Data Patterns (India) Limited — Q2 FY26

Data Patterns (India) Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=sKLR99sM1B0 Published: 6 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the data patterns India Limited Q2 and H1 FY26 earnings 0:10 10 seconds conference call hosted by Go India Advisors LLP. As a reminder, all the participants line will be in the listenonly mode and there will be an 0:19 19 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:27 27 seconds operator by pressing star then zero on your touchtone telephone. Please note that this conference has been recorded. 0:34 34 seconds I now hand the conference over to Monali Jen. Thank you and over to you ma'am. 0:41 41 seconds Uh thank you Angelie. Good morning everyone and welcome to data patterns India limited earnings call to discuss 0:47 47 seconds the Q2 and H1 FY26 earnings. We have the senior management of the company on call. Mr. Srangar Rajan, chairman and 0:55 55 seconds managing director. Mr. Ward Subraman, chief financial officer. We must remind you that the discussion today's call may include certain forward-looking 1:03 1 minute, 3 seconds statements and must be therefore viewed in conjunction with the risk that company faces. I now request Mr. Angar Rajan to take us through the company's business outlook and financial highlight 1:12 1 minute, 12 seconds subsequent to which we can open the floor for Q&A. Thank you and over to you sir. 1:18 1 minute, 18 seconds Uh thank you Manali. Good morning ladies and gentlemen. I'm delighted to welcome you all to the Q2 and H1 FY26 earnings 1:28 1 minute, 28 seconds call. I trust we had a chance to go through our earnings presentation available on our stock exchanges and on our company website. 1:36 1 minute, 36 seconds Before Wenger takes you through the financial highlights, I'd like to begin with a few key business updates and strategic insights from our side. 1:46 1 minute, 46 seconds We delivered strong revenue growth during Q2 and H1 FI26. The top line more than doubling year on year at rupees 407 1:54 1 minute, 54 seconds crores compared to H1 of last year along with robust growth in AIDA and profits. 2:01 2 minutes, 1 second Margins were lower during the period owing to the execution of a strategic project amounting to rupees 180 crores during the quarter. The contract was 2:10 2 minutes, 10 seconds taken at a competitive price considering long-term possible opportunities. 2:15 2 minutes, 15 seconds Despite this, our profitability remains healthy. EITA and CAT stood at 100 crores and 75 crores respectively. Our 2:23 2 minutes, 23 seconds order book including the orders negotiated and the pending receipt stands at rupees stands at around 1,300 crores with fresh order inflows of 351 2:32 2 minutes, 32 seconds crores during H1 including significant orders from BRAMOS and ECIS. 2:38 2 minutes, 38 seconds In H1 we also secured EW orders developed to QIP fund. So far we've utilized approximately 122 crores from the QP proceeds for product development. 2:48 2 minutes, 48 seconds The products are at advanced stage of development. We expect more high value orders in the coming quarters as our technology and products gain wide acceptance among customers. 3:00 3 minutes Our export order book order book remains healthy at around 80 crores. The transportable position approach radar 3:07 3 minutes, 7 seconds TAR exported to European customer has successfully completed site acceptance. 3:12 3 minutes, 12 seconds We expect some positive traction from international markets at data patterns. We are proactively developing systems well ahead of formal 3:21 3 minutes, 21 seconds requirements to ensure we are ready with these opportunity when as and when these opportunities emerge. 3:27 3 minutes, 27 seconds We effectively participate in a more tenders. It is success. It is essential for companies to have products that are already developed and internally audited. 3:36 3 minutes, 36 seconds Our approach focus on anticipating future defense needs and building indigenous solutions in advance. This strategy not only enhance our 3:44 3 minutes, 44 seconds eligibility for high high value tenders but also positions us as a preferred partner. 3:50 3 minutes, 50 seconds As we pursue growth, our focus on profitability remains intact and we continue to prioritize quality margins over short-term expansion. The company 3:59 3 minutes, 59 seconds is transitioning from a subsystem supplier to a full systems integrator designing complete radar and EW systems with in-house expertise 4:08 4 minutes, 8 seconds creating a strong differentiation with the market. We also continue to focus on investing in people infrastructure cater to the future expansion. 4:17 4 minutes, 17 seconds Looking ahead, the overall business environment looks remains encouraging both in India and international markets with a healthy order pipeline and strong 4:26 4 minutes, 26 seconds execution visibility. We're confident of achieving earlier guidance on revenue and margins. 4:32 4 minutes, 32 seconds With that, I now request wer to take you through the financial performance in detail. Thank you sir and good morning everyone. 4:41 4 minutes, 41 seconds I will take you through the key highlights of our financial performance for the quarter and half year ended 30th September 2025. 4:48 4 minutes, 48 seconds Q2 FI26 revenue stood at 308 crores up by 238%age year on year and 210%age 4:57 4 minutes, 57 seconds quarteron quarter driven by strong execution across multiple programs. H1 FI26 revenue grew 109%age year on year 5:07 5 minutes, 7 seconds to 47 crores reflecting sustained operational momentum. 5:13 5 minutes, 13 seconds Abita for Q2 stood at 69 crores up 100% yearon year. H1 AIA was 101 cr higher by 5:23 5 minutes, 23 seconds 41%age year on year. Net profit for Q2 was 49 cr up 63%age year on year. For H1 5:31 5 minutes, 31 seconds it was 75 cr a growth of 18% year on year. Q2 gross margin stood at 39%age 5:38 5 minutes, 38 seconds while EITA margins was 22%age and PAT margin was 16%age. 5:44 5 minutes, 44 seconds Margins for the quarter were lower due to the execution of the strategic low margin contract explained by our CMD. 5:52 5 minutes, 52 seconds However, the core profitability remains healthy and margins are expected to improve in H2 with more balanced product 5:59 5 minutes, 59 seconds mix. Working capital is well controlled at 343 days. We expect to collect most 6:06 6 minutes, 6 seconds of our current receivables in H2 and aim to maintain the working capital days at the similar level in for the full year. 6:14 6 minutes, 14 seconds Strong H1 growth demonstrates our execution strength and robust demand environment with a solid order book and encouraging 6:23 6 minutes, 23 seconds inflows during the first half. We remain confident of achieving our full year revenue and EITA margin guidance. Thank 6:31 6 minutes, 31 seconds you. And now we open the floor for questions. 