Centum Electronics Ltd — Q3 FY26

Centum Electronics Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=OEMmTibgOVo Published: 2 months ago

0:01 1 second Good morning ladies and gentlemen and welcome to the Centrum Electronics Limited Q3 and 9month FY26 earnings 0:08 8 seconds conference call hosted by Ashika Institutional Equities. As a reminder, all participant lines will be in the 0:16 16 seconds listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:23 23 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:36 36 seconds Before we proceed, this conference call may contain forward-looking statements about the company which are based on the 0:43 43 seconds beliefs, opinions, and expectations of the company as on date of this call. 0:49 49 seconds These statements are not the guarantee of future performance and involves risk and uncertainties that are difficult to predict. I now hand the conference over 0:57 57 seconds to Miss Krishna Doshi from Ashika Institutional Equities. Thank you and over to you Miss Toshi. 1:05 1 minute, 5 seconds Thank you. Good morning and a very warm welcome to everyone on behalf of Ashika Institutional Equities. I welcome you 1:12 1 minute, 12 seconds all to Centum Electronics Limited Q3 FI26 earnings conference call. Today we have with us the management team 1:20 1 minute, 20 seconds presented by Mr. Nikhil Malawaraphu jointed managing director and Mr. Sundar Rajan parti chief financial officer. We 1:27 1 minute, 27 seconds thank electronics for giving us the opportunity to host the call and we will now like to hand over the floor to the management for their opening remarks 1:36 1 minute, 36 seconds post which we will open the floor for Q&A. Thanks and over to you Nikl sir. 1:42 1 minute, 42 seconds Thank you Vtoshi and good morning everyone. Welcome to our earnings con call to discuss the performance of the 1:49 1 minute, 49 seconds third quarter and 9 months the uh financial year 2026. 1:55 1 minute, 55 seconds Uh start with a special thanks to our host today at Ashka Stock Broking. 2:00 2 minutes Let me start today's call by summarizing the essence of the call. This quarter clearly represents an important inflection point for sentum with few 2:10 2 minutes, 10 seconds critical announcements and as a result allow us a little bit extra time uh to share our opening remarks after which we will open the floor for the Q&A. 2:22 2 minutes, 22 seconds So, we've delivered a healthy operating growth in our continuing business during the quarter and have taken decisive 2:30 2 minutes, 30 seconds steps to realign our global portfolio and strengthen the long-term foundation of the company. 2:36 2 minutes, 36 seconds I will first beef brief you on the key performance highlights for the quarter and the period under review, provide an overview of the decisions taken with 2:44 2 minutes, 44 seconds regard to our overseas subsidiary after which our CFO Mr. Sundra Raj and Pat Sati will take you through the financial highlights. 2:54 2 minutes, 54 seconds So starting with the core business, our standalone operations continue to demonstrate strong momentum during the 3:00 3 minutes quarter driven by robust execution in our high margin build to spec segment. 3:08 3 minutes, 8 seconds growth was led by strong execution in our domestic defense and space programs, particularly across radar systems, 3:15 3 minutes, 15 seconds space-based electronic warfare and tank electronics programs. 3:20 3 minutes, 20 seconds We continue to see a healthy demand visibility in these segments supported by our differentiated capabilities and longstanding customer relationships. 3:31 3 minutes, 31 seconds A key milestone during the quarter was forging a strategic partnership with GRSC for the air navigation program. 3:39 3 minutes, 39 seconds This marks our entry into missionritical air navigation systems and aligns strongly with our strategy of moving up the value chain towards integrated systems and platform level solutions. 3:51 3 minutes, 51 seconds I'm happy to share that we have already received the first order under this program and we expect more orders in the coming quarters as we build traction. 4:03 4 minutes, 3 seconds Further, we were declared L1 bidder for the development and production of a complete radar system for a major airborne platform of a defense PSU. 4:14 4 minutes, 14 seconds This is a significant validation of our capability in complex radar systems and strengthens our position in high value defense programs. 4:24 4 minutes, 24 seconds On the capacity expansion front, we also completed the groundbreaking at KADB Aerospace Park in Bengaluru where we 4:31 4 minutes, 31 seconds will be setting up a dedicated facility for systems integration and capability enhancements in critical technology areas. 4:40 4 minutes, 40 seconds On the EMS front, we also saw strong execution with ramp up of deliveries to a new semiconductor equipment customer. 4:49 4 minutes, 49 seconds We also secured new orders from this customer during the quarter. And with the favorable policy announcements under 4:56 4 minutes, 56 seconds the India semiconductor mission 2.0, we believe we are well positioned to benefit from the growth in the semiconductor capex cycle globally. 5:08 5 minutes, 8 seconds We also secured new business awards in the energy and industrial segment from an existing customer, a leading global 5:15 5 minutes, 15 seconds OEM for grid automate for new grid automation and power distribution product lines. 5:20 5 minutes, 20 seconds These initiatives further diversify our revenue base and strengthen our industrial electronics portfolios. 5:27 5 minutes, 27 seconds Our order book has also strengthened further during the period providing healthy revenue visibility into the 5:34 5 minutes, 34 seconds coming quarters and based on the current pipeline and customer traction we expect good momentum if order intake in Q4 as well. 5:45 5 minutes, 45 seconds Now let me address the overseas subsidiaries candidly. 5:50 5 minutes, 50 seconds Over the past several quarters, we have been transparent about the challenges in our Canada and France operations and our intent to address them in a timebound manner. 6:00 6 minutes In line with this commitment, we have now discontinued operations in our Canada based subsidiaries and initiated closure related actions in accordance with applicable regulations. 6:12 6 minutes, 12 seconds This effectively stops further operational losses from these entities in the European subsidiary. Over the 6:20 6 minutes, 20 seconds past few years, we have also made sustained and serious efforts to bring a turnaround. These included leadership 6:28 6 minutes, 28 seconds changes, strategic repositioning, operational restructuring, cost optimization initiatives, and capital infusion from the parent company. We 6:37 6 minutes, 37 seconds committed management bandwidth and financial resources to restore stability and growth. 6:44 6 minutes, 44 seconds However, despite these efforts, the prolonged weak macro environment in Europe, subdued demand in the R&D 6:52 6 minutes, 52 seconds services market, increased competitive intensity impacting margins and balance sheet constraints at the subsidiary 7:00 7 minutes level have not enabled a sustainable turnaround. 7:05 7 minutes, 5 seconds After careful evaluation, we determined that reallocating capital and leadership attention towards our core growth 7:13 7 minutes, 13 seconds segments would generate stronger long-term returns for shareholders. 7:19 7 minutes, 19 seconds Accordingly, the board has approved initiating actions with respect to our French subsidiaries to assess options 7:26 7 minutes, 26 seconds including divestment, sale or transfer of business or judicial reorganization as permitted under the relevant laws. 7:35 7 minutes, 35 seconds To summarize, we have discontinued operations in Canada and initiated restructuring act actions in France. 7:43 7 minutes, 43 seconds In line with these decisions, certain one-time exceptional items have been recognized in the quarter to appropriately reflect their financial impact. 7:53 7 minutes, 53 seconds Based on our present assessment, we do not expect any further material financial impact beyond what has already been recognized. 8:03 8 minutes, 3 seconds Overall, with the overseas restructuring actions now substantially addressed, our strategic focus 8:12 8 minutes, 12 seconds remains on strengthening the cap company's capital allocation discipline, allowing us to fully concentrate on 8:20 8 minutes, 20 seconds profitably scaling our rapidly growing core ESDM platform. 8:26 8 minutes, 26 seconds With that, I would like to hand over the call to our CFO, Mr. Rajan to brief you on the financials. 8:34 8 minutes, 34 seconds Thank you Mr. Nikl and good morning everyone. 8:38 8 minutes, 38 seconds Let me now brief you on the financial highlights for the third quarter and 9 months of the financial year ending uh 2026 March. 