But for this year, do you think you will still maintain that, or will that be anything less than 25% in terms of revenue growth?

Speaker #2: We will, Harish. We are confident of reaching that 25% level, and we'll maintain that for now. We don't see any reason to change it significantly based on the order book trend and the projects that are under execution.

Sundararajan Parthasarathy: Harish, we are confident of reaching that 25% level, and we will maintain that for now. We do not see any reason to change it significantly based on the order book trend and the project set on the execution.

Speaker #2: Yeah.

Speaker #4: Okay, understood. Just one last question from me on the revenue that you mentioned.

Harish Subramanian: Okay, that is it. Just last question from me on the new wins that you mentioned.

Speaker #2: Yeah. Please go ahead.

Speaker #4: Yeah. The last question on the new wins that you mentioned, on aerospace and defense applications, the complex test systems—if you can talk a bit more on that and what it can open up.

Nikhil Mallavarapu: Apologies.

Harish Subramanian: Yeah, please go ahead. The last question on the new wins that you mentioned on aerospace and defense application, the complex test systems. If you can talk a bit more on that and what it can open up.

Speaker #2: Yeah, this is a part of what we deliver to our export customers. It's part of our, I would say, value-added engineering service offering that we give to our EMS customers.

Nikhil Mallavarapu: This is a part of what we deliver to our export customers. It is part of our, I would say, value-added engineering service offering that we give to our EMS customers. So it was roughly about, I think, 55 odd crore order that we received from this export customer for this program. I would say the nature of this business is it is a test bench or a test system is not always a recurring type of revenue. They are based on application specific or they come up from time to time. So it is, I would say, volatile in terms of demand. You have certain years where you have high order intake and certain others which are lower. But this one is a particularly substantial one that we received, and we continue to offer this as a solution to differentiate ourselves with our major customers.

Speaker #2: This is so it was a roughly about, I think, 55-odd crore order that we received from this export customer for this program. I would say these are the nature of this business is it is a test bench or a test system is not always a recurring type of revenue.

Speaker #2: They are based on application-specific needs or they come up from time to time. So, I would say it is volatile in terms of demand. You have certain years where you have high order intake, and others which are lower.

Nikhil Mallavarapu: They are based on application specific or they come up from time to time. So it is, I would say, volatile in terms of demand. You have certain years where you have high order intake and certain others which are lower. But this one is a particularly substantial one that we received, and we continue to offer this as a solution to differentiate ourselves with our major customers. And it has a small revenue contribution. I would not say from a revenue standpoint, it is going to make a big impact in terms of the future prospects for the company.

Speaker #2: But this one is a particularly substantial one that we received, and we continue to offer this as a solution to differentiate ourselves with our major customers.

Speaker #2: And it has a small revenue contribution. I would not say, from a revenue standpoint, it's going to make a big impact in terms of the future prospects for the company.

Nikhil Mallavarapu: And it has a small revenue contribution. I would not say from a revenue standpoint, it is going to make a big impact in terms of the future prospects for the company.

Speaker #4: Sure. Okay. Thank you, Nikhil. Thank you, Sundar.

Speaker #2: Thank you, Nikhil. Thank you, Sundar.

Harish Subramanian: Sure. Okay. Thank you, Nikhil. Thank you, Sandeep.

Speaker #3: Thanks, Harish.

Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Diya Jan with Sapphire Capital.

Sundararajan Parthasarathy: Thank you, Harish.

Operator 2: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Diya Jain with Sapphire Capital. Please go ahead.

Operator: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Diya Jain with Sapphire Capital. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Hello, thank you for the opportunity. Can you provide any guidance for FY27 and FY28 in terms of revenue and margins? Also, how is the split between export and domestic expected to evolve going forward?

Diya Jain: Hello, sir. Thank you for the opportunity. Can you provide any guidance for FY27 and FY28 in terms of revenue and margins? Also, how the split of export and domestic is going to be going forward?

Deeya Jain: Hello, sir. Thank you for the opportunity. Can you provide any guidance for FY27 and FY28 in terms of revenue and margins? Also, how the split of export and domestic is going to be going forward?

Speaker #2: Yeah.

