Astra Microwave Products Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Astra Microwave reported a strong Q2 FY26 with healthy margins and robust order book growth, driven by domestic defense sector demand. The company outlined an ambitious long-term vision to double its turnover in 3-4 years and become a $1 billion company, backed by a strong pipeline of projects like QRSAM, Uttam radars, and Su-30 upgrades. While facing minor challenges in space projects and competitive counter-drone bids, management expressed confidence in execution and continued working capital improvement.

Highlights

  • Q2 FY26 standalone revenue of INR 213 crores with healthy EBITDA margin of 21.7% and PAT of INR 21 crores.

  • H1 FY26 standalone revenue of INR 410 crores, up 7.2% YoY, and PAT grew by 13.5% YoY.

  • Strong standalone order book of INR 1,916 crores and consolidated order book of INR 2,209 crores as of Sep 30, 2025.

  • Successful execution of a major refurbishment order for long-range radar expected to open new opportunities.

  • ARC JVC is performing well, with expected sales of $42 million and order book of $100-120 million by FY26 end.

  • Significant long-term growth vision targeting $1 billion company status and specific revenue targets up to FY30.

Concerns

  • Facing few challenges to complete a couple of space projects.

  • Lost out on some counter-drone bids due to product cost and competitive solutions.

  • Uncertainty around project timelines, as 'time is our only major variable amongst many, that is unclear'.

Key financials

2 periods

Q2 FY26

  • Standalone Revenue
    ₹213 Cr
  • Standalone EBITDA
    ₹46 Cr
  • Standalone EBITDA Margin
    21.7%
  • Standalone PAT
    ₹21 Cr

H1 FY26

  • Standalone Revenue
    ₹410 Cr
    YoY +7.2%
  • Standalone EBITDA
    ₹85 Cr
  • Standalone EBITDA Margin
    20.6%
  • Standalone PAT Growth
    —
    YoY +13.5%

What they filed

Q1 FY27: revenue down 10.7%, net profit down 24.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue229 257 405 197 213 −7%258 +1%487 +20%176 −11%
EBITDA49 75 120 38 46 −6%80 +7%160 +34%33 −14%
Net profit24 39 75 13 21 −15%39 +1%105 +40%10 −24%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹1,916 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹286 Cr

Execution

providing strong visibility for the coming quarters

Composition

  • Domestic Defense (client type)
  • Radar and EW segment (product)

Pipeline

qualified rfp

Negotiations concluded for INR 400 crores plus orders expected to book in Q3. INR 600 crores plus worth of orders planned for Q4. ARC JVC expects $100-120 million order book by FY26 end.

The order book continues to be predominantly domestic, particularly in the defense sector, with strong profit margins due to build-to-spec driven business.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New building for production lines
    A new building is being constructed to take care of these requirements.
  • Liquidity Liquidity disclosed Operating cash flows improved during H1 FY26 due to realization of long-pending receivables, and this positive trend is expected to continue.
    We have also seen a notable improvement in the operating cash flows during the first half of the year, and we expect this positive trend to continue. As a result, the long-pending receivables were realized and hence, the cash flow position has improved.

Guidance & targets

Revenue

  • Overall Turnover Growth Revenue · next 3-4 years · High confidence 2x plus
    we are seeking to build on that foundation, and we have a very good chance of doubling our turnover, 2x plus over the next 3 to 4 years.

    — Atim Kabra

  • FY26 Standalone Revenue Revenue · FY26 · High confidence INR 1,150-1,200 crores
    I think our guidance is for INR1,150 crores to INR1,200 crores, if I'm not wrong. That's our guidance. I think we'll meet it hopefully.

    — Management

  • FY27 Turnover Revenue · FY27 · High confidence INR 1,400-1,500 crores
    I think FY '27 turnover, we shall start seeing revenues from QRSAM project. And we hope to close it somewhere around INR1,400 crores, INR1,500 crores plus/minus INR50 crores range that particular year.

    — Atim Kabra

  • FY28 Turnover Revenue · FY28 · High confidence INR 1,650 crores plus
    And we hope to cross, I would say, somewhere around INR1,650 crores plus/minus again, INR50 crores in FY '28.

    — Atim Kabra

  • FY29 Turnover Revenue · FY29 · High confidence INR 2,000 crores
    And that shall bring us to a very nice number very close to INR2,000 crores at that point in time.

    — Atim Kabra

  • FY30 Turnover Revenue · FY30 · High confidence INR 2,250-2,500 crores
    So, FY '30 should see us somewhere around INR2,250 crores to INR2,500 crores range.

    — Atim Kabra

Profitability

  • Current Year Gross Margins Profitability · FY26 · High confidence maintain what we have delivered now
    Current year, the gross margins will continue to be what we have delivered now. I would say in terms of EBITDA or PBT, we should be able to maintain the margins what we have delivered up to now.

