Release Date: February 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Astra Microwave Products Ltd (BOM:532493, Financial) reported a 12% year-on-year growth in revenue, reaching 257 crores on a standalone basis.
- The company maintained a stable EBITDA margin of 29.1%, indicating strong profitability.
- A significant portion of revenue, 85%, was derived from domestic defense orders, showcasing a strong domestic market presence.
- The consolidated order book stood at 2,332.6 crores, with new orders worth 141 crores received during the quarter.
- The company successfully participated in technical trials for anti-drone radar for the Indian Army, indicating potential future revenue streams.
Negative Points
- Interest costs increased sharply on both a quarter-over-quarter and year-over-year basis, partly due to accounting adjustments.
- Working capital borrowings have risen, contributing to higher finance costs.
- There are challenges in achieving the full-year revenue target of 1,000 crores, although the company remains confident.
- The geopolitical situation, such as the Israel-Gaza conflict, has caused some supply chain issues.
- There is a delay in procurement for certain projects, such as the LCM Mark 1A, affecting revenue timelines.
Q & A Highlights
Q: The EBITDA margin is almost 30% this quarter. Can we expect margins upwards of 25% going forward?
A: Yes, we can expect to maintain margins upwards of 25% due to the current order book's orientation towards defense and service orders. (Respondent: Unidentified_2)
Q: Interest costs have increased sharply. Is this due to a working capital build-up, and will it be unlocked in Q4?
A: The increase in interest cost is largely due to adjustments related to Indian accounting standards and advances received from customers, not an actual outflow. Working capital borrowings have slightly increased, contributing to the rise in interest costs. (Respondent: Unidentified_2)
Q: What is the potential of the anti-drone radar, and how does it differ from competitors?
A: The anti-drone radar, developed from a DRDO project, is being optimized and integrated with radar jammers and other sensors to provide comprehensive solutions. We are competing with a couple of companies in this domain. (Respondent: Unidentified_3)
Q: With 9-month revenue at 640 crores, are there challenges in achieving the full-year target of 1,000 crores?
A: While challenges exist, we are confident in reaching the milestone by the end of the year. (Respondent: Unidentified_2)
Q: What is the current debt-to-equity level, and what is the comfortable range?
A: The current debt, both long-term and short-term, is about 430 crores. (Respondent: Unidentified_2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