Speaker #3: Yes, yeah. So we still maintain a similar trend of about 25% revenue growth for this year. And for next year also, that's the visibility that we see as of now.

Sundararajan Parthasarathy: Yes. We still maintain the similar trend of about 25% on the revenue growth for this year and for next year also. That is the visibility that we see as of now. The margins, last year we reported about 12.5%. We are aiming to move it up and above about 13%, and that could remain stable or slightly improve in the next year. Of course, it is too early to comment on the next year. We need to look at the order profile as we keep booking the orders during the year. In terms of our export composition, I think it will still remain in the order of about 50% to 55% or even maybe higher, given the orders that we see on the growth that we see in EMS. It could be in the same range also. Nothing much expected to change.

Speaker #3: And the margins last year, we reported about 12.5%. We are aiming to move it to above about 13%. And that could remain stable or slightly improve in the next year.

Speaker #3: But of course, it's too early to comment on next year. We need to look at the order profile as we keep booking orders during the year.

Sundararajan Parthasarathy: We need to look at the order profile as we keep booking the orders during the year. In terms of our export composition, I think it will still remain in the order of about 50% to 55% or even maybe higher, given the orders that we see on the growth that we see in EMS. It could be in the same range also. Nothing much expected to change.

Speaker #3: And in terms of our export composition, I think it will still remain in the range of about 50 to 55 percent, or even slightly higher.

Speaker #3: Given the orders that we see and the growth that we see in EMS, it could be in the same range also. Not expecting much to change.

Speaker #5: Okay. So, thank you, and all the best.

Diya Jain: Okay, sir. Thank you and all the best.

Deeya Jain: Okay, sir. Thank you and all the best.

Speaker #1: Thank you.

Speaker #3: Thank you.

Speaker #1: Our next question comes from the line of Dashan Gala with Gala Investment, as a follow-up question. Please go ahead.

Sundararajan Parthasarathy: Thank you.

Operator 2: Thank you. Our next question comes from the line of Darshan Gala with Gala Investment. As a follow-up question, please go ahead.

Operator: Thank you. Our next question comes from the line of Darshan Gala with Gala Investment. As a follow-up question, please go ahead.

Speaker #6: No, no. My questions have already been answered. Thank you.

Speaker #1: Thank you. Anyone who wishes to ask a question may press star and one. Our next question comes from the line of Vineet Khana, an individual investor.

Darshan Gala: No, no, my questions have already been answered. Thank you.

Operator 2: Thank you. Anyone who wishes to ask a question may press star and one. Our next question comes from the line of Vineet Khanna, an individual investor. Please go ahead.

Operator: Thank you. Anyone who wishes to ask a question may press star and one. Our next question comes from the line of Vineet Khanna, an individual investor. Please go ahead.

Speaker #1: Please go ahead.

Speaker #6: Hi. Am I audible?

Speaker #1: Yes, sir. You are.

Speaker #6: Yes. Yeah. So Nikhil, question for you: in previous calls, you have updated or shared details about some of the VTS-related initiatives you have done.

Vineet Khanna: Hi, am I audible?

Operator 2: Yes, sir, you are.

Operator: Yes, sir, you are.

Sundararajan Parthasarathy: Yes.

Nikhil Mallavarapu: Yes.

Vineet Khanna: Yeah. Nikhil, question for you. In the previous calls, you have updated or shared details about some of the BTS-related initiatives you have done. In particular, the one which you had done for Virupaksha, the second one being recent win you had for the helicopter platform for AESA radar. Another initiative was with, I think, Garden Reach Shipbuilders & Engineers, where some upgrade was there for the electronics subsystems. Can you just provide a current update in terms of where we stand with respect to these?

Speaker #6: In particular, the one which you had done for Virupaksha, the second one being a recent one you had for the helicopter platform for AESA radar.

Speaker #6: And another initiative was with, I think, Garden Reach Shipbuilders, where some upgrade was there for the electronic subsystems. Can you just provide a current update in terms of where we stand with respect to these?

Speaker #2: Yeah, sure. Thanks. Thanks for the question, Vineet. So, yeah, we're quite excited and making good progress on all of these programs. So, with both the Virupaksha and the UHM programs, these are development programs.

