Astra Microwave Products Limited — Q3 FY25 earnings call

Call held 8 Feb 2025

Management summary

Astra Microwave delivered a healthy Q3 FY25 with 12% YoY revenue growth to ₹257 crores and stable EBITDA margins of 29.1%. The consolidated order book reached ₹2,332.6 crores, supported by ₹141 crores of new orders. The company's JV contributed significantly, and new product developments like the anti-drone radar show promise, despite some delays in the Uttam AESA radar program and an increase in reported interest costs due to accounting adjustments.

Highlights

  • Healthy performance with 12% year-on-year growth in top line, reaching ₹257 crores on a stand-alone basis.

  • EBITDA margins maintained at a sustainable level of 29.1%, indicating stability in the margin profile.

  • Consolidated order book stood at ₹2,332.6 crores as of December '24, with a stand-alone order book of ₹1,960.2 crores.

  • Joint venture (ARC) outperformed, contributing a handsome share of profit of ₹7.5 crores this quarter and bagging a ₹255 crores contract.

  • Successfully participated in technical trials of anti-drone radar for Indian Army and passed them.

Concerns

  • Sharp increase in interest cost, with 40% attributed to accounting standards for advances received, not actual outgo.

  • Delay in procurement of Uttam AESA radar, with orders now expected by Q1 FY26 instead of earlier timelines.

Key financials

2 periods

Headline

  • Revenue (Stand-alone)
    ₹257 Cr
    YoY +12%
  • EBITDA Margin
    29.1%
  • JV Profit Share
    ₹7.5 Cr

Q3 FY25

  • Order Inflow
    ₹141 Cr

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.

Segment breakdown

  • Domestic Defense
    85% Revenue Share
  • Export
    8.4% Revenue Share
  • Space
    3.4% Revenue Share
  • Metrology
    2.7% Revenue Share
  • Other Businesses
    50% Revenue Share

Order book

high confidence

Total value

₹1,960.2 Cr

as of 2024-12-31 quantified

Inflow this quarter

₹141 Cr

Composition

Mix 2 client types
  • Domestic 88%
  • Export 12%

Share of order book by client type

Pipeline

L1 awaiting loa

Negotiations concluded for INR150 crores, INR200 crores in pipeline for current quarter.

Management is confident in achieving the annual order booking target, with significant visibility for FY26 and FY27, focusing on build-to-spec exports.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹30 Cr
    • Maintenance capex ₹30 Cr
    Generally, the minimum will be about INR30 crores to INR35 crores. That is for maintenance capex, right? Yes, it is maintenance capex.
  • Debt Gross ₹430 Cr
    So both long term and short term. Short-term debt as of today is about INR400 crores. Long-term debt is about INR30 crores. So both long term and short term is close to about INR430 crores as of today.
  • M&A Astra Rafael Communication Systems (ARC) Joint venture · Integrated

    Outperformed in FY25, bagged significant contract, pursuing more opportunities in tactical communication and electro-optics.

    Contributed ₹7.5 crores profit this quarter, secured ₹255 crores contract.

    Our joint venture company has done well during the year and has already surpassed the year-end target. Handsome share of profit of INR7.5 crores is received from it during the quarter. Our JVC, as Mr. S.G. has mentioned, ARC outperforming in FY '25 and bagged a decent and strategically important contract worth of INR255 crores in last quarter to deliver software-defined radios kit for the Indian Air Force.
  • M&A Manjeera (New JV) Joint venture · Incorporated

    Developing a chip for NavIC applications and subsequent development and marketing.

    Just incorporated, long way to business potential.

    In terms of the JV, what we have with Rafael yes, Manjeera. The other one is what we have with Manjeera, it has just been incorporated, okay? You know very well that we and Manjeera are working on developing a chip for NavIC applications. So idea is that once this chip is in place, we would like to take the further development and marketing of that particular product through the joint venture company.

Guidance & targets

Revenue

  • FY25 Revenue Target Revenue · FY25 · High confidence ₹1,000 crores
    Before I hand it over to my colleague, I would like to inform you that we are on the way to achieve our year target, both in terms of top line and bottom line and aiming for about 15% to 20% top line growth for the coming year, which may translate to about INR1,200 crores to INR1,300 crores of sales.