6:39 6 minutes, 39 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 6:46 6 minutes, 46 seconds star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you 6:53 6 minutes, 53 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 7:01 7 minutes, 1 second wait for a moment while the question queue assembles. 7:08 7 minutes, 8 seconds Ladies and gentlemen, in order to ensure that the management is able to address all the participants in the question queue, please restrict yourself to two questions per participants. 7:21 7 minutes, 21 seconds The first question comes from the line of Amit Dshit from Gold Snatches. Please go ahead. 7:29 7 minutes, 29 seconds Yeah. Hi, good morning everyone and uh thank for the opportunity. 7:33 7 minutes, 33 seconds Congratulations for a very strong set of numbers sir. Uh couple of questions from my side. The first one is on the 7:40 7 minutes, 40 seconds strategic order that we executed. Uh essentially as it seems from the financial it was a short-term order 7:47 7 minutes, 47 seconds executed in real quick time. Uh do we expect to participate in more such orders you know as as and when they 7:56 7 minutes, 56 seconds come? If so, can you uh mention your uh you know where do you uh think the uh 8:03 8 minutes, 3 seconds you will bid for these orders? Uh I I believe it is in the in radar in this case but whether it will be radar, EW uh 8:10 8 minutes, 10 seconds I mean which uh segment uh you are looking for to bid and how do we see this going ahead? I mean because that is 8:18 8 minutes, 18 seconds certainly margin derivative but revenue accretive. 8:23 8 minutes, 23 seconds See I can't discuss much on the strategic order that's why it's called a strategic order but we took this contract because uh there is a large potential for multiple such contracts. 8:34 8 minutes, 34 seconds Uh what we need to say from our side is that the product has been executed very well. Customers happy on the performance 8:41 8 minutes, 41 seconds of the product and uh there are two things take away from this uh product. 8:46 8 minutes, 46 seconds One is there is a future potential. I can't explain the potential at the present moment due to the nature of the 8:53 8 minutes, 53 seconds contract and uh but there is a future potential. Point two, uh this is the 9:00 9 minutes first time the company has taken such a large contract which involves u power systems, building construction, 9:08 9 minutes, 8 seconds mechanical systems, uh design of something like 140 tons of material as a payload which can be moved. You know 9:16 9 minutes, 16 seconds this is a whole it's a very complex mechanical electromechanical system. The electronics also is state-of-the-art worldass. So to do all this we need to 9:25 9 minutes, 25 seconds put a a large team to see that we can execute this contract with customer uh focus and uh sat you know satisfying the 9:35 9 minutes, 35 seconds customer needs and meeting the complete specifications we could do that. This itself is a good thing because from going from uh you know a smaller product 9:44 9 minutes, 44 seconds company to large systems company this uh development or capability development is very important and I think we have 9:51 9 minutes, 51 seconds managed that that is the second important thing which we could achieve in this. This is all I can say at the present moment as regards future such contracts similar contracts etc. 10:02 10 minutes, 2 seconds Obviously when something happens when we believe it is strategic and gives uh technology perspective as well as uh 10:10 10 minutes, 10 seconds revenue growth and bottom line future growth we will obviously participate but it's a competitive environment. We may or may not be able to get all these 10:19 10 minutes, 19 seconds contracts but yes uh uh data patterns is wants to grow uh in this line of 10:26 10 minutes, 26 seconds business complete systems. So we're working both on the radars and EW and other areas of avionics as well. So we 10:34 10 minutes, 34 seconds do take up strategic contracts in all areas of applications not necessarily on these radars. I hope it answers your question. 10:43 10 minutes, 43 seconds Uh yes sir. Uh thank you very much. The second one is on uh our consortium for AMA. So uh this consortium is with BML 10:52 10 minutes, 52 seconds and um and Batge. uh just wanted to understand the rationale of participating with these two uh partners 11:01 11 minutes, 1 second and what is our scope uh in the consortium and uh I know it is very early but if you could uh just highlight 11:09 11 minutes, 9 seconds the kind of you know share we will get out of total value of AMA or whatever metrics you want to quantify that would 11:17 11 minutes, 17 seconds be very helpful sir like you said it's a bit too early it's RFI response and after RFI shortlisting 11:24 11 minutes, 24 seconds takes place and RFP happens and then the contract goes to somebody only one company which gets a contracts. So it's 11:31 11 minutes, 31 seconds a very early for me to comment on it but why are we in this is because Barat is a 11:39 11 minutes, 39 seconds a large Indian company with a lot of capability building complete uh systems and uh well positioned for growth and 11:48 11 minutes, 48 seconds they're also similar to us in the sense they do want to do everything in India. 11:52 11 minutes, 52 seconds So that makes us uh u in terms of alignment it is very good. Second area is that uh our focus has been in 12:00 12 minutes avionics and we do state-of-the-art avionics in the country. Matter of fact the more what we do nobody else in India 12:09 12 minutes, 9 seconds does in terms of avionics range. So we have the cockpit solutions, we have radars, we have electronic warfare, we 12:17 12 minutes, 17 seconds have a whole lot of other systems which can go into uh into any fight to aircraft. So uh we can add value in all 12:25 12 minutes, 25 seconds of them and also electronic integration which is necessary as part of this. 12:29 12 minutes, 29 seconds Exactly what role what each one would play will have to be decided based on how the overall thing pans out. But 12:39 12 minutes, 39 seconds I think it's a uh it's a good fit. You wait and watch what the customer says and whether there's an opportunity for us to get a contract or not. We should 12:47 12 minutes, 47 seconds be able to talk about it a bit later as more clarity arises in these situations. 12:53 12 minutes, 53 seconds Okay sir. Great. Uh thank you so much and all the best. Thank you. 13:01 13 minutes, 1 second The next question comes from the line of Jay Kant from Bandan Alternatives. Please go ahead. 