Nikhil Mallavarapu: Yes, sure. Thanks for the question, Vineet Khanna. We are quite excited, making good progress on all of these programs. With both the Virupaksha and the UHM programs, these are development programs. We have completed, I would say, the first phase. On the UHM, at least, we have completed the first phase of the design reviews and so on. We are well underway in terms of the realization of the first prototypes for the program. Things are moving well, and we expect to have these first protos in the next year successfully demonstrated to the customer, and subsequently deliver the order. After which, we will be waiting for HAL to look at the serial production quantities. In short, it is progressing well. Virupaksha also, we are in the design of the product.

Speaker #2: So we have completed, I would say, the first phase on the UHM. At least, we've completed the first phase of the critical, or the design reviews, and so on.

Speaker #2: And we are in the well underway in terms of the realization of the first prototypes for the program. So things are moving well. And we expect to have these to have these first protos in the next year successfully demonstrated to the customer.

Nikhil Mallavarapu: We are well underway in terms of the realization of the first prototypes for the program. Things are moving well, and we expect to have these first protos in the next year successfully demonstrated to the customer, and subsequently deliver the order. After which, we will be waiting for HAL to look at the serial production quantities. In short, it is progressing well. Virupaksha also, we are in the design of the product.

Speaker #2: And subsequently deliver the order, after which we will be waiting for HAL to look at the serial production quantities. So, in short, it's progressing well.

Speaker #2: Virupaksha, also we are in the design of the product. We expect to have those development orders completed, maybe in Q4 or Q1 of the next year—Q4 or Q1.

Nikhil Mallavarapu: We expect also to have those development orders completed maybe Q4 or Q1 of the next Q4 or Q1. With the Takhan system also, similar progress in terms of the delivery and the development. This is a technology partnership that we have established, so that doesn't involve a significant amount. There is some localization design engineering work that is being done, which is actually an important part of the development effort here. But it is progressing well, and this again, in the beginning of next year, we expect to have the first deliveries done. Also we are very closely monitoring or waiting some further orders for this system in the coming one or two quarters.

Speaker #2: And with the Takan system also, similar progress in terms of the delivery and the development. This is a technology partnership that we've established, so it doesn't involve a significant amount.

Speaker #2: There is some localization design engineering work that is being done, which is actually an important part of the development effort here, but it is progressing well.

Nikhil Mallavarapu: There is some localization design engineering work that is being done, which is actually an important part of the development effort here. But it is progressing well, and this again, in the beginning of next year, we expect to have the first deliveries done. Also we are very closely monitoring or waiting some further orders for this system in the coming one or two quarters.

Speaker #2: And this, again, in the beginning of next year, we expect to have the first deliveries done. Also, we are very closely monitoring and awaiting some further orders for this system.

Speaker #2: In the coming one or two quarters.

Speaker #6: Okay, thanks, Nikhil. Just a follow-up—I think there was some discussion on previous calls about direct engagement with the armed forces. So far, our engagements are mostly with the defense PSUs, or DRDO and ISRO.

Vineet Khanna: Okay. Thanks, Nikin. Just to follow up on, I think there was some discussion, previous calls, about direct engagement with armed forces. So far our engagements are mostly with the different PSUs or DRDO and ISRO. How are we tracking on direct engagements, or are there opportunities which are emerging in that space?

Speaker #6: How are we tracking on direct engagements? Or are there opportunities emerging in that space?

Speaker #2: Yes, so those are also progressing well. I mean, even when we talk about some of these system-level opportunities, although our direct customer may be a PSU like HAL or GRSC and so on, these systems are very critical to the platform and its capabilities.

Nikhil Mallavarapu: Yes. So those also are progressing well. When we talk about some of these system-level opportunities, although our direct customer may be a PSU like HAL or Garden Reach Shipbuilders & Engineers and so on, these systems are very critical to the platform and capability. But beyond that as well, we are also in the various levels of discussion and answering RFIs and so on full system kind of opportunities with the armed forces directly.

Speaker #2: So, there is already an enhanced level of engagement that we are having with the end users. But beyond that as well, we are also in various levels of discussion and answering RFIs, and so on, on full-system kind of opportunities with the armed forces directly.

