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    Centum Electronics Limited

    CENTUM
    Capital Goods·15 May 2026
    Management Summary

    Centum Electronics concluded FY26 on a strong note, with record standalone revenue and robust order book growth driven by defense, aerospace, and semiconductor segments. The company is undergoing a strategic restructuring of its underperforming overseas subsidiaries, classifying them as discontinued operations, to sharpen focus on its core India ESDM platform. While full-year standalone margins were slightly below target due to product mix, management maintains a positive medium-term outlook for growth and margin expansion, despite ongoing supply chain challenges.

    Highlights

    5

    • Standalone FY26 revenue reached a record ₹973 crores, reflecting a strong 25% year-on-year growth.

    • EBITDA for standalone operations grew 28% year-on-year to ₹121 crores, translating into a margin of 12.42%.

    • Standalone order book grew 23% year-on-year to ₹1,645 crores, providing strong visibility for coming years.

    • Adjusted ROCE improved significantly to 21.16% from 12.40%, reflecting stronger profitability and improved capital efficiency.

    • Secured a marquee AESA radar program from HAL exceeding ₹570 crores over its life cycle, validating indigenous defense capabilities.

    Concerns

    4

    • FY26 standalone margins (12.42%) were below the guided range of 14-15% due to product mix in the EMS business.

    • One-time exceptional item of ₹203 crores related to provisions and impairments in overseas subsidiaries impacted full-year profitability.

    • Supply chain bottlenecks, particularly in copper clad laminate (CCL) and memories, are an emerging theme, potentially affecting PCB lead times.

    • No realization is expected from the sale of overseas subsidiaries, as liabilities significantly exceed assets.

    Key financials

    Metrics

    8

    Periods

    2

    FY26

    7
    • Standalone Revenue
      ₹973 Cr
      YoY+25%
    • Standalone EBITDA
      ₹121 Cr
      YoY+28.0%
    • Standalone EBITDA Margin
      12.4%
    • Consolidated Revenue
      ₹953 Cr
      YoY+29.0%
    • Consolidated EBITDA
      ₹135 Cr
      YoY+37%

    Continuing Operations, FY26

    1
    • Consolidated PAT
      ₹101 Cr
      YoY+100%

    Segment breakdown

    Revenue Growth (FY26)EBITDA Margin
    Build-to-Specification (BTS)37%20%
    Electronics Manufacturing Services (EMS)21%9%
    Heatmap· 2 shared metrics

    Order Book

    high confidence

    Total Value

    ₹ 1,645 crores

    as of 2026-03-31

    quantified
    23.0% YoY

    Execution

    BTS orders have a fairly longer cycle game, from RFP to revenue realization. EMS orders have a shorter execution period, typically 6-9 months.

    Composition

    Mix2 programs
    • AESA radar program (HAL UHM platform)₹ 570 crores95.0%
    • Space debris tracking radar₹ 30 crores5.0%

    Share of order book by program (derived from disclosed amounts)

    Cancellations / Deferrals

    • deferred:INR 100-150 crores of orders expected to come in, pushed to current fiscal (FY27) from end of last year.

    "The company has a strong standalone order book with good visibility for the coming years, especially in the BTS segment, and expects significant growth in order booking for the current fiscal."

    Source:
    Prepared remarks

    Capital allocation

    4
    CategoryHeadline
    Capex

    ₹40 crores

    Debt

    Debt disclosed

    M&A

    Centum Canada operations

    divestment · abandoned

    M&A

    Centum French subsidiary (Europe)

    divestment · pending regulatory

    Guidance & targets

    6
    CategoryTargetPriority
    Growth
    Standalone Revenue Growth
    25-30%
    		High
    Profitability
    Standalone EBITDA Margin
    13-15%
    		High
    Profitability
    Overall Margin Improvement
    13-15%
    		Medium
    Capex
    Capex Spend
    ₹40-45 crores
    		High
    Program Execution
    HAL UHM Platform Development Phase
    ₹66-67 crores
    		High
    Program Execution
    HAL UHM Platform Remainder Execution
    ₹500+ crores
    		High

    What to watch in Q1 FY27

    5

    Overseas Subsidiary Deconsolidation

    Q1 or Q2 FY27
    CurrentFinancials classified as discontinued operations; asset sale process ongoing.
    TargetFull deconsolidation by Q1 or Q2 FY27.

    Why it matters

    Successful and timely deconsolidation will remove the drag from underperforming overseas assets and provide clearer visibility into core India business performance.