8:47 8 minutes, 47 seconds At the standalone level, revenue from operations for Q3 FI26 stood at uh rupees 238 crores, reflecting a very 8:57 8 minutes, 57 seconds strong growth at 27% yearonear and the ei quarter stood at rupees 26 crores 9:04 9 minutes, 4 seconds higher by 27% yearonear and the profit before exceptional tax and exceptional items in tax for the quarter stood at 19 9:13 9 minutes, 13 seconds crores registering a growth of 77% yearonear. 9:18 9 minutes, 18 seconds For the 9month period, the standalone revenue stood at INR 630 crores, 9:25 9 minutes, 25 seconds registering a growth of 25% year-on-year and the EITA registered a growth of 50% to INR 76 crores, translating to a 9:35 9 minutes, 35 seconds margin of 12.1% representing about 200 basis points over the corresponding year last year, corresponding period last year, I'm sorry. 9:44 9 minutes, 44 seconds profit before exceptional items and tax for the 9mon periods to data in INR are 58 crores reflecting a growth of 128% 9:53 9 minutes, 53 seconds yearonear this clearly reflects improved scale better program mix and operating leverage in the India's ESM business 10:02 10 minutes, 2 seconds now coming to the consolidate performance revenue from operations for Q3 FI26 stood at rupees 331 crores 10:11 10 minutes, 11 seconds registering a growth of 21% year-onear And the EITA for the quarter stood at rupees 31 crores with a margin of 9.5%. 10:21 10 minutes, 21 seconds And the profit before exceptional items and tax expense from continuing operations was at 18 cr rupees which is up by 53% yearonear. 10:32 10 minutes, 32 seconds For the 9month period the consolidated revenue stood at INR 873 crores up 15% 10:39 10 minutes, 39 seconds yearonear. The EIDA for the 9 months stood at rupees 78 crores translating to a margin of 8.9%. 10:47 10 minutes, 47 seconds Profit before exceptional items and tax expense from continuing operations was at INR 45 crores which is up by 155% yearonear. 10:58 10 minutes, 58 seconds To reiterate, we delivered strong results this quarter and are well on the path to delivering a stronger quarter to 11:05 11 minutes, 5 seconds end the year. Largely backed by the standalone performance. 11:10 11 minutes, 10 seconds The financial results for the quarter end 9 months period reflects the impact of exceptional items and one-time impacts to give effect to the 11:18 11 minutes, 18 seconds developments relating to the overseas subsidies as discussed by m Mr. Nikl earlier. Now let me explain the accounting treatment relating to these overseas subsidies. 11:29 11 minutes, 29 seconds Following the board approval during December 2025, we have discontinued the Canadian operations that has been specifically 11:38 11 minutes, 38 seconds classified as discontinued operations in the Q3 financial statements. 11:42 11 minutes, 42 seconds Accordingly, all the prior period numbers have been restated to reflect the operating results of the continuing operations. 11:49 11 minutes, 49 seconds The net operating result lo results include loss relating to Canada that has been reflected separately under 11:56 11 minutes, 56 seconds discontinued operations in the consolidated financials. 12:00 12 minutes For the 9month period the loss before tax from discontinued operations amounted to rupees 39 crores and for the 12:07 12 minutes, 7 seconds quarter 3 F26 it was at 29.8 crores including onetime impact of 24.9 crores. 12:16 12 minutes, 16 seconds These numbers relate to Canadian subsidies. Again, now coming to the exceptional items included in the consolidated financial, 12:23 12 minutes, 23 seconds the exceptional items for Q3 in consolidated financial statements were at 57 crores and for the 9 months period 12:30 12 minutes, 30 seconds it was 55.6 crores. These relate primarily to impairment of goodwill and intangible assets arising from 12:39 12 minutes, 39 seconds restructuring options of the French subsidy. 12:43 12 minutes, 43 seconds At the standalone level, the impact is more pronounced due to impairment of investments. 12:48 12 minutes, 48 seconds During the quarter three, the company has fully impaired its investment in subsidiaries amounting to rupees 153.8 12:56 12 minutes, 56 seconds crores in standalone books. In addition, exceptional items at standalone books also include provision for receivables 13:05 13 minutes, 5 seconds relating to supplies made to the Canadian subsidy. 13:09 13 minutes, 9 seconds All these actions ensure that the standalone balance sheet now reflects a conservative and realistic valuation of the overseas exposures. 13:17 13 minutes, 17 seconds To summarize clearly, number one, Canadian operations have been classified as discontinued. The numbers have been reccast accordingly. 13:27 13 minutes, 27 seconds Standalone exceptional items largely relate to the impairment of investments in subsidies and provisions against receivables connected to Canada. Lastly, 13:36 13 minutes, 36 seconds the consolidated exceptional items that is in the consolidated financial statements primarily reflect goodwill and assets impairments relating to the French subsidy. 13:47 13 minutes, 47 seconds However, it's important to emphasize that these exceptional items are largely one-time in nature and predominantly non-cash accounting adjustments. With 13:55 13 minutes, 55 seconds these projeions now substantially recognized, we believe the balance sheet appropriately reflects the current structure and the future performance 14:03 14 minutes, 3 seconds will more clearly represent the strength of our continuing India EDM operations. 14:08 14 minutes, 8 seconds I can now confidently say that the underlying business momentum remains positive, margins are improving and the capital structure is now cleaner and more aligned with our strategic focus. 14:21 14 minutes, 21 seconds With this uh we can open the floor for Q&A session. Thank you. 14:27 14 minutes, 27 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 14:35 14 minutes, 35 seconds star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you 14:42 14 minutes, 42 seconds may press star and two. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, 14:50 14 minutes, 50 seconds we will wait for a moment while the question assembles. 15:02 15 minutes, 2 seconds We have the first question from the line of Ankit Babil from Shupcom Ventures. Please go ahead. 15:09 15 minutes, 9 seconds Uh good morning sir and congrats for uh good standalone numbers. So my uh first question is that uh why there has been 15:17 15 minutes, 17 seconds an adjustment of uh last year uh uh Q3 numbers on a standalone basis because 15:25 15 minutes, 25 seconds whatever reststructuring which has happened is all in subsidiaries. So why the standalone numbers have been adjusted restated? 15:37 15 minutes, 37 seconds Sorry uh Ankit I didn't get your question. standalone numbers have not been restated relating to these two subsidies uh for prior years. 15:46 15 minutes, 46 seconds It's only the consolidated financial segment if you read the footage also. 15:52 15 minutes, 52 seconds Huh. So you know because uh if I see your uh uh standalone numbers for last year so your uh uh uh as of now your 16:02 16 minutes, 2 seconds profit is coming at around at PBT level it's 10 107 million right but when you 16:10 16 minutes, 10 seconds had uh you know declared the results of last year it was coming somewhere one second 16:18 16 minutes, 18 seconds yeah it was coming at uh uh 91 million. 16:25 16 minutes, 25 seconds So there is a difference and in the notes also you have mentioned about this note number eight where you have 16:32 16 minutes, 32 seconds presented the restated numbers in your standard. So the uh in in standalone sorry to interrupt Ankit the there was a 16:40 16 minutes, 40 seconds amalgamation last quarter we announced about the TNS of India private limited there was one entity that's the only rest restatement in the standalone 16:48 16 minutes, 48 seconds financials but again I can provide the reconation offline if you want yeah okay okay sir uh second question is uh 16:56 16 minutes, 56 seconds what is the value of the radar order uh which where you are L1 from a defense DSU 17:06 17 minutes, 6 seconds Um Ankit we will we will disclose that uh the at at the time that that we receive it but 17:15 17 minutes, 15 seconds yeah so we expect we expect that to hopefully happen in Q4. Sir. 17:21 17 minutes, 21 seconds Okay. Okay. And my last question is now on as you had mentioned in the press release that you guys are looking for 17:28 17 minutes, 28 seconds even divestment of the friend subsidiary but since you have already taken the write off of full investment value. So 17:37 17 minutes, 37 seconds do you expect any any realization happening uh any uh you know if you succeed in selling or divesting your uh uh friend subsidiary? 17:50 17 minutes, 50 seconds Yeah u uh thanks for the question Ankit. 