Speaker #6: Yeah. Thanks so much.

Speaker #2: So, I would say they're in progress, but we will update as and when they come to a higher level of maturity.

Vineet Khanna: Yeah. Thank you so much.

Nikhil Mallavarapu: These are, I would say they are in progress, but we will update as and when they come to a higher level of maturity.

Speaker #6: Yeah, thank you. Just one last one. From your side, you highlighted the four bullet points in the BTS section of the slide.

Vineet Khanna: Yeah. Thank you. Just one last one is on, from your side, you highlighted the four bullet points in the BTS section of the slide. Is there anything which you want to share in terms of something new which is happening, which probably your slide is not capturing? You are doing some work which potentially is something or seeding something which has some potential. Just share some color on if something is not captured in that slide, which you want to share maybe verbally.

Speaker #6: Is there anything that you want to share in terms of something new that is happening, which probably a slide has not captured? Are you doing some work which potentially is something or seeding something which has some potential?

Speaker #6: I mean, just share some color on if something is not captured in the slides that you want to share, maybe verbally.

Speaker #2: No, I think there's a lot happening on this side of the business—much more than we can capture, I would say, in four bullet points.

Nikhil Mallavarapu: No. I think there is a lot happening in this side of the business, that much more than we can capture, I would say, in four bullet points. But I would say there is clearly a major ramp-up that we are doing in terms of engineering team and capability across different skill sets, and also focused more on the objective of our system integration kind of system of integration objective. So we are bringing in new talent and people that will enable us to get there and also to ensure that we are executing and delivering these new programs and answering other new opportunities to the right level of satisfaction of the customers. So, I would say at a high level, that is the main thing I would maybe add or add colors to what is actually happening.

Speaker #2: But I would say there's clearly a major ramp-up that we are doing in terms of the engineering team and capability, across different skill sets, and also focused more on the objective of our system integration kind of objective.

Speaker #2: So, we are bringing in new talent and people that will enable us to get there, and also to ensure that we are executing and delivering these new programs, as well as addressing other new opportunities, to the right level of satisfaction for the customers.

Nikhil Mallavarapu: So we are bringing in new talent and people that will enable us to get there and also to ensure that we are executing and delivering these new programs and answering other new opportunities to the right level of satisfaction of the customers. So, I would say at a high level, that is the main thing I would maybe add or add colors to what is actually happening.

Speaker #2: So I would say, at a high level, that's the main thing I would maybe add, or add color to what's actually happening.

Speaker #6: Thank you so much. All the best.

Vineet Khanna: Thank you so much. All the best.

Speaker #2: Thank you.

Speaker #1: Thank you. Anyone who wishes to ask a question may press star and one. Anish, the next question comes from the line of Preet Gopani with Unique PMS.

Nikhil Mallavarapu: Thank you.

Operator 2: Thank you. Anyone who wishes to ask a question may press star and one. Our next question comes from the line of Preet Gopani with Unique PMS. Please go ahead.

Operator: Thank you. Anyone who wishes to ask a question may press star and one. Our next question comes from the line of Preet Gopani with Unique PMS. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Oh, hi team. Thanks for the opportunity. Most of my questions have been answered. I just have one question in continuation with the last participant.

Preet Gopani: Hi, team. Thanks for the opportunity. Most of my questions have been answered. I just have one question in continuation with the last participant. In your AGM yesterday, you had alluded that we are trying to work with a global customer in the BTS space and the opportunity is not far away. Can you just elaborate a little bit on that? How big of a business can global BTS be for us?

Speaker #3: So, in your AGM yesterday, you alluded that we are trying to work with a global customer in the BTS space, and the opportunity is not far away.

Speaker #3: So, can you just elaborate a little bit on that? How big of a business can global BTS be for us?

Speaker #2: I mean, this is a specific opportunity that we were talking about with regard to BTS for an export customer, specifically around electronic warfare. So this is, I would say, a beginning for us.

Nikhil Mallavarapu: This is a specific opportunity that we were talking about with regard to BTS for an export customer, specifically around electronic warfare. This is, I would say, beginning for us. There are various levels of discussion happening with various different customers. It is a little bit early to quantify what it could be in several years. But I think there is clearly a need and a demand for this, and as we close some of these opportunities, they will have a meaningful contribution, both in terms of revenue and margin to the overall business.