13:08 13 minutes, 8 seconds Hello. Yeah. Uh good morning sir. Uh uh thanks for the opportunity. Uh very strong set of numbers. Sir I just wanted 13:15 13 minutes, 15 seconds to ask you there was this recently DRT had come out with this RFI for shared aperture antennas where there will be merging radars EWS and communications. 13:25 13 minutes, 25 seconds So I don't know how much you can share about this. So I just wanted to get your opinion with regards to how data web patterns going ahead with that. And plus 13:33 13 minutes, 33 seconds there was this uh uh just uh wanted to get a sense from you for the jammer pods for the uh uh super sukoy if it is 13:41 13 minutes, 41 seconds possible by data patterns if the whatever is being planned by the mod. Yeah, that's what I said. Thank you. 13:47 13 minutes, 47 seconds Uh regarding first one RFI I'm not clear exactly which one you're referring to. 13:51 13 minutes, 51 seconds What is shared aperture radar? I I'm not very clear. So this is this is under the DRDO DDF where they are planning to have 13:58 13 minutes, 58 seconds this shared aid radars merging the radar CWS and coms to slash the RCS on battle 14:05 14 minutes, 5 seconds platforms especially for your air force and your Navy ships. Yeah and ground vehicles. 14:09 14 minutes, 9 seconds I I'm not aware of uh particular requirement talking about so I'm not able to comment on it. As regard the 14:16 14 minutes, 16 seconds jammer pod, yes, we have developed the pod for the super super and uh that testing is happening in house. We've 14:26 14 minutes, 26 seconds already offered this to air force and there's a air force team also addressing this and understanding our 14:33 14 minutes, 33 seconds what we've done. So the process is on at the present moment. That's all I can say. I I don't know what else you want 14:41 14 minutes, 41 seconds me to say because I think we meet requirement specifications. So a pod is developed. It is used funds and 14:48 14 minutes, 48 seconds developed the system. It's just not the pod but also the complete DW suite for the super 14:55 14 minutes, 55 seconds pod is part of it. So yes it is under evaluation and uh further development 15:02 15 minutes, 2 seconds along with uh you know reps from air force. 15:07 15 minutes, 7 seconds Uh and so one more thing uh there was this news wherein uh the radars which were used for your MC 29s there were 15:14 15 minutes, 14 seconds some issues. So are we going to be uh supplying some of it? 15:21 15 minutes, 21 seconds See these are all um a lot of things comes in the newspaper and article comes I can't comment on so many articles is 15:28 15 minutes, 28 seconds coming where the origination article I really don't know uh we have developed our own radars for uh which can be 15:36 15 minutes, 36 seconds fitted into MC 29 as well as 230 and such similar fighter aircrafts we have a program running is internally funded and 15:45 15 minutes, 45 seconds uh we are building the products these are all an advanced stage of development but how it will pan out where it really 15:52 15 minutes, 52 seconds go is really we can't comment on it because there's a lot of uh uh this this is based on air force and navy 15:59 15 minutes, 59 seconds requirements so how the the paper will proceed people aware that we are doing things but that's all I can say and we 16:06 16 minutes, 6 seconds continue to complete development and take it to a level of uh uh completion so that then it can be considered for 16:13 16 minutes, 13 seconds the requirement thank you sir I'll join back to you thank Thank you. 16:23 16 minutes, 23 seconds The next question comes from the line of Deepen from Philip Capital. Please go ahead. 16:30 16 minutes, 30 seconds Thank you for the opportunity sir and congratulations on a very great set of numbers. So my first question is uh I 16:37 16 minutes, 37 seconds wanted to know uh so how are the autoins which are expected in 2 and beyond? So any large or high value platform or 16:46 16 minutes, 46 seconds platform related subsystem expected uh because your guidance is close to around 1,000 crores in second half and 2,000 to 16:54 16 minutes, 54 seconds 3,000 cr in 18 to 24 months. So any high value so color on high value platforms would be helpful. 17:02 17 minutes, 2 seconds Uh I don't want to talk about specific future contracts on an open line. Uh I should I should say yes there are more 17:09 17 minutes, 9 seconds orders expected as you go along in H2 and that is why the guidance of uh what has been given we expect more contacts 17:17 17 minutes, 17 seconds to happen in the next 3 to four months time u that has to happen and uh regarding 17:25 17 minutes, 25 seconds rest of the year be beyond that I think at the present moment I wouldn't want to comment we'll consolidate for the year now and understand what the auto book is 17:32 17 minutes, 32 seconds going to be like next year uh what new pipeline we're looking at next And then that will come on the earnings call probably post this year. We give 17:41 17 minutes, 41 seconds you some guidance but uh we don't have any particular guidance on that and mobile. 17:47 17 minutes, 47 seconds Got it. Well sir any update on Brahmo Seeker and uh so like we were expecting it to get some contrial contract uh in this quarter. So any updates there? 17:59 17 minutes, 59 seconds Yes negotiations have completed. So the contract has to come and uh we are already in advanced stage of product development. 18:07 18 minutes, 7 seconds So yeah we are very keen to see that that contract comes and could be delivered because there is likelihood of 18:14 18 minutes, 14 seconds production orders in this. So uh we are there's a high focus on these contracts. 18:21 18 minutes, 21 seconds Got it sir. So uh last question on the export orders sir you mentioned that earlier you have already gotten an export order from a European region. So 18:29 18 minutes, 29 seconds any other region opening up or you're seeing traction for for for your products in the export region. So uh Europe was one. So any other areas that are showing some traction? 18:41 18 minutes, 41 seconds Yes, there are other interested customers. So we have um they're going through Europe specifically for 18:48 18 minutes, 48 seconds addressing the requirement in Europe and outside Europe also in South America and things like that. So there are active uh 18:56 18 minutes, 56 seconds you know we're making active proposals in all these areas wait and watch really what happens and how each country uh 19:03 19 minutes, 3 seconds develops it requirement which shapes out. Yes, there is one. Second is we also have uh this is what we expected on 19:11 19 minutes, 11 seconds T par which I told you. We also have looking at other contracts which is from the UK which we have regular order which 19:19 19 minutes, 19 seconds we're executing. We expect there increase in that volume business also. 19:24 19 minutes, 24 seconds Third we're also looking at uh co-development for worldwide requirements in certain areas of radars and EW. So with some large foreign 19:32 19 minutes, 32 seconds multinationals that also is in the phrase so that not only we develop for India we also want to develop for the world in some areas where we have 19:40 19 minutes, 40 seconds competency. So we have uh signed such agreements also on core development to 19:46 19 minutes, 46 seconds see that uh we invest ahead for not only India require but also grow worldwide. 