AXISCADES Tech.

AXISCADES Technologies delivered robust results for Q3 FY26, with revenue rising to INR343 crores, a 25% year-on-year increase and 14.8% sequential growth. EBITDA for the quarter stood at INR63 crores, marking a 55% YoY increase and achieving an 18.3% margin, an expansion of 360 basis points. Reported PAT grew 87% YoY to INR28 crores, and diluted EPS for 9 Months FY26 reached INR16.73, up 65% YoY. The company's 9M revenue grew 16.2% YoY to INR886 crores, with EBITDA reaching INR144 crores, surpassing the entire FY25 EBITDA within nine months.

The company is firmly on track with its vision to transition from services to manufacturing and product solutions. The product versus service revenue mix pivoted to 39:61 in 9M FY26, compared to 33:67 in the prior year, with a target to flip this to a product-led majority by FY27. This shift is supported by higher margins in products and solutions (25-30%) compared to services (18.5%), aiming for an overall EBITDA margin of 20% next year and an aspirational 25% in the medium term.

AXISCADES reported a strong forecast visibility (equivalent to order book) of INR3,300-3,400 crores as of December 31, 2025, providing sufficient numbers for next year's plans. Additionally, the company has a robust pipeline of INR14,000 crores over the next four years, with a conversion ratio of 100% for OEM-based orders and 50% for DRDO projects. The core domain order book for FY26, initially INR1,260 crores, is expected to see INR1,060 crores executed this year, with INR200 crores deferred to FY27 due to facility dependence, still achieving a 40%+ increase in core revenue from FY25.

The company is undertaking substantial capex for three major facilities: Missile Atmanirbhar Complex (MAC) in Hyderabad (8 acres) for missile electronics and integration, Devanahalli Atmanirbhar Complex (DAC) for aerospace manufacturing (tooling, parts, SCM), and Devanahalli Aero Land (DAL) for ESAI, system integration, and specialized labs (acoustic, laser, IR). These facilities are crucial for scaling up product offerings, particularly for hyperscalers and defence programs, and are expected to drive significant revenue from FY28 onwards.

AXISCADES is making significant progress in critical defence projects, including the development of an RF seeker for BrahMos and Kusha missiles, with RF functionalities completed and qualification expected by Q2 FY27. The company is also working on a platform-agnostic mission computer for LCA Mark 1 and other Tejas/Sukhoi systems. A strategic partnership with Indra has been signed for India programs, starting with TACAN development, and a collaboration with a leading AI company for AI-based drone management systems is underway, targeting multi-thousand crore orders.

The company is engaged in pilot projects with two hyperscaler customers, including a phone manufacturer and a company focused on home automation. These pilots are expected to scale significantly, with management foreseeing a 10x-20x growth potential from FY28 onwards, once the new facilities are fully certified and operational. This segment is a key driver for the product-led transition, with recurring revenues from test kits and sensor solutions.

AXISCADES is actively pursuing the divestment of its non-core businesses, which currently account for 30% of its headcount. Management confirmed being 'very much on track' with this initiative and expects to share full details by the next investor call. This divestment is a strategic move to streamline operations, improve overall margins, and focus resources on high-growth core domains like aerospace, defence, and ESAI.