Speaker #2: There are various levels of discussion happening with different customers. So, I'd say it's a little bit early to quantify what it could be in several years.

Speaker #2: But I think there is clearly a need and a demand for this, and as we close some of these opportunities, they will have a meaningful contribution both in terms of revenue and margin to the overall business.

Speaker #3: Okay. But on a broader level, once businesses like this—so let's say global BTS—start contributing to our P&L, do you think that it will be at a higher margin than the BTS that we do here?

Preet Gopani: Okay. On a broader level, once businesses like this, let us say global BTS, starts contributing to our P&L, do you think that it will be at a higher margin than the BTS that we do here, the domestic BTS business?

Speaker #3: The domestic BTS business?

Speaker #2: No, I would say we're still talking about targeting around the 20-plus percent kind of margin profile. But the main difference, which is the reason why we like the export BTS business in some of these cases, is that they are not all tender-based.

Nikhil Mallavarapu: No, I would say probably still targeting around that 20-plus percent kind of margin profile. But the main difference, which is the reason why we like export BTS business in some of these cases, is that they are not all tender-based. It is not a L1 type of business where it is zero or one. They typically have a relationship with a customer that you can come to a reasonable agreement on some of these things. That is what we like about some of these export kinds of opportunities. Of course, once these systems that we have built, whether it is like the one that we are doing for the UHM or some of the other products that we are developing, there will be major demand for those type of equipment and systems for overseas customers. We have not yet come to a stage where we are answering opportunities because we are still at the development stage.

Speaker #2: It's not an L1 type of business where it's zero or one. They typically have a relationship with the customer, and you can come to a reasonable agreement on some of these things.

Speaker #2: So, that's what we like about some of these export kind of opportunities. Of course, once these systems that we have built—whether it's like the one that we're doing for the UHM, or some of the other products that we're developing—there will be major demand for those types of equipment and systems from overseas customers.

Nikhil Mallavarapu: Of course, once these systems that we have built, whether it is like the one that we are doing for the UHM or some of the other products that we are developing, there will be major demand for those type of equipment and systems for overseas customers. We have not yet come to a stage where we are answering opportunities because we are still at the development stage. But when those come, which are system-level opportunities for exports, yes, those can absolutely have a higher level of margin profile, even beyond this.

Speaker #2: We have not yet come to a stage where we are answering opportunities because we're still at the development stage. But when those come, which are system-level opportunities for exports, yes, those can absolutely have a higher level of margin profile—even beyond this.

Nikhil Mallavarapu: But when those come, which are system-level opportunities for exports, yes, those can absolutely have a higher level of margin profile, even beyond this.

Speaker #3: Perfect. Perfect. Thank you so much. All the very best.

Preet Gopani: Perfect. Thank you so much. All the very best.

Speaker #2: Thank you.

Speaker #1: Thank you. Anish, the next question comes from the line of Aloksha with SRE PMS. Please go ahead.

Nikhil Mallavarapu: Thank you.

Operator 2: Thank you. Our next question comes from the line of Alok Shah with SRE PMS. Please go ahead.

Operator: Thank you. Our next question comes from the line of Alok Shah with SRE PMS. Please go ahead.

Speaker #6: Yeah. Also, just one last question. We had executed a groundbreaking ceremony at KIADB Aerospace Target, Bangalore, Ushol. Can you let me know what is the status?

Alok Shah: Yeah. Sir, just one last question. We had executed a groundbreaking ceremony at KIADB Aerospace Park at Bangalore. Can you let me know what is the status? Have we started construction of the facility? Secondly, what is the CapEx plans for this year and next year? Thank you.

Speaker #6: Have we started construction of the facility? And secondly, what are the Capex plans for this year and next year? Thank you.

Speaker #2: Sure. So, for this one, the design stage is complete and we'll be starting the construction soon. However, this land belongs to another group company, a Private Limited Company.

