Astra Microwave Products Limited — Q4 FY26 earnings call

Call held 27 May 2026

Management summary

Astra Microwave concluded FY26 with strong operational performance, achieving a turnover of ₹1157 crores and generating ₹370 crores in operating cash flow. The company secured ₹530 crores in fresh orders during Q4, boosting its total order book to ₹2141 crores. Strategic initiatives include an approved demerger of non-core businesses and a focus on IP-driven products, positioning Astra for a targeted tripling of turnover within 3-4 years, despite some profitability impact from forex provisions in FY26.

Highlights

  • FY26 turnover of ₹1157 crores, delivering at par with guidance, demonstrating strong technology portfolio and execution capabilities.

  • Operating cash flow significantly improved to ₹370 crores in FY26 from -₹99 crores in the previous year.

  • Secured fresh orders worth ₹530 crores in Q4, contributing to a robust total order book of ₹2141 crores as of March 31, 2026.

  • Board recommended a dividend of ₹2.40 per equity share for FY25-'26, representing 120% of face value.

  • In-principle approval for the demerger of space, meteorology, and hydrology business to create sharper strategic and operational focus.

Concerns

  • FY26 profitability was impacted by forex-related provisions, though improvement is expected in the coming year.

  • Management indicated that current margins (e.g., Q4 EBITDA of 33.3%, FY26 gross margin of ~55%) might be the 'top end,' advising investors to factor in slightly lower numbers for future margin trajectory.

Key financials

3 periods

Headline

  • Revenue
    ₹1,157 Cr
  • Operating Cash Flow
    ₹370 Cr
  • Operating Cash Flow (Previous Year)
    ₹-99 Cr
  • Dividend Per Share
    ₹2.4

Q4

  • EBITDA Margin
    33.3%

FY26

  • Gross Margin
    55%

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

  • Radar (FY26 Revenue Contribution)
    60% Share of Revenue
  • Space & Meteorology (FY26 Revenue Contribution)
    16% Share of Revenue
  • Radar (FY27 Expected Contribution)
    45% Share of Contribution
  • Electronic Warfare & Missile (FY27 Expected Contribution)
    25% Share of Contribution
  • Space & Meteorology (FY27 Expected Contribution)
    25% Share of Contribution

Order book

high confidence

Total value

₹2,141 Cr

as of 2026-03-31 quantified

Inflow this quarter

₹530 Cr

Composition

Mix 2 subsidiaries
  • Astra Rafael Comsys (ARC) FY26 Order Booking ₹546 Cr 60.3%
  • Astra Rafael Comsys (ARC) FY26 Sales ₹360 Cr 39.7%

Share of order book by subsidiary, derived from disclosed amounts

Pipeline

L1 awaiting loa

PNC orders expected soon

Order book across the industry remains at historical high levels, providing strong long-term visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹50 Cr
    we are augmenting the existing requirements by spending close to about INR40 crores, INR50 crores. So that will continue.
  • Dividend ₹2.4/share (final)
    The Board has recommended a dividend of INR2.40 per equity share, that is about 120% of face value for the year FY25-'26
  • M&A Space, Meteorology, and Hydrology Business Divestment · Announced

    To create sharper strategic and operational focus for business segments, enable dedicated management teams, enhance governance, simplify corporate structure, and create clearer investment propositions to shareholders.

    On a strategic front, the Board of Directors have in-principle approved demerger of our space, meteorology, and hydrology business.
  • Liquidity Liquidity disclosed Improved working capital cycle and realization of receivables expected to continue, managing increased volumes within sanctioned limits.
    As I mentioned in my call, there is a significant improvement happened in the working capital cycle in the last year, by realizing significant amount of debtors through which are being held up for various technical reasons. I would say that the improvement in terms of realization of the receivables will continue.

Guidance & targets

Revenue

  • FY27 Top Line Growth Rate Revenue · FY27 · High confidence 15% to 20%
    reaffirm our FY27 top line growth at 15% to 20% rate

    — S. G. Reddy, Managing Director

  • Overall Revenue Tripling Revenue · up to FY30-FY31 · Medium confidence 3-4 years
    down the line three to four years to triple the revenue or maybe you can say up to FY30 to FY31.

    — Vansh Modi, Svan Investments (question) / Management (response)

Order Booking

  • ARC FY27 Growth (Order Booking & Sales) Order Booking · FY27 · High confidence minimum 50%
    we expect the minimum growth of 50% both in terms of order booking and as well as sales.

    — Atim Kabra, Director, Business Development Strategic

Sales

  • ARC FY27 Sales Sales · FY27 · High confidence cross INR600 crores
    expected to cross INR600 crores sales.

    — Atim Kabra, Director, Business Development Strategic

Profitability

  • ARC FY27 EBITDA Margin Profitability · FY27 · High confidence 18-20%
    EBITDA, I think around 18% to 20% is what is being projected by the company.

    — Management

  • ARC FY27 Profit Share Profitability · FY27 · High confidence INR20 crores plus
    on INR600 crores top line, at least about INR20 crores plus of will be our share of profit for the entire year.

    — Management

Project Completion

  • Su-30 Radar (AAAU) Development Completion Project Completion · next 2-3 months · High confidence 2-3 months
    I think next two to three months we should be in a position to complete the development and hand over to DRDO.

    — Management

  • Su-30 EW (DCPP) Completion & Qualification Project Completion · next year · High confidence next year
    expecting next one year that also we should be completed and gets qualified.

    — Management

Project Qualification

  • Su-30 Radar Overall Qualification by DRDO Project Qualification · FY28 · Medium confidence FY28
    in maybe FY28, DRDO will be ready to qualify the overall radar.

