Centum Electron

Centum Electronics reported strong standalone performance for Q3 FY26, with revenue from operations growing 27% YoY to INR 238 crores and EBITDA also up 27% YoY to INR 26 crores. Profit before exceptional item^📎s and tax saw a significant 77% YoY increase to INR 19 crores. For the 9-month period, standalone revenue grew 25% YoY to INR 630 crores, with EBITDA up 50% to INR 76 crores, achieving a 12.1% margin. Consolidated performance for Q3 FY26 showed a 21% YoY revenue growth to INR 331 crores and an EBITDA margin of 9.5% (INR 31 crores). The 9-month consolidated revenue reached INR 873 crores, up 15% YoY, with EBITDA at INR 78 crores (8.9% margin).

The company has taken decisive steps to address challenges in its overseas subsidiaries. Operations in Canada have been discontinued, with a 9-month FY26 loss before tax of INR 39 crores and a Q3 FY26 loss of INR 29.8 crores from these discontinued operations. For French subsidiaries, actions for divestment or judicial reorganization have been initiated, with no expectation of meaningful realization. These actions led to significant exceptional item^📎s: INR 57 crores consolidated (Q3) and INR 153.8 crores standalone (Q3), primarily for impairment of goodwill, intangible assets, and investments, aiming to reflect a conservative and realistic valuation of overseas exposures.

Centum demonstrated robust execution in its high-margin Build-to-Spec segment, particularly in domestic defense and space programs. A key highlight was being declared L1 bidder for a complete radar system, a program valued at approximately INR 700 crores over 5-6 years, with first production orders expected in Q4. The strategic partnership with GRSE for air navigation systems has already yielded an INR 30 crores order, with a total potential of INR 500 crores over 3-5 years from various shipbuilders. The Space-Based Surveillance program presents an addressable opportunity of INR 1,000 crores, with orders starting to flow in Q4/Q1 next year.

The EMS segment saw strong execution, driven by ramp-up of deliveries to a new semiconductor equipment customer. New orders were secured from this customer, with expected revenues of $10 million in FY26 and an annual run rate of $30 million within two years. The company also secured new business in the Energy and Industrial segment from a global OEM for grid automation and power distribution products. Centum completed groundbreaking at KIADB Aerospace Park for a dedicated facility for systems integration, positioning itself to benefit from the India Semiconductor Mission 2.0 and global semiconductor capex cycle growth.

Management expressed confidence in achieving multifold growth in the Defense and Space business in the coming years, driven by a strategy to move up the value chain towards integrated systems and platform-level solutions. While the overall EMS business is expected to maintain EBITDA margins of 10-11%, the Defense and Aerospace Products business has the potential for 35-40% EBITDA margins, particularly with indigenous designed products. The company emphasizes its focus on internal R&D capabilities and strategic partnerships with global players to capture opportunities and enhance margins.