    — Management

  • FY27/FY28 Gross Margins Profitability · FY27, FY28 · High confidence around 45-50%
    So, I have given you for FY '26. Now for the going year FY '27, FY '28 kind of thing, gross margins continue to be around 45% to 50%.

    — Management

Order Inflow

  • Q3 FY26 Order Inflow Order Inflow · Q3 FY26 · High confidence INR 400 crores plus
    concluded negotiations for INR400 crores plus orders, which are expected to book in Q3.

    — M.V. Reddy

  • Q4 FY26 Order Inflow Order Inflow · Q4 FY26 · High confidence INR 600 crores plus
    We plan to book INR600 crores plus worth of orders in Q4.

    — M.V. Reddy

Sales

  • ARC JVC Sales Sales · current year (FY26) · High confidence $42 million
    ARC is in line with the guidance given and expected to book sales of $42 million in the current year.

    — M.V. Reddy

  • Astra Rafael Sales Sales · entire year (FY26) · High confidence INR 250 crores
    INR250 crores for the entire year. That should be the revenue, right? For the entire year, yes.

    — Management

Order Book

  • ARC JVC Order Book Order Book · end of FY26 · High confidence $100-120 million
    ARC has picked up well and expected to book approximately $100 million to $120 million worth of orders by end of FY '26.

    — M.V. Reddy

What to watch in Q3 FY26

Q3 FY26 Order Inflow

next quarter (Q3 FY26)
Current Negotiations concluded for INR 400 crores plus
Target Booking of INR 400 crores plus orders

Why it matters

To verify the company's ability to convert concluded negotiations into booked orders and meet its short-term order inflow targets.

concluded negotiations for INR400 crores plus orders, which are expected to book in Q3.

Risks & concerns

  • Space project execution challenges

    medium

    Facing few challenges to complete a couple of space projects.

    though we are facing few challenges to complete a couple of space projects.

    Management acknowledged

  • Competition in counter-drone market

    medium

    Lost out on some counter-drone bids due to product cost and generic nature, requiring technology optimization.

    Initially, the product what we have developed is basically kind of a generic and a product -- for a few of the customers, it became a bit costly. So hence, we lost out in a couple of cases. But now we are further optimizing this technology.

    Management acknowledged

  • Project timeline uncertainty

    low

    Time is a major variable and can be unclear for project execution.

    I always believe there is time is our only major variable amongst many, that is unclear.

    Management acknowledged

Q&A highlights

7 direct
Export Strategy for Branded Products Direct
We have identified one potential partner. We don't know if the deal is going to happen or not, okay? But these are guys who have been working in that space, etcetera, etcetera. We have multiple ways of collaborating with them. But I think collaboration is the way to go forward, wherein not only will they act as our distributors, but also our technology partners, sourcing technologies, licensing technologies, etcetera, etcetera.

Analyst inquired about the strategy to penetrate export markets with Astra's branded products like Uttam radars and EW Suite, to which management outlined a collaboration-focused approach rather than building from scratch.

Asked by Amit Dixit

Working Capital Days Improvement Direct
Yes. Amit, the days are improving primarily because of some of the critical programs we are able to close it in the first half of the year. As a result, the long-pending receivables were realized and hence, the cash flow position has improved. Going forward also, we see the same trend to continue.

Analyst asked about the target for working capital days, and management confirmed improvement due to receivable realization from critical programs, expecting the trend to continue without giving a specific target number.

Asked by Amit Dixit

$1 Billion Company Target and Capex Needs Partial
Vikash, it is not 5 to 6 years for the $1 billion. Next 3 to 4 years are to cross to exceed quarter billion dollars, okay? But as you know, these programs require years of proactive planning. So today, 3 to 4 years back, we are embarking on multiple strategies, fine-tuning partners, alliances, etcetera, etcetera. ... I don't think it will require honestly in the immediate short term, any significant investment from our side because we have already commissioned our facility in Bangalore to assemble to design and assemble small satellites.

Analyst questioned the timeline and capex required for the $1 billion target. Management clarified the timeline for doubling turnover (3-4 years) and stated that significant short-term capex is not needed due to existing facilities, implying internal accruals will fund growth.

Asked by Vikash Singh

EW Capability Development Direct
Basically, we started our EW journey almost about 20 years back, and we basically started building components and subsystems. And now we started building the systems, especially for the airborne platforms, we started developing in the concurrent designs with DRDO. ... We are slowly building the capability in all broad spectrum of the EW segment.

Analyst asked for insight into Astra's current EW capabilities and development plans. Management explained their long history in EW, progression from components to systems, and ongoing development for airborne applications and across the EW spectrum.

Asked by Vikash Singh

Counter Drone Product Status Direct
On counter drones, let me answer the counter drones, right? On the counter drones, we were L2 in 3 bids. We lost out on them. There are many more opening up. Hopefully, we'll get something, okay? But it's a bid-based process. ... Initially, the product what we have developed is basically kind of a generic and a product -- for a few of the customers, it became a bit costly. So hence, we lost out in a couple of cases. But now we are further optimizing this technology.

