Astra Microwave Q3FY18 Concall Summary

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 Financial Highlights

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  • Earned revenues of about Rs.86 Crores in Q3 and for the nine months period it is about Rs.191 Crores
  • The gross margin for the quarter is around 65% and for the nine months period it is around 72%
  • Profit before tax is about Rs.25 Crores for the three months period and for the nine months it is about Rs.42 Crores
  • Profit after tax for the three months is about Rs.16 Crores and for the nine months period, it is about Rs.30 Crores
  • The PBT to sales is about 30% for the three months period whereas for the nine months it is about 21%
  • The 20% PBT margin will be maintained is it for Q4 as well
  • The PAT to sales is about 20% for the quarter and for the year it is about 15%
  • In terms of order book during the quarter they were able to book about Rs.46 Crores worth of orders
  • Cumulatively they have booked about Rs.214 Crores of orders and order book at the end of the year is about Rs.533 Crores
  • The long-term borrowing is about Rs.80 Crores at the end of nine months period
  • The short-term borrowings is about Rs.28 Crores
  • The gross sales for the three months is about Rs.97 Crores and Rs.239 Crores for the nine months period
  • The net sales for the three months is about Rs.82 Crores and Rs.199 Crores for the nine months period
  • For the current year so far they have booked about Rs.210 Crores and in Q4 that is the next two and a half months we will be booking around Rs.120 Crores
  • The overall exports for the nine months is are about 7 or 8 Crores
  • As of today they have a capacity to turnout about 1000 Crores of sales

Net Working Capital

  • Inventory is about Rs.165 Crores
  • Receivables and other current assets is about Rs.160 Crores
  • Total current asset block of about Rs.422 Crores
  • The current liabilities including the short-term maturity of the long-term liabilities is about Rs.152 Crores

Order Pipeline

  • Contract received from DARE is going down to next year due to technical challenges
  • The Akash Missile  subsystem which has gone for the design iteration had some technical issues in initial lot of production and these got resolved in November, December
  • The new design of radio proximity fuse had some technical issues which resulted in sales drop of Rs.20 Crores
  • Another project which is from the space, in which there was a delay from the customers to issue the free issue of material from Space Application Center
  • Rs.135 Crores 7 Squadron Akash is expected in the first quarter of the next year
  • Rs.190 Crore order from ELTA, which is a repeat order from India is also shifted to next year due to delay in getting the contract from India
  • RISAT-2 will materialize before March, whereas RISAT-1A, there was some delay in the contract finalization, so most probably by Q1 or Q2 we will be able to book that contract, worth of Rs.70 Crores
  • Taken up proactive development on X-Band and KU Band Seekers, which are under testing phase
  • Rs.650 Crores will be the orders booking for the next year
  • Breakdown of order book as of December
    • Defense and PSU is about Rs.286 Crores
    • Space is about Rs.65 Crores
    • The others within defense and space is about Rs.6 Crores
    • Exports is about Rs.16 Crores
    • Meteorology is about Rs.1 Crores
  • For the Q4 order book, expecting
    • Rs.80 Crores from space
    • Rs.40 Crores from defense
    • Rs.4 Crores from the exports
    • For next year’s order book
    • For defense Rs.286 Crores, is split into Rs.86.39 Crores from Radar and Rs.124.9 Crores Missiles and Rs.77.79 Crores from EW
    • Meteorology and all other put together about close to Rs.40 Crores
  • Currently developing one particular product jointly for missile application which is high power amplify
  • Possible bookings for the next three months, product wise
    • Two X-band order from ISRO
    • From Space Application Center also likely to book about 30 Crores for various subsystems
    • In the radar domain it is about 1 Crores
    • Missiles about around 10 Crores
  • Electronic warfare, which they are negotiating in Hyderabad, one of the Samudrika production program, likely to be booked around Rs.25 Crores
  • Execution of Rs.450 Crores in the next year out of which around Rs.100 Crores are for exports
  • Rest all is domestic, out of which
    • Around Rs.80 Crores from radar
    • Around Rs.80 Crores from the missile electronics and telemetry put together
    • Electronics EW is around Rs.60 Crores
    • Space is about Rs.125 Crores

Sales Breakdown

  • Radar will be contributing around 131 Crores
  • Missile and telemetry put together around 130 Crores
  • Electronic warfare segment about 32.6 Crores
  • Space would be around 28 Crores
  • Exports around 40 Crores

Factors affecting margins

  • The margins have improved largely because of the product mix in the current quarter
  • There is a significant amount of two or three products groups, where the gross margins are fairly better compared to the normal margins of the company

Future opportunities

  •  Likely to get repeat orders like Seven Squadron Akash and then also Army
  • Likely to get orders for two regiment
  • Likely to get orders like the BHH developed for new generation anti-radiation missiles and also for the PSM and fire control radar
  • BEL is likely to book the order from Air Force for the Medium Power Radar
  • For Army the Barney Mark II
  • Discussing few programs with LBIT and Rafael which likely to book close to about Rs.100 Crores in next two to three years
  • Other major order is AVACS program phase II, close to Rs.200 Crores worth of business in next two to three years including Seekers from FY2020
  • Project Uttam LRDE has completed the development part of it
  • Only the aircraft integration part is left and working that out with ADA
  • Estimating around 450 Crores for next year topline