    Broadly speaking, just to add. The main point here is that it is already a discontinued operation. And there is no cash that is going from the standalone entity or parent company to the subsidiaries. And it hasn't -- there hasn't been any over the last several quarters, in fact. So this will be deconsolidated very shortly. And we are looking at whether this will happen at the end of Q1 or I would guess worst case in Q2.

    Risks & concerns

    4
    RiskSeverity

    Product mix impacting EMS margins

    FY26 standalone margins were below target due to a less favorable product mix in the EMS business, though improvement is expected in FY27. — Analyst acknowledged

    medium

    Supply chain bottlenecks (CCL, memories)

    Emerging bottlenecks in copper clad laminate (CCL) and memory components are impacting PCB lead times, driven by demand and AI data center build-out. — Analyst acknowledged

    medium

    Financial impact of overseas subsidiary restructuring

    No financial realization is expected from the sale of overseas subsidiaries as liabilities exceed assets, and there was a ₹203 crore exceptional item for impairments in FY26. — Management acknowledged

    medium

    West Asia crisis impact on supply chain

    Short-term logistics impacts were seen at end of Q4, but no major supply disruptions are currently observed, though the situation is being monitored. — Analyst downplayed

    low

    Q&A highlights

    8

    “Yes, it was first of all, I think just in terms of our broad guidance, we're targeting to be in the range of 13% to 15% at a combined level and we are slightly below that for the full year, basically because of the product mix in the EMS business. We had initially anticipated a slightly better product mix in the last year. Some of this will be executed in the current financial year. And with that, we should see better margin from the EMS business in the current year. So that's fundamentally the point.”

    Analyst questioned why FY26 standalone margins were below the 14-15% guidance, and management attributed it to product mix in EMS, expecting improvement in FY27.

    asked by Ankit Babel

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Restructuring of Overseas Operations

    Centum Electronics has initiated decisive restructuring actions for its underperforming overseas operations, classifying them as discontinued operations. Canada operations were discontinued in Q4 FY26, with the wind-up process underway. The French subsidiary entered a legal restructuring process in March 2026, and its asset sale is expected to conclude by July 2026. Management does not anticipate any financial realization from these sales, as liabilities significantly exceed assets, but expects full deconsolidation by Q1 or Q2 FY27, which will improve focus on the core India business.

    02

    Robust Standalone Performance and Order Book Growth

    The company reported a strong FY26, with standalone revenue growing 25% year-on-year to a record ₹973 crores. Standalone EBITDA increased by 28% year-on-year to ₹121 crores, achieving a margin of 12.42%. The standalone order book closed at ₹1,645 crores, representing a 23% year-on-year growth, providing strong revenue visibility. The Build-to-Specification (BTS) business saw particularly strong growth of 37% year-on-year, while Electronics Manufacturing Services (EMS) grew 21% year-on-year.

    03

    Key Program Wins and Strategic Positioning

    Centum secured a marquee AESA radar program from HAL for the UHM platform, with an opportunity size exceeding ₹570 crores over its life cycle, validating its capabilities in indigenous defense electronics. Additionally, a ₹30-crore order for a second complete radar system for satellite and space debris tracking further strengthens its position in strategic surveillance. These wins reinforce Centum's positioning in high-potential sectors like defense, aerospace, space, semiconductor equipment, and industrial electronics.

    04

    Margin Dynamics and Future Outlook

    While FY26 standalone EBITDA margins of 12.42% were slightly below the 13-15% target, management attributed this to product mix in the EMS business. EMS margins typically range from 9-10%, while BTS margins are 20%+. Management expects margin improvement in FY27 due to better product mix and operating leverage, reiterating a medium-term target of 13-15% EBITDA margin. The company aims for a 25-30% standalone revenue growth rate in the medium term.

    05

    Capital Efficiency and Capex Plans

    Centum demonstrated improved capital efficiency, with adjusted net working capital days improving to 142 days from 159 days in the previous year. Adjusted ROCE significantly improved to 21.16% from 12.40%. For FY27, the company plans a capital expenditure of ₹40-45 crores, with a significant portion allocated to enhancing R&D capabilities in the BTS segment, supporting future growth and technological advancements.

    06

    Supply Chain Challenges and Mitigation

    Management acknowledged emerging supply chain bottlenecks, particularly for copper clad laminate (CCL) and memory components, which are impacting PCB lead times. These challenges are partly driven by increased demand and the AI data center build-out. The company's supply chain team is implementing proactive measures to mitigate these issues and is closely monitoring the situation to ensure continued supplies and execution.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.