Astra Microwave Q2FY18 Concall Summary

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 Financial Highlights

Astra Microwave Products Q2FY18 Financial Performance.emf.png
  • Revenues for the quarter was about Rs.54.55 Crores and for the half year ended about Rs.105 Crores
  • Profit before tax for the three months is about Rs.13 Crores and for the six months it is about Rs.16 Crores
  • Profit after tax is about Rs.10 Crores for the three months and for the six months is about Rs.14 Crores as compared with about Rs.12 Crores for the corresponding period of last year
  • Operating profits are being close to about 30%
  • PBT is about 24% for the quarter and about 15% for the six months period
  • Cash and cash equivalents at the end of half year is about Rs.13 Crores
  • In terms of various current assets, the inventory is about Rs.170 Crores and the receivables is about Rs.128 Crores
  • The long-term borrowing at the end of six months is around Rs.82 Crores, inclusive of about Rs.50 Crores of nonconvertible debentures, which are coming for repayment from the first quarter of next year
  • On the short-term borrowing mostly for the working capital is about Rs.35 Crores
  • Due to corrections as per IND-AS , the reported sales instead of being around close to Rs. 68 Crores it has come to Rs.54 Crores
  • Order book is about Rs.576 Crores and the accumulative orders booked for the first six months is about Rs.170 Crores
  • Likely to book close to about another Rs.300 plus Crore order in the balance six months’ period
  • The exports are close to about Rs.2.2 Crores or so for the present quarter
  • Total Receivable is about Rs.128 Crores
  • The regular capex is about Rs.8 Crores year-on-year

Targets

  • For full year maintaining the same guidance number of Rs.450 Crores
  • Trying to maintain Rs.600 Crores order inflow guidance for the current year
  • Maintaining pre-tax profit of about 12% to 15% and post-tax profit of about 10% to 12%

Issues

  • Due to corrections as per IND-AS , the reported sales instead of being around close to Rs. 68 Crores it has come to Rs.54 Crores
  • Late delivery charges as per the Indian GAAP used to show under expenditure now that has been corrected in the sales itself, which is about Rs.9.8 Crores
  • The sales recorded by the company in the last two days of the financial period ending September, which is close to about Rs.10 Crores, which is again taken out from the sales
  • Few development contracts delayed due to unforeseen technical related issues
  • In one particular order, there was delay in receipt of the free issue of material from the customer because of that could not execute in the last quarter
  • The revenue, which was basically deferred from Q1 to Q2 has got deferred because of DRDO related order
  • Delay in the joint venture Rafael from the SDF business that was expected to close in this year
  • Customer going for change in the design to meet the cost, so for that it is getting delayed by another one year
  • Late delivery charges booked so far in the first half of this financial year is close to Rs.9.8 Crores
  • One major order to BDL where the LD charges have been factored in by taking into account a date of release of FPO which is very back dated

Order Pipeline

  • 7 Squadron Akash, supposed to get in the last year itself, but the customer is expecting to receive the order from the Air Force in the month of December, so probably will close the orders by March
  • Total for the 7 Squadron, which  BEL is expecting, their share will be around Rs.120-125 Crores
  • Rs.170 Crores export order from one of the OEM, repeat order, executed two years back
  • RISAT project where they have worked in the past in the C-band almost contributed close to Rs.70-80 Crores
  • The entire Akash orders are through BDL
  • The total order backlog is Rs.585 Crores
    • Defense is about Rs.322 Crores
    • Space is about Rs.87 Crores
    • Exports is about Rs.154 Crores, and
    • The rest all like meteorology and all put together about Rs.23 Crores

Subsidiaries

  • Started executing orders from Singapore subsidiary
  • Received few orders from the development mode
  • Started designing a couple of MMICs from the Singapore office
  • This year expecting about $200,000-$300,000 worth of order execution from the Singapore subsidiary

Market Updates

  • On the current asset base, they can do around Rs.1000 Crores in terms of topline, which also depends on the order mix and the order flow
  • Bidding versus Winning of tenders is close to around 50%-55%
  • Expecting close to Rs.70 Crores to Rs.80 Crores’ worth of orders from the Rafael JV air force contract
  • For the army order, it will be the Indian entity, which is Astra Rafael JV or not Rafael from Israel
  • It is the huge order, the quantities what they are talking about is more than 20,000 terminals
  • BDL are fighting with the government to get back the LD. If they get back the LD, we will get back our LD also
  • Overall the cost of the R&D Centre in Bangalore is close to about Rs.60 Crores

Debt Repayment

  • In the last week of April have to repay about Rs.25 Crores
  • In the last week of September have to pay another Rs.25 Crores

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