19:52 19 minutes, 52 seconds So things are happening. We're also looking at export market very seriously now and uh we're going to put a team for export and see how we can build an 20:01 20 minutes, 1 second export market for ourselves. Uh it's all necessary because we're doing parts and pieces at the earlier days or the complete systems are happening and 20:09 20 minutes, 9 seconds whenever systems are completed I would like to see that this is export uh exportable and look at export markets uh 20:17 20 minutes, 17 seconds as you go along. So there is going to be focus on export going ahead. It's going to take a bit of time. The size of business here in India is large. 20:24 20 minutes, 24 seconds Nevertheless, we need to see that we not overly stress only on India and we must have a plan world uh uh product 20:34 20 minutes, 34 seconds uh offerings. So there is going to be just an intent management to see that pursue such requirements. 20:41 20 minutes, 41 seconds Got it sir. Thank you so much for answering my questions and uh all the best for second half. Thank you. Thank you. 20:49 20 minutes, 49 seconds The next question comes from the line of Lavina Cordrris from Jeff. Please go ahead. 20:56 20 minutes, 56 seconds Yeah. So again, congrats on a good set of results. Just an extension of that export question only. See when we've got when I've gone through your presentations, you you're already 21:04 21 minutes, 4 seconds exporting radars. You've always mentioned that this particular quarter you have mentioned that it's the first fully developed radar on the export side 21:12 21 minutes, 12 seconds by data patterns. Any sense you can give on how it changes your export market potential? Does it change it at all? Uh 21:20 21 minutes, 20 seconds you know can you get more inquiries because of this that you all have fully developed it? Just want to understand that bit. Thanks. 21:27 21 minutes, 27 seconds Yes, that's what I answered last question also capital. Uh see um one is 21:34 21 minutes, 34 seconds doing a part of the system for some OEM that is based on OEM's actual requirements and they keep ordering the parts which is already developed for 21:41 21 minutes, 41 seconds them. But uh other one is uh when you build a full system there are requirements outside India. So we can 21:48 21 minutes, 48 seconds address that requirement also. So this is the second way of doing it. Actually mostly uh large systems are only exported outside not parts of it. It it 21:58 21 minutes, 58 seconds gives a larger opening for us to actually build products for rest of the world. So the focus should be there as you go along. But uh we've started with 22:06 22 minutes, 6 seconds subsystems and now we've gone into systems. So we'll focus on both of them. 22:10 22 minutes, 10 seconds As soon as the products are ready here in India, we'll also look at export markets outside of India also. So the important thing is once we test in 22:18 22 minutes, 18 seconds India, this is also then additional markets are looking at. So this is how it is. But this of course a threear order came originally from exports. So 22:26 22 minutes, 26 seconds we modified the existing uh positional proada we did for air force and navy in India completely redesigned for a transportable application. India doesn't 22:35 22 minutes, 35 seconds have this. uh but now that we've got European contracts and some other contracts maybe India will look at it also go along but to answer the question 22:44 22 minutes, 44 seconds yes there will be opening up more orders hopefully if the this products we work work well uh delivered works well then I 22:53 22 minutes, 53 seconds think uh this is a gradual way of getting into exports as you go along and these are complex systems so there 23:00 23 minutes not much competition worldwide for these kind of systems honest thank Thank you. 23:09 23 minutes, 9 seconds A reminder to all the participants that restrict yourself to two questions per participant. 23:18 23 minutes, 18 seconds The next question comes from the line of Joti Gupta from Nirmal Bang. Please go ahead. 23:25 23 minutes, 25 seconds Good morning sir. Congratulations on a good set of numbers. Uh two questions. 23:30 23 minutes, 30 seconds one uh what percentage of 667 which part of your receivables would be realized in H2 could we see anywhere between like 23:39 23 minutes, 39 seconds 80% of that or 67 667 and the other thing is then do I increase my revenue 23:47 23 minutes, 47 seconds guidance from 850 which I taken 2000 this year and margins would be sustained close to 40% or it'll be slightly higher 23:56 23 minutes, 56 seconds because I believe your upcoming uh contracts will have higher margin And this 180 crores is one off and that 24:04 24 minutes, 4 seconds we do not see uh any such low value contracts in the next two quarters. 24:09 24 minutes, 9 seconds Also, how low was the margins from this contract? Was it like sub 20%. Um uh 24:16 24 minutes, 16 seconds because you've had a very good uh you know roll out in terms of your contracts that you've been actually executing in the last 3 four years that I see. 24:28 24 minutes, 28 seconds Okay. The exact percentage of collectibles I really don't have an answer off the top. A large portion of the collectibles will be collected in 24:36 24 minutes, 36 seconds the next H2 what we think whatever is collectible would you agree 24:44 24 minutes, 44 seconds she was asking about how much of current order book will be delivered and no she's talking collect you collectibles or you talking dtors or 24:54 24 minutes, 54 seconds book collectibles sir you not audible sir can you be a bit loud of it yeah most 25:01 25 minutes, 1 second 80% of that number I don't know we want to give but then yeah most of it will be collected during the H2 that is to answer question one 25:10 25 minutes, 10 seconds uh question two we remain with the guidance given earlier I don't want to you know obviously there will be slightly upward moment on the revenue 25:18 25 minutes, 18 seconds guidance because uh there is this contract which is executed but uh on the bottom line guidance we remain whatever 25:26 25 minutes, 26 seconds we've told earlier we don't want to modify present moment and uh regarding exactly what we got in this contract you 25:33 25 minutes, 33 seconds know we And I want you to say exact margin and all that in an open call. So you will understand that this is not 25:39 25 minutes, 39 seconds practical for me to say this. Um what is the other fourth question you asked? I remember only three of them. 25:48 25 minutes, 48 seconds Um sorry. So I have few questions which I'll take offline sir. So maybe since 25:56 25 minutes, 56 seconds they're not comfortable we can actually discuss it offline. Okay. Thank you. Yeah. Thank you. 26:04 26 minutes, 4 seconds The next question comes from the line of Sumant Kumar from Motilal Oswal. Please go ahead. 