    — S. G. Reddy

  • FY26 Revenue Growth Revenue · FY26 · High confidence 15-20%

    — S. G. Reddy

  • FY26 Sales Target Revenue · FY26 · High confidence ₹1,200-1,300 crores

    — S. G. Reddy

Margin

  • FY26 EBITDA Margin Margin · FY26 · High confidence 29-30%
    Yes, Amit, so this is as we mentioned in our previous calls also, this ToT, we got it from DRDO, but we optimized the design. And today, we are competing with a couple of companies in this particular domain. So initially, we developed the total radar solution and then we have demonstrated. And as Mr. S.G. has mentioned in the opening remarks, we are now integrating with the radar jammer and other sensors to provide the overall soft kill and as well as hard kill options.

    — Management

Order Inflow

  • FY26 Order Booking Order Inflow · FY26 · High confidence ₹1,300-1,500 crores
    And going forward, we have been seeing good visibility. Next for the FY '26, we have a clear visibility of INR1,300 crores to INR1,500 crores worth of orders which we are likely to book and which includes the domestic and as well as the export market.

    — Management

Export Revenue

  • Export Revenue Share (Build-to-Spec) Export Revenue · Long term · High confidence 10-15%
    But yes, we have been addressing globally, and we are, I think, confident of achieving at least 10% to minimum 10% to 15% of our revenue should come from the exports, especially on the build-to-spec. So this is what the figures probably we can achieve.

    — Management

Capex

  • FY26 Maintenance Capex Capex · FY26 · High confidence ₹30-35 crores
    Generally, the minimum will be about INR30 crores to INR35 crores. That is for maintenance capex, right? Yes, it is maintenance capex.

    — Management

Product Launch

  • Uttam AESA Radar Order Booking Product Launch · Q1 FY26 · Medium confidence Some quantity by June '25
    We could have got some order by March as we indicated previously, but now it's getting shifted to the -- mostly by first quarter of the next year. So we get definitely some quantity by June '25.

    — Management

What to watch in Q4 FY25

FY25 Revenue Target Achievement

next quarter (Q4 FY25 results)
Current INR640 crores (9 months)
Target INR1,000 crores

Why it matters

Verifies management's confidence in achieving their annual revenue guidance and overall business execution.

Yes, challenges are there. But as of today, we are confident to reach the milestone.

Risks & concerns

  • Increased Interest Cost due to Accounting Standard

    medium

    A significant portion (40%) of the reported interest cost is due to an accounting standard for advances received, not actual cash outgo, though actual working capital borrowings also increased.

    Management acknowledged

  • Delay in Uttam AESA Radar Procurement

    medium

    Orders for the Uttam AESA radar, previously expected earlier, are now shifted to Q1 FY26 (by June '25), impacting the immediate revenue timeline for this key product.

    Management acknowledged

  • Achievement of FY25 Revenue Target

    medium

    Management stated 'challenges are there' for achieving the INR1,000 crores FY25 revenue target, though they remain confident.

    Management acknowledged

  • Geopolitical Impact on Supply Chain

    low

    Geopolitical events (Israel-Gaza, Ukraine-Russia) caused some supply chain issues in the previous quarter, but management believes there will be no major challenge going forward.

    Management downplayed

Q&A highlights

7 direct
EBITDA Margin Outlook Direct
Yes, yes, we can achieve it.

Confirms management's confidence in maintaining 25%+ EBITDA margins going forward, indicating stable profitability.

Asked by Amit Dixit

Interest Cost Increase Partial
It is not an actual outgo, but accounting standard needs us to provide interest on the outstanding advance amount accounts irrespective of the terms of the contract we have to provide. The share of such provision is close to about 40% of whatever the amount we are showing in the financial statements.

Clarifies that a significant portion (40%) of the reported interest cost is an accounting provision, not actual cash outgo, mitigating concerns about cash flow.

Asked by Amit Dixit

Anti-Drone Radar Potential Direct
Yes. Amit, so this is as we mentioned in our previous calls also, this ToT, we got it from DRDO, but we optimized the design. And today, we are competing with a couple of companies in this particular domain. So initially, we developed the total radar solution and then we have demonstrated. And as Mr. S.G. has mentioned in the opening remarks, we are now integrating with the radar jammer and other sensors to provide the overall soft kill and as well as hard kill options.

Highlights the company's competitive advantage and future development plans for the anti-drone radar, a key new product.

Asked by Amit Dixit

Confidence in FY25 Revenue Target Direct
Yes, challenges are there. But as of today, we are confident to reach the milestone.