17:53 17 minutes, 53 seconds I think uh based on our assessment today, we don't expect to realize uh anything uh uh you know meaningful from this uh uh from this divestment. 18:06 18 minutes, 6 seconds Um we've had uh we've we've taken certain actions already over the last couple of months to assess this. Um and 18:15 18 minutes, 15 seconds uh while we while we continue to to look for for options, I think based on the current external environment 18:24 18 minutes, 24 seconds um uh in in France and Europe, uh you know, the the [clears throat] uh general M&A activity also has has has 18:33 18 minutes, 33 seconds slowed down, you know, in anticipation of of uh you know, better uh uh you know, future. 18:42 18 minutes, 42 seconds uh and as a result uh we we don't expect to realize much much uh from from this 18:48 18 minutes, 48 seconds uh process. So and that that's why for to be prudent also we have taken full impairment of the carrying value of the asset. 18:58 18 minutes, 58 seconds Okay. So any timeline wherein you expect to close it um the divestment. 19:06 19 minutes, 6 seconds So Ankita as mentioned this will uh there is a judicial reorganization process also that may kick in which 19:14 19 minutes, 14 seconds typically has about four to 6 months of observation period and within that they'll uh we'll have to find suitable 19:22 19 minutes, 22 seconds biders and the process will uh take its own time. So I think by the by next quarter that is Q4 uh financials 19:31 19 minutes, 31 seconds reporting time frame we expect some more clarity and as soon as we get to know any further details we'll definitely be updating the investors. Why I was asking 19:40 19 minutes, 40 seconds this question is plus till the time you don't divest so whatever loss of profit comes in those subsidies will will be 19:48 19 minutes, 48 seconds boned by sentum right will will be part of sentum that that's correct so that's why uh during the month of uh sorry during the 19:56 19 minutes, 56 seconds quarter next 6 8 weeks we will get to know more and based on the IFRS standards at the appropriate time when 20:04 20 minutes, 4 seconds we need to uh stop consolidating we will stop consulting also when it requires 20:11 20 minutes, 11 seconds Okay. Okay. So, uh again u the one confusion here. So, as you mentioned that uh you know in case if there are 20:19 20 minutes, 19 seconds losses because you have not been able to turn around the company. So, in case there are losses then you had also mentioned that you have already taken 20:27 20 minutes, 27 seconds the provisions. So if any further losses comes in would be over and above the provisions which you have already taken and I'm talking about the operational 20:35 20 minutes, 35 seconds losses because that business is still it's still running. 20:41 20 minutes, 41 seconds You're you're right. So the operating loss we cannot acrew ahead of time. So until the time the we consolidate the 20:48 20 minutes, 48 seconds financials of the European subsidiaries the operating loss will be consolidated. 20:54 20 minutes, 54 seconds At the same time like I mentioned once the process kicks in we'll get more clarity on the date of uh you know uh losing control or any subsequent action accordingly we will stop. 21:05 21 minutes, 5 seconds So considering the visibility sorry to interrupt Ankit I would request you to please rejoin the queue again for more questions. Okay ma'am. 21:14 21 minutes, 14 seconds Thank you. Thank you ladies and gentlemen. In order to ensure that the management should be able to address all 21:22 21 minutes, 22 seconds the questions from the participants in the question queue, we request you to kindly limit your questions to two per participant. 21:29 21 minutes, 29 seconds If you have a follow-up question, please rejoin the queue again. 21:34 21 minutes, 34 seconds We'll take the next question from the line of Balas Subramanyam from Ahan Capital. Please go ahead. 21:41 21 minutes, 41 seconds Good morning sir. Uh thank you so much for the opportunity. So my first question I think uh we have been deployed as a E1 better for complete 21:49 21 minutes, 49 seconds radar system. So I'm trying to understand what is the approximate order value and execution uh timeline for this 21:57 21 minutes, 57 seconds project and generally uh what kind of margin profile for this uh this kind of competency systems levels uh compared to 22:05 22 minutes, 5 seconds traditional uh BDS business and secondly uh we also uh got a partnership with 22:12 22 minutes, 12 seconds GRSC for air navigation program and what's the total potential value for this program over the next three to five 22:20 22 minutes, 20 seconds is whether we can able to extend this kind of program to other ship ship building partners like uh uh MDL or GSL 22:29 22 minutes, 29 seconds or any other uh navigation mission systems uh for the Indian Navy. Thank you for the question. 22:38 22 minutes, 38 seconds Um so first with regard to the radar system order um the this is uh a a I 22:48 22 minutes, 48 seconds would say development followed by production order. So what we will receive first is the is the is the first 22:56 22 minutes, 56 seconds phase of the production orders and then uh uh subsequently we'll be receiving the the production orders. The total uh 23:05 23 minutes, 5 seconds value of this program is to the tune of about 700 crores 23:12 23 minutes, 12 seconds uh over a I would say five to seven uh uh a five five to six year sort of time horizon. 23:21 23 minutes, 21 seconds Um uh the first branch of course as I mentioned for what we will receive in the short term we will announce it uh as 23:29 23 minutes, 29 seconds and when we we we receive it uh it will be disclosed. 23:33 23 minutes, 33 seconds Um and uh the the second one which is uh the uh air navigation system. Um this 23:43 23 minutes, 43 seconds again we had already disclosed the order that we have received uh uh already is to the tune of about 30 crores. Um from GRSC itself. Um you're absolutely right. 23:55 23 minutes, 55 seconds We expect to receive orders from all uh from several other ship builders or shipyards in including GSL 24:04 24 minutes, 4 seconds um and uh uh HSL and so on in in the in the coming quarters and and years. Um 24:12 24 minutes, 12 seconds we uh will we we estimate that again the the the total opportunity here is again to the 24:20 24 minutes, 20 seconds tune of about uh 500 cores or so. again in a in a 3 to 5 year kind of time horizon. So of order booking. 24:32 24 minutes, 32 seconds Sir, you could uh elaborate on the margin side for these programs. 24:36 24 minutes, 36 seconds Yes. Yes. Yeah. the margins for these programs obviously they they I would I would more I would categorize it just 24:44 24 minutes, 44 seconds generally to say that uh you know in this business uh we we expect to be at 24:51 24 minutes, 51 seconds uh 20 to 25% uh uh the margin um and and so these these are more or 24:58 24 minutes, 58 seconds less in line with with that with that uh with that profile. 25:04 25 minutes, 4 seconds Okay sir. Sir my second question uh on that uh space based several lines program I think the address separate 25:12 25 minutes, 12 seconds opportunity size nearly 1,000 cr and uh how much we can expect next one or two years sir and secondly uh he could 25:20 25 minutes, 20 seconds elaborate more on Indian semiconductor uh mission 2.0 O it's like it's it's one of the major attainment for the EMS 25:28 25 minutes, 28 seconds business and uh I'm trying to understand what kind of specific opportunities we have and we are looking specifically for 25:36 25 minutes, 36 seconds uh especially on supply chain for assembly testing uh marking and packaging side or we are focusing on 25:44 25 minutes, 44 seconds design and pro prototypes prototyping side. Yes. 25:51 25 minutes, 51 seconds Oh yeah. So great thanks. So so the first one with regard to the SBS program u the it is substantial. We are starting 26:00 26 minutes to see some uh orders coming in. We expect to we expect to book some of this in in in Q4. 26:07 26 minutes, 7 seconds um some of them have uh uh you know we we've been declared L1 and again we 26:15 26 minutes, 15 seconds expect to to start receiving those orders uh in in in Q4 or or Q1 of the 26:22 26 minutes, 22 seconds following year. um the the the as I said total opportunity size is is is [clears throat] there in the range of 26:29 26 minutes, 29 seconds about,000 crores uh and and uh you know we we as things progress over the next few 26:38 26 minutes, 38 seconds quarters we will be having a a clearer idea of how how much uh of that we are able to book but the things are moving 26:46 26 minutes, 46 seconds in a very positive way and uh you know we expect uh the orders to start coming in as I mention mentioned or have 26:54 26 minutes, 54 seconds already started to come in in Q4 and uh and subsequent quarters. 