26:12 26 minutes, 12 seconds So my question is regarding uh the working capital. So we are still in cash 26:18 26 minutes, 18 seconds conversion cycle of 345 days. So the I understand the nature of the business. 26:24 26 minutes, 24 seconds Okay. So in any way uh what is the what is the key uh steps key 26:30 26 minutes, 30 seconds um initiatives we have so we can reduce this uh cash convers cycle to a a lower level and what is our target for say 26:40 26 minutes, 40 seconds next two to three years for this what happens is we doing a lot of development contracts this takes a 26:46 26 minutes, 46 seconds longer time for uh hash conversion once we deliver out of factory context we have integration and things like that 26:55 26 minutes, 55 seconds and testing field testing will take a longer time to really achieve the fast conversion cycle. So uh once we move 27:02 27 minutes, 2 seconds from larger development contracts to production orders is yet to happen. 27:06 27 minutes, 6 seconds Something happens but uh you know it's not the way we ought to happen. We need to have a lot of order book uh where we can do quarter to quarter sales and uh 27:15 27 minutes, 15 seconds then production orders get you maybe few months collectible etc. Unless that happens cycle will not change so 27:24 27 minutes, 24 seconds drastically. Going ahead I think uh the gradually it'll come 345 days it will come to 270 days and then maybe go down 27:32 27 minutes, 32 seconds further depending on the kind of contracts we get nature of contracts but uh in all of these contracts you 27:39 27 minutes, 39 seconds know there is a lot of advance given by the customer. 27:44 27 minutes, 44 seconds So that goes for goes towards funding of the contracts really and uh we still remain a debt-free company. 27:51 27 minutes, 51 seconds Yeah. 27:53 27 minutes, 53 seconds Okay. So that is not included in this cash coming cycle. Pardon? Now that is not included. 28:00 28 minutes Okay. So considering that what is the what is our cash cycle? 28:06 28 minutes, 6 seconds Mr. Sumant, I'm sorry to interrupt but uh we cannot take more than two questions. Uh may I request you to join the queue again? 28:14 28 minutes, 14 seconds This is the second question I think. 28:18 28 minutes, 18 seconds Uh can we answer this? What is your question? No. 28:24 28 minutes, 24 seconds So my question my question is my question. 28:27 28 minutes, 27 seconds Yeah. So the advance you getting from the customer if you consider that what is the cash coming for us? 28:34 28 minutes, 34 seconds Yeah. If you exclude it, it'll be around uh you know 310 to 315 days is the thing at current position. But going forward, 28:42 28 minutes, 42 seconds the new contracts that we are expecting are expected to have more advances. Uh then obviously the cash conversion cycle 28:50 28 minutes, 50 seconds is expected to net off that advances cash conversion cycle will be better than what you see as a number now. 28:58 28 minutes, 58 seconds Okay. Okay. Thank you so much. Yeah. Thank you. 29:04 29 minutes, 4 seconds The next question comes from the line of Hardik Raat from IFL Capital. Please go ahead. 29:12 29 minutes, 12 seconds Thanks for the opportunity and uh congratulations on a good set of numbers sir. Uh my first questions would be with regards to the strategic order. Now I 29:19 29 minutes, 19 seconds understand that you cannot share much more details on the specifics of the project. uh but you know from a margin standpoint would it be safe to assume that had we not you know X of this 29:28 29 minutes, 28 seconds project our uh EITA margins for the current quarter would have been in the guided range of 35 to 40%. Yeah, definitely. 29:37 29 minutes, 37 seconds Got it sir. And uh per the disclosures given in the PPT roughly 200 crores of execution has been done for the DRDO in this quarter. Would be safe to assume 29:45 29 minutes, 45 seconds that a large part if not all roughly 75% would be towards this large order. Uh what would be you know the overall contribution 29:54 29 minutes, 54 seconds or a large part of it. Uh so second question would be with regards to our order book which currently stands at rupees 640 odd crores. uh so could you 30:03 30 minutes, 3 seconds please mention three or five large orders which are priced in this uh and what would be the value of those contracts 30:11 30 minutes, 11 seconds I don't have the list of orders on hand with me to answer this and I don't know whether specific contract buys I want to really share it we normally don't put it 30:20 30 minutes, 20 seconds in website that because of this reason that we accumulate and we don't do this week to week when the order comes we don't push it we don't we don't share 30:28 30 minutes, 28 seconds such information the large contracts I mentioned also there's a some large contract from 30:35 30 minutes, 35 seconds Blamos and one from ECI I've also mentioned that the part of the opening remark itself so then the number of 30:43 30 minutes, 43 seconds other contracts which we have and some more expected we have quoted uh negotiations happen some more contracts 30:50 30 minutes, 50 seconds are also expected in exe okay so that's helpful and one last question was with regards to you know 30:58 30 minutes, 58 seconds the disclosed 550 odd crores worth of orders which have been negotiated but just not confirmed. Uh should we expect that these orders should get confirmed 31:07 31 minutes, 7 seconds in the coming month or two or a part of it has already been confirmed as on date? No, we expect in the next two 31:14 31 minutes, 14 seconds three months this during the rest of the year we should have you know they sometime take time and so the contract once we negotiate it takes a few months 31:22 31 minutes, 22 seconds or sometime two months but there are MOD contracts which is taking some time some for some other reason it's getting postponed so we expect yes in the next 31:30 31 minutes, 30 seconds two three months we should get the contracts got so with that these orders confirming our total order inflows would stand at 31:37 31 minutes, 37 seconds about you know 350 crores plus 550 so roughly 900 odd crores how do look at the order inflow picture for FY26 as a 31:45 31 minutes, 45 seconds whole and absolute terms. Uh should we be are we are we well poised considering not looking for any guidance here but do 31:53 31 minutes, 53 seconds you do you seem confident in crossing that 1500 mark since you know the order inflow order awarding uh trajectory has been pretty good this year. 32:02 32 minutes, 2 seconds Yeah got it. So I have more questions but sorry sir. Yeah you were saying. 