Astra Microwave Products Limited

Astra Microwave achieved a 15-year high in revenue, reaching INR 1,044 crores in FY25, meeting its annual target. This growth was accompanied by significant margin expansion, with gross profit margin improving to 43.9% from 39% in FY24, and EBITDA and PAT margins standing at 25.5% and 13.7% (INR 143 crores) respectively. The improvement is attributed to a favorable product mix with increased domestic defense orders, which contributed nearly 90% of revenue in FY25 compared to 68% previously.

The company secured new orders worth INR 1,098 crores on a stand-alone basis during FY25, contributing to a consolidated order book of INR 2,304 crores as of March 2025. Domestic orders constitute 91% of the stand-alone order book, primarily in build-to-spec defense projects. Key order wins include INR 556 crores from radar, INR 226 crores from electronic counter intelligence, INR 36 crores from telemetry, INR 60 crores from space, INR 79 crores from exports, and INR 140 crores from metrology and hydrology sectors. Additionally, INR 150 crores in service orders are part of the consolidated order book.

Astra Microwave has budgeted INR 90 crores for capital expenditure in FY26, split equally between test equipment and production facility expansion, to be funded by internal accruals and term loans. Management aims for a 20% top-line growth and an 18% PBT margin for FY26, targeting INR 1,400 crores in new order bookings. The joint venture, Astra Rafael Comsys, is projected to achieve INR 350+ crores in sales with a 12% PBT in FY26, with visibility to book over $100 million in orders.

The company acknowledged high working capital, with significant receivables and inventory at year-end. This is primarily due to large Q4 deliveries (over INR 400 crores), deferred receivables (INR 55 crores, including INR 24 crores for the NCNC program and weather products paid over 5 years), and INR 140 crores awaiting customer acceptance. Management is focused on optimizing working capital by addressing procurement cycles and technical issues, noting that the capital goods business is inherently working capital intensive.

Astra Microwave highlighted its critical role in national defense, contributing subsystems to programs like Akash missile system, Netra, LCA Mark 2, and Su-30 upgrades. The company emphasized its in-house capabilities in antenna design and manufacturing, which is a core strength, and its readiness to support indigenous defense technologies, including counter-drone solutions and advanced radar systems. They are actively involved in Project Kusha and QRSAM, providing TR modules and Receiver/Exciters.

The company is actively expanding its presence in the space sector, moving from supplying components and subsystems to developing its own satellite technology demonstrator through Astra Space Private Limited. Astra's capabilities span space-grade components, subsystems, payload contributions, satellite design, assembly, and ground stations, with efforts to monetize data from satellite applications. The total addressable market for its overall product range is estimated at INR 20,000-25,000 crores over the next 4-5 years, with the SDR segment alone estimated at INR 5,000-6,000 crores over 5 years.

Addressing concerns about the potential impact of China's gallium export restrictions on TRM production, management confirmed having a standby foundry service in Europe. They have already initiated development activities to build wafers there, ensuring a diversified supply chain for critical MMIC components used in Uttam and Virupaksha radars. This proactive measure aims to mitigate any supply chain risks from current production dependencies in Taiwan.