27:00 27 minutes Um the next point with regard to India semiconductor mission 2.0 27:07 27 minutes, 7 seconds uh this is a a new policy announcement that we saw in the budget. Uh the details are still yet to be fully 27:15 27 minutes, 15 seconds clarified uh on this front but uh we understand that uh these in in this instance there are a lot of uh there is 27:23 27 minutes, 23 seconds a major impetus and push to to involve the broader ecosystem of semiconductors including the capital equipment used in semiconductor fabs. 27:34 27 minutes, 34 seconds Um and in on in that respect uh as I was mentioning earlier one of our major new customers that we've added in the last 27:44 27 minutes, 44 seconds uh year and ramped up uh in in in in Q3 in fact um is is a is a major player. 27:52 27 minutes, 52 seconds They're they are one of the top uh global uh capital equipment suppliers to semiconductor fabs and uh they have a a 28:01 28 minutes, 1 second strong commitment uh uh in terms of their their uh procurement in India and 28:08 28 minutes, 8 seconds so we expect revenues from this sector to also increase uh u you know in a in a 28:15 28 minutes, 15 seconds very good way over the next you know two to three years. 28:22 28 minutes, 22 seconds Thank you. We will take the next question from the line of Jatin Jadab from Sahasar Capital. Please go ahead. 28:30 28 minutes, 30 seconds Hello. Am I audible? Yes, you're audible. Yeah. Uh first of all, congratulations. 28:37 28 minutes, 37 seconds Um I actually had two questions uh regarding the um uh airborne platform, the complete radar system. Sir could you 28:44 28 minutes, 44 seconds just elaborate what exactly kind what what exactly is the kind of radar which we are providing or the kind of solution which we are providing for the decline 28:53 28 minutes, 53 seconds PSU uh sure it I mean it's it's essentially a uh radar system for a helicopter 29:02 29 minutes, 2 seconds platform um and uh it is intended for multi-purpose uh uh function uh 29:11 29 minutes, 11 seconds including uh uh you search and tracking there. there's uh uh 29:18 29 minutes, 18 seconds two to for surveillance um and a few other uh uh you know modes 29:27 29 minutes, 27 seconds of I can't I can't disclose too much about the detail technical details of of the of the of the program but suffice to 29:34 29 minutes, 34 seconds say it's it's it's a for a major uh helicopter platform uh and as I mentioned more details will be announced 29:42 29 minutes, 42 seconds uh once once we [clears throat] receive the Got it. U so and the uh the partnership 29:50 29 minutes, 50 seconds which we have done with GRSC what exactly is this air navigation system which you provide if you could throw some light on it. 29:59 29 minutes, 59 seconds Yeah very simply put this is a navigation system that uh is that 30:06 30 minutes, 6 seconds enables aircrafts to land on ships land or take off from ships. It's like a air traffic controller that you would 30:14 30 minutes, 14 seconds typically see at an airport. This is a a more sophisticated advanced version of that that is uh that is there for 30:23 30 minutes, 23 seconds specifically for military uh applications and uh uh we are making the system that 30:30 30 minutes, 30 seconds is on board the ships itself. As of today there's really only one such system that's deployed on the aircraft 30:37 30 minutes, 37 seconds carrier that that we have. But there is a need uh that uh many more warships uh that that will be that are already in 30:46 30 minutes, 46 seconds service or in being are under construction uh will require this uh will require this system. So uh this what we are delivering essentially is for that. 30:59 30 minutes, 59 seconds Got it sir. Uh thank you so much. I'll get back into the queue. 31:06 31 minutes, 6 seconds Thank you. We will take the next question from the line of Rupesh Tatya from Long Equity Partners. Please go ahead. 31:14 31 minutes, 14 seconds Uh hello. Hello sir. Thank you for the opportunity. Uh my my first question is uh can you just talk about you know T90 31:21 31 minutes, 21 seconds tank stabilization system? I think there's a big effort to indigenize those systems and and how how many systems are 31:30 31 minutes, 30 seconds we present what what kind of opportunity uh that will be. Uh that is question number one. Second question is recently 31:38 31 minutes, 38 seconds uh I think ISRO one PSLV satellite uh launch PSLV launch failed. 31:45 31 minutes, 45 seconds So maybe you can give some idea about uh about you know how it'll impact us 31:52 31 minutes, 52 seconds positively negatively and any any you know subsequent orders we can expect in in this uh program. So these are the two questions initially. Yeah. 32:03 32 minutes, 3 seconds Yeah. Sorry, I didn't I didn't understand exactly or is the first question it was something about stabilization system. Could you just 32:12 32 minutes, 12 seconds repeat the T90 tanks, right? They're T90 tanks. 32:15 32 minutes, 15 seconds Yeah, I think it's a Russian design and I think India is looking to indigenize those tanks 32:24 32 minutes, 24 seconds some of the components. Are we present in that program because we we have some tank electronics, right? We have a division tank electronics. 32:32 32 minutes, 32 seconds Yes. Yes, we we have we have uh we've indigenized several things uh on on the on tank electronics uh which were 32:39 32 minutes, 39 seconds previously uh Russian designs or Russian imports. 32:44 32 minutes, 44 seconds Uh we have uh been successful in doing several uh different subsystems uh uh on 32:53 32 minutes, 53 seconds board the tank and we continue to work on a couple of others which are uh in in advanced stages of development and so on 33:01 33 minutes, 1 second including what you just uh mentioned. So uh that uh you know this is a this is a ongoing program and and there are also 33:10 33 minutes, 10 seconds some some uh potential new opportunities for an upgradation and so on that that are uh in the pipeline. 33:19 33 minutes, 19 seconds Um and u yeah so the these are for uh um 33:27 33 minutes, 27 seconds various parts of the tank including the the sighting systems to the to the uh uh 33:33 33 minutes, 33 seconds you know fire suppression systems uh and so on. So that's that was the first question and 33:41 33 minutes, 41 seconds then I think your second question was with regard to the the the unfortunate event of uh the failed launch uh few 33:50 33 minutes, 50 seconds weeks ago. Um this was uh actually the the the the 33:57 33 minutes, 57 seconds launch was the main payload uh for the launch in fact was uh something that was delivered from 34:05 34 minutes, 5 seconds Sentum. Um so it was a quite an unfortunate um u event because we were 34:12 34 minutes, 12 seconds looking forward to uh to establishing a capability that would have been again a first time for India. It was a 34:21 34 minutes, 21 seconds hyperspectral imaging payload with a with a a high level of resolution and accuracy which uh which we don't have 34:30 34 minutes, 30 seconds today. Uh that being said to your question there there uh is expected to 34:36 34 minutes, 36 seconds be a a repeat mission but uh we we are yet to receive any concrete details uh 34:43 34 minutes, 43 seconds regarding that as of now. Um but clearly the the need for such uh programs and 34:51 34 minutes, 51 seconds payloads is only increasing. uh to use uh space-based uh intelligence uh is is 34:58 34 minutes, 58 seconds is a is a critical need and uh we are we are fairly confident that the demand uh 35:05 35 minutes, 5 seconds for such payloads and electronics will only increase as we go forward. So, so, so just just going to follow up. Uh, for 35:14 35 minutes, 14 seconds both of these programs, can we expect let's say 400 500 K of orders each over the next let's say 3 to 5 years? 35:23 35 minutes, 23 seconds Yeah. Yeah. I mean, I won't let me let me not uh say specifically for the the the the program, but more more broadly 35:31 35 minutes, 31 seconds the if you if you're talking about the the tank electronics upgrades or or uh or the space-based payloads, then then 35:39 35 minutes, 39 seconds yes, we we we do see a fairly healthy pipeline to the tune of what you mentioned uh in the coming in the coming few years. 35:48 35 minutes, 48 seconds Okay. Okay. Thank you. I I'll get back in with you. Thank you. 35:54 35 minutes, 54 seconds Thank you. A reminder to all the participants, you may press star and one to ask a question. We will take the next 36:02 36 minutes, 2 seconds question from the line of Mahul Pyani from 40 cents. Please go ahead. 36:09 36 minutes, 9 seconds Hello sir, thank you so much for the opportunity. Uh sir uh if you can highlight uh how do we see the budget uh 36:19 36 minutes, 19 seconds in terms of the budget spending on defense and aerospace for our company that is question number one and I'll ask question number two later. 