Analyst inquired about the status of counter-drone products. Management admitted losing some bids due to product cost and generic nature, but stated they are optimizing technology for more competitive, specialized solutions.

Asked by Keyurkumar Vadaliya

Metrology Product Orders Direct
Yes. Metrology front, we have already bagged a good number of orders. And going forward also, now one contract is almost finalized. We have concluded negotiations. We are expecting orders soon. And also two more tenders we have participated for which TAC is going on.

Analyst asked for an update on metrology products. Management confirmed bagging good orders and expecting more soon, with ongoing negotiations and participation in tenders, positioning themselves as a leading supplier in the Mausam Mission program.

Asked by Keyurkumar Vadaliya

Gross Margin Improvement Reasons Direct
Yes. As we said many times, gross margin is directly related to the product mix that has been sold by the company in a particular period. I will not be able to give specifically why it has gone up, but it is entirely due to the product mix. Probably we might have sold some of the products where the gross margin is slightly higher compared to the standard margins, and that is the reason why it has gone up.

Analyst questioned the significant YoY improvement in gross margin. Management attributed it entirely to a favorable product mix with higher-margin products sold during the period.

Asked by Aayush Jha

Other Expenses Increase Direct
Secondly, the other expenditure, there are one or two expenditures like equipment maintenance, which is a long-term contract with the supplier, Keysight Technologies, which was pending for quite a long period of time that got finalized in this quarter and we are under obligation to pay them. That is one line item, which has increased the other expenditure in a big way. The second one, which I can recollect is about the CSR expenditure. The entire CSR expenditure for this financial year was close to about INR2.65 crores incurred in this quarter.

Analyst asked about the higher other expenses. Management explained it was due to a long-pending equipment maintenance contract with Keysight Technologies finalized this quarter and a significant CSR expenditure of INR 2.65 crores.

Asked by Aayush Jha

3 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance Overview

Astra Microwave Products Limited reported a strong Q2 FY26 standalone revenue of INR 213 crores, achieving an EBITDA of INR 46 crores, translating to a healthy margin of 21.7%, and a PAT of INR 21 crores. For the first half of FY26, standalone revenue stood at INR 410 crores, marking a 7.2% year-on-year growth. EBITDA for H1 was INR 85 crores with a 20.6% margin, and PAT grew by 13.5% year-on-year, underscoring the resilience of core operations.

Robust Order Book and Future Outlook

As of September 30, 2025, the standalone order book reached INR 1,916 crores, with the consolidated figure at INR 2,209 crores, providing strong visibility for upcoming quarters. The order book is predominantly domestic, particularly in the defense sector, driven by build-to-spec projects ensuring strong profit margins. The company recently secured a significant INR 286 crores order from the Ministry of Defense for advanced communication systems for the Indian Air Force Special Forces, with expected sales of INR 41 million for the current year.

Strategic Growth Vision and Long-term Targets

Management articulated an ambitious long-term vision, aiming to double the company's turnover (2x plus) in the next 3 to 4 years. Specific revenue targets include INR 1,400-1,500 crores for FY27, INR 1,650 crores plus for FY28, INR 2,000 crores for FY29, and INR 2,250-2,500 crores by FY30, driven by major programs like QRSAM, Uttam radars, and Su-30 upgrades. The ultimate goal is to transform Astra into a $1 billion company, leveraging its capabilities in radar, missile systems, and electronic warfare.

Product Development and Technological Leadership

Astra continues to make progress in product development, particularly for AESA Virupaksha and Uttam radars. The company highlighted its 25-year engagement with India's space program, contributing to landmark missions through advanced RF and microwave subsystems. A new product line, maintenance of electro-optic products, has been recently adopted. The company is also building its own Astra SAT-1 satellite, planned for launch within 24 months, with a focus on revenue generation.

Working Capital Management and Margin Stability

The company reported an improvement in operating cash flows during the first half of the year, primarily due to the realization of long-pending receivables from critical programs. This positive trend is expected to continue, leading to a significant reduction in working capital days. Gross margins for the current year are expected to be maintained at the delivered levels of 45-50%, with a positive bias for FY27 and FY28, supported by a favorable product mix.

Joint Venture Performance and New Opportunities

The joint venture, ARC, is performing well, with expected sales of $42 million and an order book of $100-120 million by the end of FY26. Astra Rafael Comsys System Private Limited, another joint venture, reported an order book of INR 336 crores as of September 30, 2025, with expectations to reach INR 800-850 crores in the next 6-7 months and achieve sales of INR 250 crores for FY26. The company is also actively participating in RFPs and price negotiation committees, confident in achieving its year-end order booking targets.

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