32:09 32 minutes, 9 seconds Yeah yeah we have expect more than that contracts next few months. 32:14 32 minutes, 14 seconds That's very got it. Got it. That's very helpful. I have more questions. I'll fall back in the qu. Thank you so much sir. 32:22 32 minutes, 22 seconds Thank you. The next question comes from the line of Gvid Goyel from Nvest Analytical Advisory LLP. Please go ahead. 32:33 32 minutes, 33 seconds Hello. and a model. 32:36 32 minutes, 36 seconds Yeah, good morning sir and congrats for a good set of numbers. Uh the first question is on uh I just want to understand and know 32:44 32 minutes, 44 seconds about the new products uh that are currently into uh development and uh maybe in the next uh 6 to 12 months we are going to uh uh launch these 32:53 32 minutes, 53 seconds products. So can you put some color on uh this area sir? 32:57 32 minutes, 57 seconds Uh we're working on radars on uh number of them actually very various kinds of radars. One is airborne fire control 33:04 33 minutes, 4 seconds radars. Then there are ground radars for uh for uh detection and uh you know what 33:13 33 minutes, 13 seconds is that uh even detection as well as uh type control. Uh we're also looking at 33:20 33 minutes, 20 seconds uh uh EW programs for airborne ordered and unfolded versions and also by uh for 33:27 33 minutes, 27 seconds uh detection drone detection on the ground. We have advanced products in the road and passive as well as uh uh other 33:37 33 minutes, 37 seconds products which will also jam the drones already. We've participated a number of trials products maturing very well and 33:44 33 minutes, 44 seconds out of which already we've got one or two orders from MOD. So this also will get executed in the coming year. So 33:52 33 minutes, 52 seconds there there are a number of products in those areas where we are addressing requirements of our uh of our country. 33:58 33 minutes, 58 seconds We're also doing some communication systems. Uh this is also in advanced stage of development. Of course, there's a lot of glass cockpit and a whole lot 34:07 34 minutes, 7 seconds of other things for avionics is also under development. There whole there's a variety of programs and products that you're doing. And uh this overall if you 34:16 34 minutes, 16 seconds look at the landscape it'll be in products in radar CW avionics um ESM electronic intelligence 34:26 34 minutes, 26 seconds uh and such similar requirement and also drone detection and jamming. These are all the areas which you're working on 34:34 34 minutes, 34 seconds and uh all the products other also seekers building next generation seekers that is 34:42 34 minutes, 42 seconds also uh good to hear and all these products that we are currently uh developing uh this is for both Indian and export 34:50 34 minutes, 50 seconds opportunity right not all of them some are only for India have a specific programs which is we can't export also but some of them are 34:59 34 minutes, 59 seconds generic See we we have we have a standard approach ever since inception been doing as building blocks cuz it you 35:07 35 minutes, 7 seconds know once is uh once the building blocks are ready it is easier to develop few future systems like modifications add 35:14 35 minutes, 14 seconds and subtract we can get a full system up so address the market. Second is you know 01 kind of tender markets it's also 35:21 35 minutes, 21 seconds risky to develop products. So if we can use building blocks then the we deisk ourselves in the development area. So 35:28 35 minutes, 28 seconds this is the second area why we do this and we've continuously done this all through from inception. We continue to do that. So the building blocks itself can be configured for various applications which also are exportable. 35:40 35 minutes, 40 seconds They are located some opportunities like that also. They're working with partners outside India to see how to address their requirements. They're doing both. 35:48 35 minutes, 48 seconds Yes. 35:50 35 minutes, 50 seconds Yes. And sir overall what is the expected time for all those programs? See it's my second question only ma'am. 35:56 35 minutes, 56 seconds Uh so you I think you can allow me uh so yes uh uh just to understand uh what is the expected time for all this uh 36:03 36 minutes, 3 seconds programs the products that is currently under development sir so can you is about 15 to 20,000 crores 36:11 36 minutes, 11 seconds sorry the time is charge so that is how the development happens 36:18 36 minutes, 18 seconds pardon I miss that number 15 to 20,000 crores are beyond Okay, understood. And we will be the first one who are developing. 36:30 36 minutes, 30 seconds Pardon? 36:32 36 minutes, 32 seconds Uh we will be the only one in India who are developing these kind of products. 36:35 36 minutes, 35 seconds Isn't it see is what we believe. We do not know what is happening in my backyard. So really none of us know we have a we 36:43 36 minutes, 43 seconds believe what we doing and we commit ourselves doing what we're doing. Yeah. Okay. 36:50 36 minutes, 50 seconds But this competition is not only India. 36:52 36 minutes, 52 seconds It comes from abroad also. There are mature products abroad which is also you know do a work share and offered in India. India is actually imports more 37:01 37 minutes, 1 second than 70 80% of our requirements. So you should not forget that you can't say it's not made in India only data part is doing it so you'll get all the orders 37:10 37 minutes, 10 seconds that also doesn't happen. People tie up with foreigners and we offer the products in India. Perfect. 37:18 37 minutes, 18 seconds Uh thank you very much. Thank you. Thank you. Thank you. 37:23 37 minutes, 23 seconds The next question comes from the line of Vishal and a shareholder. Please go ahead. 