36:29 36 minutes, 29 seconds Yeah, I mean I think at a at a high level um several positives I think we can still take away. Clearly the 36:37 36 minutes, 37 seconds increase of uh the defense capex budget has been has been important and significant 36:43 36 minutes, 43 seconds um uh which is in in and with the continued thrust and focus on indigenous 36:51 36 minutes, 51 seconds uh uh production or indigenous design and manufacturing. 36:56 36 minutes, 56 seconds uh clearly a very positive uh sign for for companies like us who have been in this space for a long time with very 37:05 37 minutes, 5 seconds strong capabilities and and strong relationships. 37:09 37 minutes, 9 seconds Um so the the budget I think was was um inlined and reflective of the of the 37:16 37 minutes, 16 seconds of the need uh to modernize our our forces and uh you know I think I think 37:22 37 minutes, 22 seconds it it it it [clears throat] is uh a positive uh you know positive direction for for Indian companies in the space. 37:33 37 minutes, 33 seconds Uh so my second question is about the global market with a kind of uh evolving geopolitical scenario. U has our has the 37:41 37 minutes, 41 seconds prospects for a company uh you would say are we in a better position than last year in terms of the geopolitical market 37:49 37 minutes, 49 seconds scenario in terms of the total addressable market? 37:53 37 minutes, 53 seconds Yeah, very very good question. Um actually when you when with with all that's happening in in Europe and uh or 38:02 38 minutes, 2 seconds in Israel and and so on we we have seen uh on our EMS side of the business an 38:08 38 minutes, 8 seconds increased order book uh coming from some of these customers. Um so we we clearly 38:16 38 minutes, 16 seconds are seeing uh the the uh you know increased spending on on electron on on on defense hardware you know coming in over there. 38:28 38 minutes, 28 seconds Um and uh we we expect this to to continue uh you know for the next few years also because there are capacity 38:37 38 minutes, 37 seconds and uh capacity constraints in some of these geographies. So uh some of our 38:44 38 minutes, 44 seconds existing customers itself we are seeing um you know more opportunities uh coming from them which is for exports and nothing to do with in India. 38:55 38 minutes, 55 seconds [clears throat] So positive positive opportunity. Yeah. 39:00 39 minutes Right. One last question when do we know about the L1 where we have been classified by when will we know uh about the decision final decision? 39:11 39 minutes, 11 seconds We hope we hope in this in this quarter uh we should have a you know we should have the order basically 39:18 39 minutes, 18 seconds and sir can we reveal the PSU which is uh where we we have this box. 39:25 39 minutes, 25 seconds No I we will release all of that at the time of receiving the order. Okay sir. Thank you so much. 39:34 39 minutes, 34 seconds Thank you. We will take the next question from the line of Sil Jen from Lucky Investments. Please go ahead. 39:42 39 minutes, 42 seconds Yes. So, thank you for the opportunity and that's another good set of numbers. 39:45 39 minutes, 45 seconds First, uh on the BTS side, the sequential execution seems to be slightly 39:52 39 minutes, 52 seconds uh slightly on the softer end. Uh anything that we should read from from that? Uh the order book still remains 40:00 40 minutes healthy. uh if you could talk about the execution in this quarter and secondly of the BTS order book how much uh is the 40:08 40 minutes, 8 seconds island systems unexecuted uh bit already remaining in our order book so on [clears throat] the first part as 40:17 40 minutes, 17 seconds you know in our uh BTS segments typically we keep reminding all the investors that it's not supposed to be 40:24 40 minutes, 24 seconds reviewed as a viewed as a quarteronquarter uh business because it's not a linear thing it all uh the 40:31 40 minutes, 31 seconds values and the timing depend on the uh programs that are at various stages right so that way if you look at it 40:40 40 minutes, 40 seconds sequentially yes there could be up and down but there has been a trend also as you could see maybe from Q4 of last year 40:46 40 minutes, 46 seconds to Q3 of this year but that doesn't uh reflect the full year's prospects if 40:53 40 minutes, 53 seconds that's a concern and uh year on year you can see clearly it's grown uh very well and BTS 41:00 41 minutes contribution to the strand loan also is on the rise. So that way uh you can be assured that it's there is nothing concerning on that front. 41:08 41 minutes, 8 seconds Yeah. And I maybe I'll just add one point here. I you know because in fact as we mentioned in our opening remarks 41:15 41 minutes, 15 seconds it it has the the good part of the growth has has been driven by the BTS part itself. So we have seen growth 41:22 41 minutes, 22 seconds happening on the on the BTS side. Uh one thing just to keep in mind is that uh you know if you're if you're trying to 41:30 41 minutes, 30 seconds compare the order book with uh uh uh the the revenues is is just uh um something 41:38 41 minutes, 38 seconds to keep in mind that typically order execution cycle on the BTS side of the business would be typically in the range 41:44 41 minutes, 44 seconds of about 2 to 2 and a half years. Uh so uh whereas on the EMS side of the business it's a lot more shorter maybe 41:53 41 minutes, 53 seconds less than 12 months. So that that's just something that's that's important to highlight while while viewing the numbers. 42:05 42 minutes, 5 seconds Got it. And the portion of Ellen systems in a unexecuted order book for the BTS. 42:15 42 minutes, 15 seconds Um yeah, sorry don't we we don't have exactly the numbers uh with us right now but uh you know we we're making good 42:25 42 minutes, 25 seconds good progress on that. We expect to have a fair amount of billing also happening in in in Q4. 42:31 42 minutes, 31 seconds uh but you know these are there there's always a mix of orders and and uh you know we we we are expecting also pretty 42:38 42 minutes, 38 seconds healthy inflow of orders in Q4 as well uh from various types of uh of you know 42:46 42 minutes, 46 seconds even space-based electronics uh apart from the other ones that I already mentioned. 42:53 42 minutes, 53 seconds Got it. If I can squeeze in a couple of more questions. Uh on the EMS side, uh can you talk a little bit about the ramp 43:01 43 minutes, 1 second up on the semiconductor equipment? Uh if you can give any quarterly numbers this quarter and going ahead, what kind of sort of further ramp up you see if any? 43:13 43 minutes, 13 seconds Yeah, we won't disclose specific quarterly numbers, but I'll I'll just say that you know this is a a customer 43:20 43 minutes, 20 seconds that uh we had been that we had won you know just uh at the beginning of this financial year. [snorts] Uh it has been a very rapidly moving business. 43:32 43 minutes, 32 seconds Typically uh you know the timeline from when you get awarded a business to when you do a to do a a prototype and 43:41 43 minutes, 41 seconds qualification to actually starting to see a ramp up of production is something that you know 43:47 43 minutes, 47 seconds takes uh two to three years but uh in in this case it's been very fast. We've 43:54 43 minutes, 54 seconds been awarded already or we were awarded in fact already about 65 different part numbers that have all been uh uh you 44:03 44 minutes, 3 seconds know qualified and uh in in Q3 we there was a major uh you know uh the serial production deliveries have begun. 44:14 44 minutes, 14 seconds uh we expect as I mentioned earlier that on on this this financial year we expect to do at least 10 million uh dollars of 44:23 44 minutes, 23 seconds business if not more uh you know which was practically zero in the in the past year and uh going forward we we we feel 44:33 44 minutes, 33 seconds we can uh get to at least 30 million uh revenue range per year with this customer in the next two to three Yes. 44:44 44 minutes, 44 seconds So, uh actually probably even in in a two-year kind of time frame. So, uh very 44:51 44 minutes, 51 seconds very bullish about this uh segment and uh our engagement with the customer is moving in a positive way. 45:00 45 minutes Perfect. Okay. Uh and finally, sorry to interrupt Sil. I would request you to please rejoin the queue again for more questions. 45:07 45 minutes, 7 seconds Sure. 45:09 45 minutes, 9 seconds Thank you. We will take the next question from the line of Neh Sundar from Ara Capital. Please go ahead. 45:17 45 minutes, 17 seconds Yeah. Hi sir, thank you for the opportunity. Uh so just two three questions from my side. So firstly on the QRM order that Bell is expected to 45:25 45 minutes, 25 seconds receive by Q4 or Q1. So would we be part of that like would we be receiving any orders from Bell for the same for radars or any subsystems? 