- 06 Nov 2023
- ICICI Securities
STRONG PERFORMANCE LED BY HEALTHY EXECUTION
News: Revenue increased by 22.9% YoY (+20.8% QoQ) to Rs 108.3 crore in Q2FY24. EBITDA margin improved by 342 bps YoY (+660 bps QoQ) to 37.6%, led by lower raw material cost and positive operating leverage. Gross margin stood at 69% (+413 bps YoY). Subsequently, EBITDA increased 35.1% YoY (+46.5% QoQ) to Rs 40.8 crore. PAT was up by 60.5% YoY (+30.8% QoQ) to Rs 33.8 crore as other income also increased significantly to Rs 10.8 crore (Rs 1.9 crore in Q2FY23).
Views: Overall performance remains healthy in Q2FY24 led by strong execution. Order inflow was at Rs 144.5 crore in Q2FY24 (Rs 277 crore in H1FY24). Order backlog stands at Rs 1082 crore (~2.2x of TTM revenues) gives healthy revenue growth visibility. Share of production orders has been increased and contribute ~60% to total order-backlog (as compared to ~30% by FY23 end) shows conversion of development contracts into production contracts. Going ahead, we believe that company’s revenue growth is expected to remain strong led by execution of strong backlog. Moreover, pipeline remains healthy in defence electronics products like radars, electronic warfare, communication systems etc. Company would also benefit significantly from upcoming opportunities in space radars and small satellites.
Impact: Positive