37:29 37 minutes, 29 seconds Uh hello. Uh this was regarding the AMRA program. Now there is also one uh one 37:37 37 minutes, 37 seconds other consortium of uh L&T and B are also bidding for the contract. So what are the probabilities you know in case 37:45 37 minutes, 45 seconds the final contract goes to that consortium the avionics portion may again flow back in some form of other 37:52 37 minutes, 52 seconds two data patterns is that a probability we believe we hope so we don't know because the nature of RFP is still 38:00 38 minutes unpublished so until we know the RFP and what really comes in the it's only RFI now so I can't comment on what is really 38:08 38 minutes, 8 seconds planned on delivery in the first five prototypes what avionics is planned and how they are asking us to the the the 38:16 38 minutes, 16 seconds so-called partners or RFI responses to buy and integrate it is all not visible at the present moment so but the probability is high 38:24 38 minutes, 24 seconds probability is high right I even don't know whether they are planning what they're planning the RFP is not out so we do not know 38:32 38 minutes, 32 seconds okay okay and sir what is a broad timeline would you put for the AMA program you said the timeline is not still sure but uh it would 38:41 38 minutes, 41 seconds you know maybe one year or so or maybe more than that for more clarity on this I believe I believe they want to place 38:49 38 minutes, 49 seconds the contracts early it's in less than a year maybe 6 months is what they're saying so we need to wait and watch how 38:56 38 minutes, 56 seconds the process goes okay okay thank you sir thank you 39:03 39 minutes, 3 seconds that's all thank you the next question comes from the line of Bandit Jen from Sage One Investments. 39:13 39 minutes, 13 seconds Please go ahead. 39:16 39 minutes, 16 seconds Uh I have just one question around the AMC contracts that we see as part of the order book around 31%. Can you explain 39:23 39 minutes, 23 seconds the nature of contracts of these AMC contracts particularly with respect to BRAMOS uh what business uh are they? 39:33 39 minutes, 33 seconds Uh see we've delivered bramos fire control systems, groundworks launchers, uh airborne launchers, 39:41 39 minutes, 41 seconds the test systems for bramos missiles done this from 2006. We've been delivering these systems some of them in 39:48 39 minutes, 48 seconds 201 uh 13 or 18. So I think what we've got here here is ground systems. We have 39:57 39 minutes, 57 seconds a maintenance contract where we have to keep the uptime guarantee and deliver it to see that we already have people 40:04 40 minutes, 4 seconds distributed our service engineers around India take care of immediate response and satisfy the customers quite 40:13 40 minutes, 13 seconds happy and in continuation we've got some contracts the next five years. So okay so this will not require any 40:21 40 minutes, 21 seconds further capex or uh any investments from our side. No, no, no. 40:27 40 minutes, 27 seconds Perfect. Thank you. Thank you. 40:33 40 minutes, 33 seconds Due to time constraint, the last question comes from Yash Odar from Vish Ventures. Please go ahead. 40:43 40 minutes, 43 seconds Uh hi uh am I audible? Yeah. 40:47 40 minutes, 47 seconds Hi. So my question was about the uh I would like to flip the lens on the the strategic contract order and ask uh the 40:54 40 minutes, 54 seconds question regarding we have taken this at a competitive price uh because there is a strategic reason behind it and that 41:02 41 minutes, 2 seconds also brought down the margins. But if we normalize this, if we assume that going forward we are to get repeated orders 41:09 41 minutes, 9 seconds within this category itself irrespective of the quantum, it could be the same, it could be larger, what would be the 41:16 41 minutes, 16 seconds actual normalized margins for this uh type of a strategic contract order. Uh if you had taken it at a regular rate 41:24 41 minutes, 24 seconds and not the competitive pricing, you know, how much further would that take up our margins? 41:30 41 minutes, 30 seconds This has to be negotiated with the customer. I think he would ask that question to him not me. As soon as the requirement comes, the inquiry comes we 41:38 41 minutes, 38 seconds quote and the negotiation happens. So it's a very uh it's a question today is 41:44 41 minutes, 44 seconds not answerable by any of us. It'll be happened only when it really happens. 41:50 41 minutes, 50 seconds So we believe we stand a chance because the contract size will be larger and so maybe we should be able to get a 41:58 41 minutes, 58 seconds reasonable margin but exactly what it is I have no idea at the present moment. 42:05 42 minutes, 5 seconds Okay. Uh and my second question was uh about that in the presentation we are seeing that uh that that you are 42:13 42 minutes, 13 seconds estimating a thousand K inflow for the remaining part of the year. Um in this current quarter the larger component has come out to be a developmental revenue. 42:22 42 minutes, 22 seconds So the remaining thousand uh expected inflow is that going to be more towards uh can you tell us like the break up between the production development and 42:31 42 minutes, 31 seconds AMC side? How how will that be split up the remaining thousand? 42:36 42 minutes, 36 seconds Uh I've not really I'm not actually don't have the papers in front of me to answer this level of retail but uh I don't know is thousand crores 42:44 42 minutes, 44 seconds next few months. I don't know whether what has been given. I don't know that including the 552 cr of contract is already negotiated. 42:53 42 minutes, 53 seconds That's right. uh which we uh to come and uh you know most of it is all product 43:01 43 minutes, 1 second related uh some something may be development and something may be production contracts but uh not uh on 43:08 43 minutes, 8 seconds AMC and things not service basically there is there is going to be a production contract if it happens a 43:14 43 minutes, 14 seconds sizable contract should happen but um for the next two to three months we should know we're expecting more orders 43:23 43 minutes, 23 seconds to happen. I can only say that and whatever guidance you're given, we will accomplish and exceed the guidance contracts. 43:31 43 minutes, 31 seconds Okay. So if I if I understood this right, I'm just uh uh just double checking my understanding that uh the thousand that is expected to come will 43:38 43 minutes, 38 seconds be primarily production and development and not services. 43:44 43 minutes, 44 seconds What is saying yes right okay thank you so much. 43:51 43 minutes, 51 seconds Thank you. 43:53 43 minutes, 53 seconds due to time constraint. That was the last question for today's conference. I now hand the conference over to management for closing comments. 44:03 44 minutes, 3 seconds Um thank you all for uh tuning in and asking the questions and being on the earnings call. Um we believe we're on 44:11 44 minutes, 11 seconds the right track as a company investing ahead to build products to address the large markets. 