45:36 45 minutes, 36 seconds Uh yes we there are uh there are it's a major program clearly uh there are 45:44 45 minutes, 44 seconds certain uh active opportunities that we are engaging with uh well on um and uh 45:53 45 minutes, 53 seconds we do expect to to have um some order booking coming from from this program 46:00 46 minutes specifically I'm not able to share exactly the the the numbers us now but we have a few different opportunities 46:07 46 minutes, 7 seconds and and products that we are engaging on on on this program. 46:13 46 minutes, 13 seconds Okay sir. And uh for a longer term like two major projects are currently being talked about like the AMA program where 46:20 46 minutes, 20 seconds consortiums have been shortlisted and for the 114 Rafals that have now received the AO and approval from the MO. scope for these two programs. I know 46:29 46 minutes, 29 seconds they are longer term but would we be in any uh position to say what would be our scope if any in these projects? 46:39 46 minutes, 39 seconds Yeah. So I mean I with with regard to the Rafael program um itself uh first of 46:46 46 minutes, 46 seconds all we are already a supplier uh to this program uh as as a through 46:53 46 minutes, 53 seconds through Talis who is our major customer here. 46:57 46 minutes, 57 seconds Um we are one of only two companies I would say you know who are supplying electronics uh uh to this platform 47:05 47 minutes, 5 seconds currently and what we are supplying is in fact some something that is we are integrated into the global supply chain and it is it is being delivered and 47:14 47 minutes, 14 seconds shipped uh all over the world. Um and and we we hope and expect that as as 47:21 47 minutes, 21 seconds as uh as these programs evolve in India uh that that we will work to to uh have 47:29 47 minutes, 29 seconds a a larger workshare and and partnership with our very strategic customer uh on 47:35 47 minutes, 35 seconds on this side on the AMA. uh that I would say is still quite an early stage but uh 47:42 47 minutes, 42 seconds here again uh we we are we are positioning to work on on the various core electronic systems on board the 47:51 47 minutes, 51 seconds aircraft whether it's the radar EW or or the uh uh avionics uh that that go on 47:59 47 minutes, 59 seconds board the the program. So those are still at a at a early stage uh and and you know we we we will be closely monitoring that as uh as it evolves. 48:12 48 minutes, 12 seconds So to thalis are we supplying any electronics or any like um design or how is the agreement there? 48:20 48 minutes, 20 seconds Yeah, we supply electronics. So we supply various uh uh subsystems, electronic assemblies and so on to to to globally. 48:32 48 minutes, 32 seconds Okay. So, and just one last thing on LCA pages mark 1A. So, are we involved there? Like are we supplying any components to them? Components of subsisting. 48:41 48 minutes, 41 seconds Sorry, can you can you repeat that? 48:43 48 minutes, 43 seconds For LCA pages mark 1A to HAL, are we also involved there like the 180 numbers order that HAL is currently executing? 48:51 48 minutes, 51 seconds Um, on LCA, our our presence is fairly small. So, we don't have a a big uh presence on on board the LCA. 49:01 49 minutes, 1 second Okay, thank you so much sir and all the best. 49:06 49 minutes, 6 seconds Thank you. We will take the next question from the line of Ankor Gulati from Genuity Capital. Please go ahead. 49:16 49 minutes, 16 seconds So can you get some color on the standalone margins and when when can you sorry to interrupt in between anchor you're not audible audible now? Yes, please proceed. 49:30 49 minutes, 30 seconds Yeah. So, can you give some color on uh standalone margins? When can we expect them to steer back to uh mid dreams? 49:41 49 minutes, 41 seconds Yeah. So I I think uh you know this is where we we mention the u the the mix of business 49:50 49 minutes, 50 seconds uh whereas our uh billtospec uh business is in the 49:57 49 minutes, 57 seconds range of 20% or more. Uh the EMS side of the business is closer to 10%. 50:06 50 minutes, 6 seconds Um we do have some uh operating leverage that will open up. So uh you've seen already as we mentioned in the 9-month 50:14 50 minutes, 14 seconds period uh uh every margins have improved by about 200 basis points at the 50:22 50 minutes, 22 seconds standalone level. Typically Q4 for us is a bigger quarter also. So, so uh you know we we will uh you know we will 50:31 50 minutes, 31 seconds maintain or improve our margins in Q4 and going forward into the next years as 50:37 50 minutes, 37 seconds again we as we uh continue to to have revenue growth we will see the operating 50:44 50 minutes, 44 seconds leverage come in and we expect a steady improvement of uh margins also in the coming years. 50:54 50 minutes, 54 seconds The last question is there a seasonality in EMS and build to spec uh quarter on quarter wise or is it pretty much uh well spread out across the quarters? 51:04 51 minutes, 4 seconds Yes, we do have uh uh clearly most uh definitely especially in our BTS business there is a lot of lumpiness. 51:14 51 minutes, 14 seconds Um uh these are again the the revenues are tied to major program deliveries uh and so on. So, so we do have a fair 51:23 51 minutes, 23 seconds amount of lumpiness in our especially in our BTS business. On the EMS side of the business, it's a little bit more uh 51:31 51 minutes, 31 seconds stable. Uh but uh here again, you know, there are certain programs and customers 51:37 51 minutes, 37 seconds where uh you you will see uh you know, a spike of deliveries uh you know, in in a 51:45 51 minutes, 45 seconds specific quarter. But more or less as a trend I would look at this as a lot more um you know uh stable as compared to our 51:55 51 minutes, 55 seconds BTS uh business which tends to be a lot more lumpy in nature. 52:01 52 minutes, 1 second Okay. Thanks. 52:05 52 minutes, 5 seconds Thank you. We will take the next question from the line of Shahi Vijay from Capstock and Securities. Please go ahead. 52:14 52 minutes, 14 seconds Thank you for the opportunity sir. My question is regarding the subsidiary just a followup. So for the Canada subsidiary that we wrote of around 50 52:22 52 minutes, 22 seconds crores which was for the uh rec the sorry am I audible? Yeah yeah go ahead. 52:29 52 minutes, 29 seconds Yeah. So for the Canada subsidiary 50 cr that we wrote up for the receivables can we expect a similar write up for the friend subsidiary as because I 52:37 52 minutes, 37 seconds understand that the 150 cr is investment in Yes sir. 52:44 52 minutes, 44 seconds Yeah. Yeah. So sorry to interrupt. Uh you are asking if there is anything similar expected uh relating to French in like 50 crores. 52:54 52 minutes, 54 seconds Okay. So no uh as far as the French subsidiaries are concerned in standalone. Uh there is uh nothing that 53:00 53 minutes we can we expect to come and impact uh in Q4 or in the future. uh whatever the investment payment that has been taken 53:08 53 minutes, 8 seconds and uh there is no uh accounts receivable that is doubtful or anything because there have been some steady 53:15 53 minutes, 15 seconds payments also coming in all right and sir so regarding the 50 cr Canada subsidiary I talk can we expect 53:23 53 minutes, 23 seconds some recoverable amount in the future so that's a good question so when the accounts were finalized and audited uh 53:32 53 minutes, 32 seconds we took a clear assessment of what is outstanding and how much is uh receivable uh recoverable. So to tell 53:41 53 minutes, 41 seconds you what we wrote off or provided for is after considering the uh values that we 53:47 53 minutes, 47 seconds received in this quarter about 500k dollars or about yeah five five00 crores has been received and towards the end 53:55 53 minutes, 55 seconds when the entities get eventually wound up any subsequent cash collections from uh 54:02 54 minutes, 2 seconds customers that we uh carry may also come back to India after everything gets settled. and the court order gets 54:10 54 minutes, 10 seconds received. So if at all there could be very minimal but not a major recovery that we can expect. 54:17 54 minutes, 17 seconds Got it. Thank you sir and all the best. Welcome. Thank you. 54:23 54 minutes, 23 seconds Thank you. We will take the next question from the line of Karan Sanul from Nveshai. Please go ahead. 54:31 54 minutes, 31 seconds Uh yeah thank you for the opportunity. 54:33 54 minutes, 33 seconds Uh so just wanted to understand uh uh what uh what what product are we doing for the uh semiconductor uh uh business currently. 54:46 54 minutes, 46 seconds Yeah, these are uh our customer is what our customer is one of the leading uh 54:54 54 minutes, 54 seconds suppliers of the uh capital equipment used in the semiconductor manufacturing process itself. 