Sundararajan Parthasarathy: Sure. This one, the design stage is complete, and we will be starting the construction soon. However, the land belongs to another group company, private limited company. We do not have to invest anything from Centum Electronics in this year. Next year, once the bare shell is ready, as we start building the factory and all the MEP HVAC systems and so on, and clean room, dry room, watering plant, machinery, and so on, towards the end of next fiscal, the CapEx flow could start. On the whole, high-level estimate is about, I can say, anywhere between INR 15 crores and INR 70 crores, but we will get to know more as we do the budgeting for the next fiscal. We will update you.

Speaker #2: So we don't have to invest anything from Centum Electronics in this year. So next year, once the shell is ready, as we start building the factory and all the MEP, HVAC systems, and so on, and clean room, dry room ordering, plant machinery, and so on, that towards the end of next fiscal, the Capex flow could start.

Sundararajan Parthasarathy: Next year, once the bare shell is ready, as we start building the factory and all the MEP HVAC systems and so on, and clean room, dry room, watering plant, machinery, and so on, towards the end of next fiscal, the CapEx flow could start. On the whole, high-level estimate is about, I can say, anywhere between INR 15 crores and INR 70 crores, but we will get to know more as we do the budgeting for the next fiscal. We will update you.

Speaker #2: And on the whole, the high-level estimate is about, I can say, anywhere between ₹50 to ₹70 crores. But we will get to know more as we do the budgeting for the next fiscal.

Speaker #2: We'll update.

Speaker #6: Okay, sir. Thanks. Thank you so much.

Alok Shah: Okay, sir. Thanks. Thank you so much, sir.

Speaker #1: Thank you. Anish, the next question comes from Ashit Koti, an individual investor. Please go ahead.

Operator 2: Thank you. Our next question comes from the line of Asit Koticha with an individual investor. Please go ahead.

Operator: Thank you. Our next question comes from the line of Asit Koticha with an individual investor. Please go ahead.

Speaker #6: Thank you, sir. Thank you, sir, for the opportunity. I just wanted to understand, with regards to the various opportunities available, where do we stand vis-à-vis the competition and major competitors, like in different areas?

Asit Koticha: Thank you, sir. Thank you, sir, for the opportunity. Just wanted to understand with regards to various opportunities available, where do we stand vis-à-vis competition, major competitors, like in different areas where we are operating? Hello?

Speaker #6: Where we are operating? Hello.

Speaker #2: Yeah, I would speak about specific competitors. But I would say, broadly, we have two businesses which we have described: EMS and the domestic Defense and Space Products, or BTS business.

Nikhil Mallavarapu: Yeah. I would speak about specific competitors. I would say broadly, we have two businesses which we have described, EMS and the domestic defense and space products or BTS business. We have different sets of competitors for each of these business. They are not the same. I would say, with regard to our positioning, I think there are certain areas, especially if you talk about the BTS side of the business, where we in certain areas, especially things like space, where we are, I would say, quite ahead in terms of our capability and history in the domain. We are making very good and strong progress from a systems perspective on things like radar and EW. There are some competitors that have been there, maybe a little bit ahead of us.

Speaker #2: We have different sets of competitors for each of these businesses. They are not the same. And I would say with regard to our positioning, I think there are certain areas, especially if you talk about the BTS side of the business, where we in certain areas, especially things like space, where we are I would say quite ahead.

Nikhil Mallavarapu: I would say, with regard to our positioning, I think there are certain areas, especially if you talk about the BTS side of the business, where we in certain areas, especially things like space, where we are, I would say, quite ahead in terms of our capability and history in the domain. We are making very good and strong progress from a systems perspective on things like radar and EW. There are some competitors that have been there, maybe a little bit ahead of us.

Speaker #2: In terms of our capability and history in the domain, we are making very, very good and strong progress from a systems perspective on things like radar and EW, where there are some competitors that may have been there and are maybe a little bit ahead of us.

Speaker #2: But from a capability standpoint, I think we are quite, I would say, on par in these areas. On the EMS side of the business also, I think we have certain segments and differentiators, especially when it comes to export customers, some unique manufacturing requirements, and supply chain complexity.