44:18 44 minutes, 18 seconds We've uh in India we've always relied on imported products all through and very few companies actually build products 44:25 44 minutes, 25 seconds except in government agencies like DPSUs and DRDO most TDR driven programs for DPSU. This is where the products really 44:33 44 minutes, 33 seconds come in and other companies companies collaborate with foreigners to build the products in India. We've taken a different approach to build indigenously 44:40 44 minutes, 40 seconds our products with uh uh it's a uh you know IPdriven capability driven products. We'll continue to focus on 44:48 44 minutes, 48 seconds such programs and products where there is a bottom line business also as we go along and uh we have taken QAP funds to 44:55 44 minutes, 55 seconds invest on the such programs and products. I think we are on the right track. We're very bullish on future as you go along. Uh we're also working very 45:04 45 minutes, 4 seconds closely with the on very strategic programs and products which are to deliver uh to customer urgent basis. So 45:12 45 minutes, 12 seconds the requirement for mission mode projects in Rio also has increased considering the geopolitical situation in India and based on this the 45:20 45 minutes, 20 seconds requirement to convert into the contracts you know into products early see it reaches the customer early is 45:26 45 minutes, 26 seconds also felt need in the audio and other parts of our users. So we are addressing such urgent requirements ahead of time 45:36 45 minutes, 36 seconds so that we are always ahead of time in delivery. And uh second area is we're building uh very very competitive very 45:44 45 minutes, 44 seconds capable products worldclass systems any product designed here is world class technology and we're building an 45:53 45 minutes, 53 seconds organization to either to continue to go on this building products for India and outside India like I said uh in one of 46:01 46 minutes, 1 second the calls we're also trying to work in partnership with outside uh large multinationals to see whether we can do core development 46:09 46 minutes, 9 seconds uh there are options possibilities because suddenly there's a situation there also in Europe and other areas where investments are being made in uh 46:18 46 minutes, 18 seconds in defense which is either too not even thought about there because of the existing environment worldwide. So 46:26 46 minutes, 26 seconds there's a need for addressing market requirements urgently. We're trying to see what is it we can with our competency address those requirements. 46:33 46 minutes, 33 seconds So we're getting into serious uh uh discussions uh ground you know face to face meetings they're coming here we 46:40 46 minutes, 40 seconds going there to discuss to see whether we can address the worldwide requirements at a at a speed in which uh they 46:47 46 minutes, 47 seconds themselves cannot do probably at oneird the time of their addressing requirements we can do this faster it it it finds it finds favor with our 46:56 46 minutes, 56 seconds customers abroad and also that we're willing to co-invest in such product development is also finding favor so I think that the second area where we will 47:03 47 minutes, 3 seconds focus on and get into exports serious way. The advantage of exports is that we work with private sector there and also 47:11 47 minutes, 11 seconds the requirements are very large unlike here where we talk about one one product take two years three years go through qualifications 5 years to wait for an 47:20 47 minutes, 20 seconds actual contact to happen able to do this in one to one and a half years two years time they're able to get into production mode very much faster requirements are 47:27 47 minutes, 27 seconds large and immediate and current so we can address this so we believe that uh scaling up is faster in such requirements so the size of business 47:35 47 minutes, 35 seconds accessible is not as big as we can do in India but uh this can be uh a longerterm and also via media solution see that we 47:44 47 minutes, 44 seconds grow the business so this is second area we're focusing on enable this also to see that we can continue to do on this journey you also have to see that the 47:52 47 minutes, 52 seconds required manpower is built and competencies are built that is why we're continuously recruiting people you'll see that our uh in our uh P&L also the 48:01 48 minutes, 1 second staff salary and all that you see there's substantial increase in salaries and things like This is basically because we're taking more inputs also 48:08 48 minutes, 8 seconds have to uh people training them that is also happening. We're also working on capex uh to see that whatever products 48:17 48 minutes, 17 seconds we develop we are actually future ready and the products developed once developed and the production order comes we are ahead of time in delivering the 48:25 48 minutes, 25 seconds production orders. So we're not wanting we're not doing it stage by stage we're doing it in parallel see that we can uh 48:32 48 minutes, 32 seconds deliver quickly. Our ambition is to see that we grow fast and uh deliver quickly to see that we and scale the company 48:41 48 minutes, 41 seconds much faster. So all this is what we say thinking and ways in which the management is working to see that the 48:48 48 minutes, 48 seconds the the the various pieces are in place the foundation is in place the strategy in place to see that we can address this. So I think we are going the right 48:57 48 minutes, 57 seconds track at the present moment. A big contract should happen maybe in another year, couple of years, two years, three years, it'll happen. This can really propel the growth of the company far 49:05 49 minutes, 5 seconds higher heights than what we've been able to do in the last two years. Though we've been growing at 20 30% year on year, I think uh with the large markets, 49:13 49 minutes, 13 seconds we should grow much faster as we go along. We're taking some directives and uh investments to see that we drive the 49:20 49 minutes, 20 seconds business to a faster growth stage as we go along two three years down the line. So that's all I want to leave you with. 49:29 49 minutes, 29 seconds We are very serious about what we're doing and committed to trying to build a model company with IPdriven organization. We are in that process of 49:38 49 minutes, 38 seconds what we're doing that. Uh we hope that the future is uh addresses with the confidence that we have maybe it'll work 49:46 49 minutes, 46 seconds out the way we want. Thank you again for joining us in this in this earnings call. Any further questions please 49:53 49 minutes, 53 seconds address it to J&M go India advis us and we would be happy to see that we give you the right answers whatever we can in 50:01 50 minutes, 1 second an open forum what we can we'll definitely see that we give you the right answers thank you once again u 50:09 50 minutes, 9 seconds all thank you this brings the conference call to an end on behalf of go India advisors we 50:17 50 minutes, 17 seconds thank you all for joining us thank you and you may now disconnect Your lines.