55:03 55 minutes, 3 seconds Um and what we supply to them essentially are box builds and uh PCBAS. 55:09 55 minutes, 9 seconds These are built to print uh uh you know uh services where it's the customer's design and we are contract manufacturer 55:18 55 minutes, 18 seconds for them. So this sits in our EMS uh part of the business and uh as I mentioned we supply either box bills or PCBAs uh to them. 55:29 55 minutes, 29 seconds So majorly it would be a part of the EMS business right the entire uh yes it's all part of the EMS business. 55:35 55 minutes, 35 seconds Yes. Uh and uh just to confirm uh uh uh previously you mentioned uh it is a $10 55:43 55 minutes, 43 seconds million opportunity for FI26 and uh it would be 30 million for the next two years, right? 55:52 55 minutes, 52 seconds No. Yeah. Yes. 10 million for FI26 is correct and uh and we expect it to get to an annual run rate of about 30 56:01 56 minutes, 1 second million uh in in two years. 56:06 56 minutes, 6 seconds Understood. One last question. Uh are we expecting uh uh any other semiconductor uh uh client or you know coming up in a 56:15 56 minutes, 15 seconds big way apart from what we have already uh uh received uh because there are also talks in the industry that another you 56:24 56 minutes, 24 seconds know big semiconductor equipment player is targeting India uh for the uh you know setting up basis. So are we in 56:31 56 minutes, 31 seconds advanced talks or any intimation from the client to uh you know explore uh products with them? 56:40 56 minutes, 40 seconds We are in we are exploring I I can't uh say anything that I can I can disclose 56:47 56 minutes, 47 seconds at at a very advanced stage uh to to to be disclosed at the current stage but we are we are um you know very uh you know 56:56 56 minutes, 56 seconds very well aligned in terms of our capabilities and processes for this type of business. 57:02 57 minutes, 2 seconds So, so as in and when opportunities come up, uh I'm fairly confident we will be uh you know well considered for this. 57:12 57 minutes, 12 seconds Thank you so much. Thank you. 57:17 57 minutes, 17 seconds Thank you. We have the next follow-up question from the line of Sil Jen from Lucky Investments. Please go ahead. 57:26 57 minutes, 26 seconds My questions have been answered. Uh thank you. 57:31 57 minutes, 31 seconds Thank you. We will take the next question from the line of Ananta Shenoi from AS Capital. Please go ahead. 57:40 57 minutes, 40 seconds Uh sir, my question is from the semiconductor side. uh since uh many of the companies in the semiconductor who are working on the capital equipment 57:47 57 minutes, 47 seconds side are like it's a high margin settlement for us and since we are reporting it in the EMS side like what 57:54 57 minutes, 54 seconds kind of margins are they similar to the EMS margin of 10 12% or do we expect higher margin on semiconductor side 58:04 58 minutes, 4 seconds no it's uh the the the business model is what drives the margins here uh you know 58:10 58 minutes, 10 seconds so so we we Do we do expect I mean you may have a very minor uh variation but a 58:18 58 minutes, 18 seconds rough uh mean of about 10% uh IIDA is what we feel is a is a sustainable 58:27 58 minutes, 27 seconds uh long-term margin for any EMS business in in this type of uh uh industries whether it is defense aerospace whether 58:36 58 minutes, 36 seconds it's semiconductors or industrials and so on. Of course if as you go into into um 58:44 58 minutes, 44 seconds uh consumer and so on those drop but um you know we typically at we have done 58:50 58 minutes, 50 seconds various global benchmarking and all of that and uh um you know the the EMS 58:58 58 minutes, 58 seconds business in in these type of sectors are typically around the 10 11% uh levels. 59:07 59 minutes, 7 seconds Sure. Thank you. My next question is the whole as I mentioned sorry yeah no I was just mentioning again that it's important to keep in mind these are all cost plus models 59:15 59 minutes, 15 seconds because the customer designs the product and we are manufacturing for them um so we always obviously look at various ways 59:23 59 minutes, 23 seconds to to improve productivity and reduce cost and so on but uh you know in in in 59:30 59 minutes, 30 seconds with uh with EMS business it's typically around 10 10 11% is is what is to be expected Sure. 59:39 59 minutes, 39 seconds Uh my next question is about the Viru Paka like we were supposed to get the order. Did we have already win the order and for the tile config exit receiver part have you won the order part? 59:51 59 minutes, 51 seconds Yes we have we won the order and the programs are in execution. So okay like what is the quantum any can 59:59 59 minutes, 59 seconds you throw some light what kind of these are these are development orders at this stage. So, so they're uh uh I 1:00:08 1 hour, 8 seconds would say uh you know still still at the smaller stage. Uh obviously when these come into production they will be much 1:00:15 1 hour, 15 seconds larger uh programs uh going into hundreds of crores of possibilities but at this stage these 1:00:23 1 hour, 23 seconds are development orders. So they're they're much uh there are smaller orders. 1:00:30 1 hour, 30 seconds Thank you. We will take the next follow-up question from the line of Rope Tatya from Long Equity Partners. Please go ahead. 1:00:38 1 hour, 38 seconds Yeah. Hello sir. Thank you. Thank you for the followup. This Viru Paka order I have a follow up on that. So 1:00:47 1 hour, 47 seconds will we get major share? Are there like more competitors in this space? Can can you give some idea? And there are 250 uh 1:00:56 1 hour, 56 seconds SU30 mark ones right that that will come for upgrade 2530 per year. 1:01:01 1 hour, 1 minute, 1 second So, so what kind of market share we we expect in in this product? 1:01:08 1 hour, 1 minute, 8 seconds Yeah, it's a bit early at this stage to be uh to to give a very confident clear answer with with regard to market share and so on. Uh there's still various 1:01:17 1 hour, 1 minute, 17 seconds things that uh um you know will will play out as the as the development uh progresses. 1:01:24 1 hour, 1 minute, 24 seconds Um just I think suffice to say that uh you know we are there there are you know 1:01:31 1 hour, 1 minute, 31 seconds two other major players or competitors in in this part of the program. 1:01:38 1 hour, 1 minute, 38 seconds Um and um um you know the our uh but but we are 1:01:45 1 hour, 1 minute, 45 seconds building a a very critical and important part of the uh entire radar system itself. Sir. 1:01:55 1 hour, 1 minute, 55 seconds Okay. Okay. And sir then other than I mean some of these programs were talked about in SBS in tank electronics in VUBA 1:02:03 1 hour, 2 minutes, 3 seconds any any other major programs that that we are you know looking to win market share anything above let's say 300 kind 1:02:10 1 hour, 2 minutes, 10 seconds of sites anything bigger than that maybe you can give some idea around that. 1:02:16 1 hour, 2 minutes, 16 seconds Uh it's um it's a bit early for me to disclose uh those at this stage. there 1:02:23 1 hour, 2 minutes, 23 seconds are clearly multiple ions in the fire that that uh we are working on. Um I 1:02:30 1 hour, 2 minutes, 30 seconds would say broadly in the areas again of electronic warfare uh systems that 1:02:36 1 hour, 2 minutes, 36 seconds that's a big focus area for us. Um and uh uh you know I'm not able to diverge at this stage the the programs uh 1:02:44 1 hour, 2 minutes, 44 seconds specifically but uh we we have a pretty healthy pipeline of opportunities coming up uh there as well. 1:02:52 1 hour, 2 minutes, 52 seconds Okay. Okay. Thank you. Thank you for answering my questions. Thank you. 1:02:59 1 hour, 2 minutes, 59 seconds Thank you. We will take the next question from the line of Prayv Bastavala and individual investor. Please go ahead. 1:03:08 1 hour, 3 minutes, 8 seconds Yeah. Uh congratulations uh Nil. uh I think so after very long time some very decisive decision very tough decision 1:03:16 1 hour, 3 minutes, 16 seconds has been taken and I'm sure that this will go a long way in creating clearing a path for this organization 1:03:24 1 hour, 3 minutes, 24 seconds so uh my uh questions are basically how you place your uh this company from where you want to take it say maybe it 1:03:32 1 hour, 3 minutes, 32 seconds may be around 900 to,000 cr turnover say individual level from this level where we uh we are looking at in next career 1:03:41 1 hour, 3 minutes, 41 seconds and how you want to concentrate on the EMS business itself which is going to be quite bigger on the coming time when we are seeing the global opportunities and 1:03:50 1 hour, 3 minutes, 50 seconds especially even in the defense when we others are expanding uh uh do you look at it that how we can move to tire one 1:03:59 1 hour, 3 minutes, 59 seconds level uh in this particular space when especially is very good in as far as uh 1:04:06 1 hour, 4 minutes, 6 seconds space sector please thank Thank Thank you, Prab. And uh I must 1:04:14 1 hour, 4 minutes, 14 seconds you've been a you've been a long-term investor and a and a guide for us in you know over the years. So uh um you know 1:04:23 1 hour, 4 minutes, 23 seconds the some of these uh I guess difficult decisions as you as you rightly mentioned uh are are also uh things that 1:04:31 1 hour, 4 minutes, 31 seconds that we take uh uh as a result of of the of the strong and and uh clear inputs 1:04:38 1 hour, 4 minutes, 38 seconds from from investors like yourself. So uh appreciate uh the the vote of confidence on on on this decision. Um with regard 1:04:47 1 hour, 4 minutes, 47 seconds to our path forward uh here we have obviously very aggressive growth plans. 