Nikhil Mallavarapu: But from a capability standpoint, I think we are quite, I would say, on par in these areas. On the EMS side of the business also, I think we have certain segments and differentiators, especially when it comes to export customers. Some unique manufacturing requirements, supply chain complexity, these are all things that I think we understand quite well. We consistently see that when we work with these customers that they have a strong preference to work with us. I think on certain areas when it comes to very high volume type of business, things like consumer electronics and so on, that is not our cup of tea. Our competitors have set up an ecosystem much more aligned in tune for those type of segments. That is in short, yeah.

Speaker #2: These are all things that I think we understand quite well, and we consistently see that when we work with these customers, they have a strong preference to work with us.

Nikhil Mallavarapu: We consistently see that when we work with these customers that they have a strong preference to work with us. I think on certain areas when it comes to very high volume type of business, things like consumer electronics and so on, that is not our cup of tea. Our competitors have set up an ecosystem much more aligned in tune for those type of segments. That is in short, yeah.

Speaker #2: I think on certain areas, maybe when it comes to very high-volume type of business—things like consumer electronics and so on—that's probably where it's not our cup of tea, or competitors have a setup and ecosystem much more aligned and tuned for those types of segments.

Speaker #2: That's in short. Yeah.

Speaker #6: Reason why this question was companies like Astra or Databet and a couple of other players which are specializing in are they ahead of us?

Asit Koticha: Reason why this question was like companies like Astra Microwave Products or Data Patterns and a couple of other players which are specializing, are they ahead of us?

Speaker #2: Yeah, so as I mentioned, there are two things. One is, there are areas where we are ahead compared to them—space and so on.

Nikhil Mallavarapu: As I mentioned, there are two things. One is there are areas that we are ahead compared to them, like space and so on. There are other areas where they have been in the business for, or in these specific domains at least, for longer than us. But from a capability standpoint, as I mentioned, we are, I would say, quite close to being on par.

Speaker #2: There are other areas where they have been in the business for, or in these specific domains at least, for longer than us. But from a capability standpoint, as I mentioned, we are, I would say, quite close to being on par.

Speaker #6: Okay.

Speaker #2: These are the competitors that we did on with very various projects. I mean, as I mentioned, even on the UHM program, when we had qualified for that, there were several—there were more than 10 bidders who were interested to participate.

Asit Koticha: Okay, sir. Thank you.

Nikhil Mallavarapu: These are the top competitors that we bid on with various projects. As I mentioned, even on the UHM program, when we had qualified for that, there was more than 10 bidders who were interested to participate, but only three shortlisted, and of which we were ahead one. I would say some of these are good case studies in terms of proof or case. We have proof in point in terms of capability recognition.

Speaker #2: But only three were shortlisted, and out of those, we were L1. So, I would say some of these are good case studies in terms of proof, or as a case in point, in terms of capability.

Speaker #2: Recognition.

Speaker #6: So, who were the other two?

Speaker #2: I cannot disclose that.

Asit Koticha: Sir, who were other two?

Speaker #6: Okay, sir. Thanks a lot.

Nikhil Mallavarapu: I cannot disclose that.

Speaker #1: Thank you. Ladies and gentlemen, that was the last question for today. I now end the conference and hand over to the management for the closing remarks.

Asit Koticha: Okay, sir. Thanks a lot.

Operator 2: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

Operator: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

Speaker #1: Thank you, and over to your team.

Speaker #2: Sure.

Speaker #6: Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and, at the same time, offer insights into our business.

Sundararajan Parthasarathy: Sure. Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please do reach out to our investor relation managers at Valorum Advisors. Thank you. Thank you, Joseph.

Speaker #6: If you have any further questions or would like to know more about the company, please do reach out to our Investor Relations managers at Valorum Advisors.

Speaker #6: Thank you. Thank you, Jose.

Speaker #1: Thank you so much, sir.

Speaker #6: Thank you so much, sir.

Operator 2: Thank you so much, sir. Ladies and gentlemen, on behalf of Centum Electronics, that concludes today's conference. Thank you for joining us and you may now disconnect your lines.

Operator: Thank you so much, sir. Ladies and gentlemen, on behalf of Centum Electronics, that concludes today's conference. Thank you for joining us and you may now disconnect your lines.

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Q1 2027 Centum Electronics Ltd Earnings Call

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Centum Electronics

Earnings