Management acknowledges challenges but reaffirms confidence in achieving the INR1,000 crores full-year revenue target, providing reassurance to investors.

Asked by Yug Modi

Debt-to-Equity Level Direct
So both long term and short term is close to about INR430 crores as of today.

Provides a clear figure for the company's total debt (INR430 crores), which is a crucial metric for assessing financial leverage.

Asked by Raj Mehta

Astra Rafael JV Performance Direct
Revenues achieved by the company is close to INR200-plus crores for 9 months period. Probably it may achieve another anywhere between INR50 crores to INR70 crores it will be in the balance 3 months of this financial year. And order book and all, we have already shared with you. We have INR475 crores order book as on 30th December.

Details the strong performance and order book of the joint venture, indicating a significant contribution to the company's overall growth.

Asked by Raj Mehta

Order Book Visibility and Export Strategy Direct
And going forward, we have been seeing good visibility. Next for the FY '26, we have a clear visibility of INR1,300 crores to INR1,500 crores worth of orders which we are likely to book and which includes the domestic and as well as the export market. Then FY '27 also, we have a clear visibility of at least 20% growth in the order book.

Provides strong forward visibility for order booking in FY26 (INR1,300-1,500 crores) and FY27 (20% growth), outlining future revenue potential.

Asked by Jyoti Gupta

QRSAM Opportunity Direct
Our opportunity will be around INR1,700 crores to INR1,900 crores.

Quantifies Astra Microwave's significant potential share (INR1,700-1,900 crores) in the large BEL-led QRSAM order, highlighting a major future revenue stream.

Asked by Amit Dixit

2 min read 7 chapters

Detailed narrative

Q3 FY25 Financial Performance Overview

Astra Microwave reported a healthy Q3 FY25, achieving a stand-alone revenue of INR257 crores, representing a 12% year-on-year growth. The company maintained strong profitability with an EBITDA margin of 29.1%, indicating stability in its margin profile. Domestic defense orders were the primary revenue driver, contributing 85% of the quarter's revenue, followed by exports at 8.4% and space at 3.4%.

Robust Order Book and Inflow

As of December 2024, the consolidated order book stood at INR2,332.6 crores, with the stand-alone order book at INR1,960.2 crores. The company secured new orders worth INR141 crores during Q3 FY25, bringing the 9-month order inflow to INR674 crores. Key new orders included INR20 crores from radar, INR60 crores from EW, and INR22 crores from space, with 88% of the stand-alone order book comprising domestic orders.

Strategic Pipeline and Future Growth Outlook

Astra Microwave has concluded negotiations for an additional INR150 crores worth of orders and has another INR200 crores in the pipeline, expected to be received in the current quarter. For FY26, the company projects an order booking of INR1,300-1,500 crores, with radar orders expected to contribute INR900-1,000 crores. Management aims for 15-20% top-line growth in FY26, targeting INR1,200-1,300 crores in sales, while maintaining EBITDA margins in the 29-30% range.

Joint Venture Success and New Collaborations

The joint venture with Rafael, Astra Rafael Communication Systems (ARC), demonstrated strong performance, contributing INR7.5 crores in profit this quarter and securing a significant INR255 crores contract for software-defined radios. Additionally, Astra Microwave has incorporated a new joint venture with Manjeera to develop a critical chip for NavIC applications, signaling future expansion into advanced technology domains.

New Product Development and Indigenization Drive

The company successfully completed technical trials for its anti-drone radar for the Indian Army, with plans for further enhancements including RF detectors and jammers. Astra also developed a handheld ground penetration radar and is participating in a competitive tender. These initiatives underscore Astra's commitment to indigenization and leveraging government policies to boost domestic production and exports.

Interest Cost and Working Capital Management

The reported increase in interest cost was primarily due to an accounting standard requiring the provision of interest on advances received from customers, which accounts for approximately 40% of the total finance cost shown in financial statements. While actual working capital borrowings also increased, management clarified that a significant portion of this reported cost is not an actual cash outflow, and the provision adjusts as contracts are executed.

Uttam AESA Radar Program Update

The Uttam AESA radar program, a key strategic project, has experienced some delays in procurement. The company has submitted its bid, and technical evaluation is ongoing. Orders for some quantity are now expected by Q1 FY26 (June 2025), with revenue rollout anticipated by March 2026, and the majority of contributions projected for FY27.

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