1:04:53 1 hour, 4 minutes, 53 seconds Uh I think uh uh you know starting first on on the defense side of the business. 1:04:59 1 hour, 4 minutes, 59 seconds Um we we we have uh strong objectives of uh of uh growing this multiffold in the 1:05:07 1 hour, 5 minutes, 7 seconds coming years. uh I won't I won't specify exactly a number in terms of guidance or anything like that but uh but uh you 1:05:15 1 hour, 5 minutes, 15 seconds know we we will we will grow this uh substantially. Um as you already see uh 1:05:22 1 hour, 5 minutes, 22 seconds you know we we have uh we we expect to close this year's order book already at uh at a at a very healthy rate based on what we are seeing uh from from Q4 also. 1:05:34 1 hour, 5 minutes, 34 seconds Um and the pipeline of orders and opportunities that we are driving internally uh is is quite aggressive. So, so we do 1:05:43 1 hour, 5 minutes, 43 seconds we do expect to see a multiffold uh increase of our defense and space business and big part of this is is also 1:05:52 1 hour, 5 minutes, 52 seconds driven by uh our our our objective to to position at system level. uh and and as I mentioned already 1:06:01 1 hour, 6 minutes, 1 second on the call today uh two of the first major u validations of this strategy have come 1:06:08 1 hour, 6 minutes, 8 seconds in the form of uh uh this navigation system and the full radar system which we are expecting the order for uh in the 1:06:15 1 hour, 6 minutes, 15 seconds current quarter. Uh so we're well on our way on that side. Secondly on the EMS side of the business again uh we we uh 1:06:26 1 hour, 6 minutes, 26 seconds you on on on one side have have been focused on the the 1:06:34 1 hour, 6 minutes, 34 seconds product segments that we've been addressing you know in terms of apart from of course defense aerospace but also industrial 1:06:43 1 hour, 6 minutes, 43 seconds uh medical uh and mobility uh we we and and and I would say the the the vision for this part of the business 1:06:52 1 hour, 6 minutes, 52 seconds going forward also is is is quite positive. Uh we want to ensure we have high quality customers. You know this is 1:06:59 1 hour, 6 minutes, 59 seconds a business that uh you know is very easy to take uh business at at a low margin and and scale but uh we want to ensure 1:07:08 1 hour, 7 minutes, 8 seconds uh we we take highquality customers and and ensure uh that that our uh execution 1:07:16 1 hour, 7 minutes, 16 seconds of these type of programs are are are done uh well. A lot of uh investment and 1:07:23 1 hour, 7 minutes, 23 seconds and uh uh effort is going into our own internal processes and systems in terms of implementing automation AI uh kind of 1:07:32 1 hour, 7 minutes, 32 seconds solutions in in critical core areas. Um and uh uh that also I think will be key 1:07:40 1 hour, 7 minutes, 40 seconds point of differentiation as as this as this business evolves. Uh pipeline is healthy. I think we talked also on a few 1:07:48 1 hour, 7 minutes, 48 seconds of these areas throughout the call today. Our defense and space or defense and aerospace global customers itself 1:07:55 1 hour, 7 minutes, 55 seconds are are seeing uh increased uh demand volume. So we will continue to work on that. We have certain strategic 1:08:02 1 hour, 8 minutes, 2 seconds opportunities there. Um we uh also uh on on some of the newer 1:08:10 1 hour, 8 minutes, 10 seconds areas whether it's industrial or or uh you know the semiconductor kind of equipment are all also progressing uh 1:08:18 1 hour, 8 minutes, 18 seconds well and u you know even in terms of new customer additions and so on we have a very clear uh plan and strategy that uh 1:08:28 1 hour, 8 minutes, 28 seconds of of identifying key target accounts and uh having a a sales team and sales force that's driving to to uh you know capture that business. 1:08:39 1 hour, 8 minutes, 39 seconds So these these are some of the actions that are ongoing and and as I say u you know we we want to we want to scale up 1:08:46 1 hour, 8 minutes, 46 seconds this business in an aggressive way and u you know working the granular details to make sure that uh it's it's executed 1:08:56 1 hour, 8 minutes, 56 seconds well. Yeah, that would be my second last question that basically uh uh EMS is a business which will grow at 10 uh which has an ROI of 10 to 12%. 1:09:09 1 hour, 9 minutes, 9 seconds And it's a different kind of a business but when we are looking at defense and aerospace sector they many of them 1:09:16 1 hour, 9 minutes, 16 seconds command an IITA of 35 to 40%. So what we are planning to move to that kind of an EVA level or are we even planning for 1:09:25 1 hour, 9 minutes, 25 seconds tire one supplier even coming 3 to five years with some JVS? 1:09:31 1 hour, 9 minutes, 31 seconds Yeah, we we are we are pursuing you know the the it is not one at the 1:09:39 1 hour, 9 minutes, 39 seconds expense of the other I would say for basically while on the EMS side of the business one of the things that is important to 1:09:48 1 hour, 9 minutes, 48 seconds highlight is that while the AIDA margins are in the range of 10 11% the ROC for this business can be north 1:09:55 1 hour, 9 minutes, 55 seconds of 20 25% because capital requirement is much lower as compared to the defense and space products business. So, uh so 1:10:05 1 hour, 10 minutes, 5 seconds this will continue to be an important part of our overall portfolio and uh and we'll continue to to develop uh that that part of the business. 1:10:15 1 hour, 10 minutes, 15 seconds uh but clearly in terms of uh uh uh uh you know significant new investments on 1:10:22 1 hour, 10 minutes, 22 seconds on uh on on the defense and aerospace product side to position ourself as a tier one either through our own internal 1:10:31 1 hour, 10 minutes, 31 seconds R&D development but also through the strategic partnerships with the global players are something that we are 1:10:38 1 hour, 10 minutes, 38 seconds clearly uh uh pursuing. Uh we have the the the ability to to increase 1:10:47 1 hour, 10 minutes, 47 seconds um the AIA margins to the levels that you just mentioned will come largely uh 1:10:54 1 hour, 10 minutes, 54 seconds if they are indigenous uh uh uh designed products and uh this is where you know 1:11:00 1 hour, 11 minutes our our focus of uh of uh developing and strengthening more and more on the 1:11:07 1 hour, 11 minutes, 7 seconds internal R&D capabilities is a key uh part part of our our strategy. Uh but in parallel we also pursue the partnerships 1:11:16 1 hour, 11 minutes, 16 seconds with with global players to capture opportunities that that are there more imminently. And I think this example of 1:11:24 1 hour, 11 minutes, 24 seconds uh of the of the uh GRSC partnership is one wherein we actually have technology 1:11:31 1 hour, 11 minutes, 31 seconds coming from a uh European partner uh and uh was something that enabled us 1:11:37 1 hour, 11 minutes, 37 seconds to quickly access and capture the the uh uh the market for this. So we follow multi-prong strategy to to be able to to 1:11:47 1 hour, 11 minutes, 47 seconds to win business and also grow our margins. 1:11:54 1 hour, 11 minutes, 54 seconds Thank you very much ladies and gentlemen. Due to time constraint we will take that as a last question for today. And with that concludes the 1:12:02 1 hour, 12 minutes, 2 seconds question and answer session. I now hand the conference over to Miss Krishna Doshi for closing comments. Thank you and over to you ma'am. 1:12:11 1 hour, 12 minutes, 11 seconds Thank you so much. On behalf of Fashika Institutional Equities, we would like to thank the management of Sentum Electronics Limited for the call and 1:12:18 1 hour, 12 minutes, 18 seconds many thanks to the participants for joining the call. Thank you very much sir. We may now conclude the call. 1:12:26 1 hour, 12 minutes, 26 seconds Thank you everyone. On behalf of Centum Electronics Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines. 1:12:35 1 hour, 12 minutes, 35 seconds Thank you. Thank you all for participating. Thank you. Thank you sir.