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- 13 Nov 2024
- ICICI Securities
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EXECUTION REMAINS HEALTHY IN DOMESTIC DEFENCE CONTRACTS
News: Revenue increased by 20.8% YoY (+48% QoQ) to Rs 229.6 crore, led by strong growth of 72% YoY in domestic defence segment (contributing 80% to revenue). Exports revenue (11% of total) declined 64% YoY. EBITDA margin stood at 21.4% (-46 bps YoY, +598 bps QoQ). Subsequently, EBITDA increased by 18.2% YoY (+105.1% QoQ) to Rs 49.2 crore. PAT was down 15.4% YoY on account of higher interest cost and lower other income. For H1FY25, revenue is up ~19% YoY with EBITDA margin stands at 19% (vs 13.8% in H1FY24
Views: Execution remains healthy in domestic defence contracts during the quarter. With order inflows of Rs 232 crore during the quarter (Rs 530 crore in H1FY25), order backlog remains healthy at Rs 2097 crores (2.2x TTM revenues). Operational performance is expected to improve further in the coming period, on healthy execution and changing contract mix (~90% of order backlog is domestic where margins are relatively better as compared to export contracts). Order pipeline remains robust in defence electronics segments (like radars, EW) and space electronics. Management had guided Rs 1200-1300 crore worth of order inflows in FY25E and sees orders opportunity worth Rs 24000-25000 crore for the company over FY25-28E
Impact: Positive