AXISCADES Tech.

AXISCADES Technologies reported a robust Q2 FY26, with consolidated revenue reaching ₹299 crores, marking a 13% year-on-year increase and a strong 22.7% sequential growth. EBITDA for the quarter stood at ₹47 crores, up 41.5% YoY, with margins expanding to 15.7%. Profit after tax (PAT) was ₹23 crores, an 89% YoY increase. For the first half of FY26, revenue grew 11.2% YoY to ₹543 crores, with EBITDA at ₹81 crores (up 25.7%) and PAT at ₹44 crores (up 51.6%). Diluted EPS for H1 FY26 was ₹10.21, a 53% increase over the previous year.

The company is firmly on track with its ambitious Power930 initiative, aiming for a revenue target of ₹9,000 crores ($1 billion) by 2030. Management projects a robust year-on-year growth of 40% in core business areas for FY26 and FY27, with further acceleration to over 70% growth from FY28 to FY30 as new infrastructure becomes fully operational. For FY26, the company expects to achieve approximately 45% growth in core domains and a similar 45% growth in overall EBITDA, with comparable visibility for FY27.

AXISCADES is making significant investments in world-class infrastructure. The Devanahalli Aeroland facility (165,000 sq ft) for electronic semiconductors, AI, and test systems is now partially operational. Work has commenced on the ambitious 3 million sq ft Devanahalli Atmanirbhar Complex, with Phase-I CAPEX for the current financial year estimated at ₹150-180 crores. Over the next three years, the total investment for the DAC land, aerospace, and defense cluster is projected to be ₹1,100-1,200 crores, with an overall fund of ₹1,500 crores spread over three years, including a new missile complex in Hyderabad expected by March 2027. Funding is planned through internal accruals, strategic investments from partners, and bridge funding, with additional debt not exceeding ₹50 crores by FY26 end.

Core domains (aerospace, defense, and ESAI) were strong performers, contributing 75% of H1 revenues and delivering 19% EBITDA margins. Defense revenues grew 37% YoY in Q2 and 31% in H1, with margins at 22%, which management expects to maintain for the next four years due to competitive market conditions. Aerospace revenues grew 16% in Q2 and 12% in H1, with margins expected to remain around 18.5%. The ESAI segment experienced a slowdown as the company transitions to a manufacturing-based model, with no significant improvement expected in Q3 and Q4 FY26, but hyperscaler revenues are projected to grow from $2 million in FY26 to $6-7 million in FY27 for one partner.

The company has forged strategic alliances with global majors and technology leaders, including an expanded decade-old relationship with MBDA for missiles and ground systems, and a materialized partnership with INDRA. AXISCADES is developing critical subsystems for BrahMos and Kusha missiles, aiming to capture 10-15% of the market. They are also focusing on counter-drone systems, including a laser-based hard-kill option through a MoU with Cilas, targeting 20-30% market share. Production orders for TACAN antennas are expected within one month, and LLTR orders are anticipated by January.

AXISCADES maintains a comfortable financial position with a consolidated net worth of ₹700 crores and a net debt of around ₹50 crores. While the defense payment cycle of approximately 120 days will require additional working capital, management expects to fund this through internal accruals and cash generation without significantly increasing interest costs. The average tax rate for FY26 is expected to be around 25-26%. The company is also reviewing its business portfolio to divest non-yielding assets, with conclusions expected by March FY26, to further enhance profitability and fund growth.