    — Management

Order Inflow

  • QRSAM Main Contract Orders Order Inflow · next 3-4 months · Medium confidence 3-4 months after BEL gets order
    once after they get the main contract, we expect the orders in next, you know, three to four months from their order.

    — Management

  • Uttam Radar Order Order Inflow · Q2 or Q3 FY27 · Medium confidence Q2 or Q3
    this particular order sometime in the Q2 or Q3

    — Management

Order Visibility

  • FY27 Order Booking Visibility Order Visibility · FY27 · High confidence INR1600 crores plus
    we have a clear visibility of approximately INR1600 crores plus orders which can be booked in the current year, that is FY27.

    — Dr. M. V. Reddy, Joint Managing Director

What to watch in Q1 FY27

Demerger Approval and Details

next few weeks
Current In-principle approval received
Target Formal approval and detailed scheme

Why it matters

The demerger is a key strategic initiative to enhance focus and unlock shareholder value, and its formalization is crucial for future business structure.

We will share the detailed scheme of demerger once it is formally approved by board, which is expected over the next few weeks.

Risks & concerns

  • Forex-related provisions impacting profitability

    medium

    FY26 profitability was impacted by forex-related provisions, though improvement is expected in the coming year.

    Management acknowledged

  • Government program delays shifting addressable market timeline

    medium

    The timeline for realizing the INR28,000 crores addressable market has shifted from FY28-FY29 to FY30-FY31 due to delays in government-driven programs and development activities.

    Management acknowledged

  • Potential moderation of future margins

    medium

    Management indicated that current high margins might be the 'top end' and advised factoring in slightly lower numbers for future margin trajectory.

    Management acknowledged

  • Delays in user qualification for new defence systems

    medium

    While development of systems like the Su-30 radar may complete soon, user qualification by DRDO and subsequent production orders could take 2-3 years, impacting revenue recognition timelines.

    Management acknowledged

Q&A highlights

4 direct
EBITDA Margin Trajectory and Sustainability Partial
this probably is the top end, you can actually you should factor in slightly lower numbers only on the margin front, so that there is no disappointment coming in at a later date. This is probably as best as it gets, if I may say so.

Management cautioned that current high margins might be peak, suggesting potential moderation and advising a conservative outlook for future margin trajectory, which is a key investor concern.

Asked by Amit Dixit, Goldman Sachs

Revenue Tripling Guidance and Capex Requirements Direct
in terms of the capex, as you know every year, we are augmenting the existing requirements by spending close to about INR40 crores, INR50 crores. So that will continue. Therefore, there won't be an additional capex beyond this what we are doing normally.

Management clarified that the ambitious revenue tripling target will be achieved without significant additional capex beyond routine annual spend, indicating asset-light growth primarily driven by execution and working capital management.

Asked by Vikas Singh, ICICI Securities

Su-30 Upgrade Program Timelines and Production Orders Partial
For the radar, the AAAU which we have taken up development, that is on I think next two to three months we should be in a position to complete the development and hand over to DRDO. And in all probability, I think in maybe FY28, DRDO will be ready to qualify the overall radar. But we cannot comment on behalf of DRDO. We are expecting that this will be completed in next financial year. And similarly in the EW front also, we are taken up as a DCPP for that overall program and it is in the development-cum-development phase and we are expecting next one year that also we should be completed and gets qualified. So soon after qualification, we hope to get production order from the services.

Analyst probed on the discrepancy between BEL's longer timeline and Astra's. Management provided specific internal development completion targets but highlighted that user qualification and subsequent production orders could take longer (2-3 years after qualification), indicating potential delays in revenue recognition from these critical programs.

Asked by Sahil Karia, White Pine Investment Management

JV Profitability and Impact of Forex Provisions Direct
I think INR1 crores profit you are referring to the quarter, otherwise for the year, no, it is around close to about INR8 crores. That is the share of profit after tax, that is from the JV. Yes, during the current year, of course R&D expenditure is always there. In addition to that, there is a foreign exchange provision which the company has to make. So, because of that, close to about $2 million of provision was made in the books of accounts. As a result, the overall profitability has come down.

Management clarified the lower-than-expected JV profit share for FY26, attributing it to R&D expenses and a significant $2 million forex provision, which impacted overall profitability and provides context for the reported numbers.

Asked by Balasubramanian, Arihant Capital Markets

MMIC Dependency and External Market Strategy Direct
If you look at the overall MMIC thing, as of now we have not encountered any issue and that production and as well as development is going very smooth. And second thing is as far as the dependency like yes, in all our subsystems, we are most of the active devices we are sourcing out from our in-house MMIC division. And also, we are started promoting these MMICs to the domestic players and international players also.

Management confirmed the successful in-house production of MMIC components, reducing dependency, and outlined a strategic move to promote these advanced components to external domestic and international markets, indicating a new revenue stream and competitive advantage.

Asked by Vikas Singh, ICICI Securities

Addressable Market Timeline Shift Direct
Well, Sanjeev, the total accessible market remained same, but only there is a shift in the year as you know there are many programs got delayed for various reasons as these are all government-driven programs, depend on the budget and also depend on the priority these gets shifted. And also, few development activities got delayed at various levels. So, the overall accessible market remains same, but only thing is we instead of FY28-FY29 may go up to FY30-FY31.

Management explained that while the total addressable market remains constant, the timeline for realizing it has shifted by 1-2 years (to FY30-FY31) due to delays in government programs and development activities, impacting the pace of future revenue conversion.

Asked by Sanjeev Zarbade, Antique Stock Broking

3 min read 6 chapters

Detailed narrative

Industry Outlook and Indigenization Focus

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.

FY26 Financial Performance Highlights

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.

Strategic Initiatives and Demerger

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.

Order Book and Future Growth Drivers

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.

Technological Evolution and Product Development

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.

Astra Rafael Comsys (ARC) Performance and Outlook

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.

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