Astra Microwave

The defence industry continues to be highly supportive for domestic players, with approximately 75% of India's defence capital acquisition budget now allocated to domestic companies. India's defence exports reached ₹38,000 crores in FY26, indicating strong momentum. This focus on indigenization and rising defence spending globally is creating significant opportunities for Indian defence electronics and subsystem manufacturers like Astra, particularly in fast-growing segments such as electronics, drones, and aerospace.

Astra Microwave reported a strong FY26 with a turnover of ₹1157 crores, meeting its initial guidance. The company achieved an operating cash flow of ₹370 crores, a substantial improvement from a negative ₹99 crores in the previous year, driven by consistent growth, effective execution, margin expansion, and an improved working capital cycle. The Board recommended a dividend of ₹2.40 per equity share for FY25-'26, representing 120% of face value. Profitability for FY26 was, however, impacted by forex-related provisions, though management anticipates improved profitability in the coming year.

The Board of Directors has in-principle approved the demerger of the company's space, meteorology, and hydrology business. This strategic move aims to create sharper strategic and operational focus for distinct business segments, enable dedicated management teams, enhance governance, and simplify the corporate structure. This restructuring is expected to position Astra to capitalize on emerging opportunities both in India and globally, supporting focused growth, better capital allocation, and improved operational efficiency over the medium to long term.

The company's total order book stood at a robust ₹2141 crores as of March 31, 2026, with ₹530 crores in fresh orders secured during Q4 FY26. Additionally, ₹300 crores of PNC orders are expected soon, and there is clear visibility for over ₹1600 crores in orders for FY27, with 25% from R&D programs. The radar business contributed 60% to FY26 revenue and is expected to contribute 45% in FY27, while space and meteorology contributed 16% in FY26 and are projected to contribute 25% in FY27. The company targets a 15-20% top-line growth rate for FY27 and aims to triple its turnover within 3-4 years, reaching up to FY30-FY31, driven by 5-6 major programs including QRSAM, Uttam radars, Su-30 upgrades, and electronic mines.

Astra Microwave has evolved from a component manufacturer to an IP-driven systems manufacturer and a Development-cum-Production Partner (DCPP) for strategic national programs. The company has successfully delivered complex systems such as Mobile Multi-Object Tracking Radar, Phased Array Telemetry, and various Doppler weather radars. Significant investments in R&D are ongoing, including the development of digital array radar subsystems, photonics radar, and ground penetrating radars. The in-house MMIC division, established in 2005, provides a competitive advantage by supplying most active devices for subsystems and is now being promoted to external domestic and international markets.

The joint venture, Astra Rafael Comsys (ARC), had a strong FY26 with order bookings of ₹546 crores and sales of ₹360 crores. For FY27, ARC is expected to achieve a minimum 50% growth in both order booking and sales, with sales projected to cross ₹600 crores. The JV has an order book visibility of ₹200 crores for FY27. Management projects an EBITDA margin of 18-20% for ARC in FY27, with a profit share of at least ₹20 crores for Astra, despite FY26 profitability being impacted by R&D expenditure and a $2 million forex provision.