Astra Microwave Q4FY17 Concall Summary

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Financial Highlights

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  • Net sales for the Q4 is 156 crores compared to Q4 of last year 124 crores
  • Net sales for the year is 424 crores as compared to 419 against last year
  • Gross margin for Q4 is about 57% with vs 51% corresponding to last year Q4
  • Gross margin for the year is 53% as compared 48% last year
  • Profit Before tax for the quarter is 22% as compared to 18% last year
  • Profit Before tax for the Year is 16% as compared to 17% last year

Order Book

  •  Order book for the year is about 524 crores which includes exports of about 150 crores & overall orders booked during the year is 390 crores.
  •  The company had given guidance of 500 crores of order book for the last year.
  • It has booked 410 in last year & the delay in the projects like 7 Squadron Akash which the company was hopefully of getting the order in the 1st quarter last year because of the PNC has got delayed on the OEM & all also there were a few projects in space programme which it was expecting to complete before March 2017, those orders also got delayed.
  • The company wanted to give target of Rs 600 crore order book for this year. For next year thecompany wants to give guidance of order book of 450 crores due to delays in projects out of exports of Rs 150 crores only 40 crores will be executed in FY 2017 & rest in FY2018, therefore the margins will be better.
  • The company has got orders for QR-SAM & other programs for development last year, which is into execution phase. Basically QR-SAM are in both radar subsystems as well as missiles also. The company has presence in both these. Once it gets the firm number on the production quantity it can tell what will likely to happen in the next year
  • The company has order inflow of Rs 410 crore & carry forward of about Rs 520 crores for FY 2018 & again for FY 2018 it is likely to book orders worth of about Rs 600 crores.
  • Of the 600 crores order about Rs 160 crores are from exports, about Rs 275 crores from defence and Rs 110 crores from space sector. 
  • The margin from space & defence sector is in excess of about 50%.
  • The company is targeting about Rs 345 crores from defence, Rs 35 crores from space & exports close to Rs 45 crores & meteorology & hydrology all put together around Rs.20 Crores

Business Updates

  •  The company’s efforts to do JV with Raffel JV marketing is on & has participated in RFI & the discussion is going on.
  • The company expects late delivery charges of 10 crores in the coming year
  • Employee cost & other overheads are going up & the topline is more or less going to be flat as compared with current year. Therefore the company does not see any significant increase in profitability. There will be increase but not huge.
  • The company is building R&D center in Bangalore. There it has spent around 37 crores & spent around 35 crores out of 40 crores on the existing operations. So both put together is close to 70 crores.
  • It will come down to 25 crores next year because the money is required to complete the R&D facility in Bangalore.
  • The company does not see any huge requirement of capex for JV’s except running operations.
  • There are a lot of new companies which have come into the sector like Alpha
  • The company has made provision for tax more or less at MAT level. Going forward it will be continued for FY18 & will be around 23-24% of PBT. For FY19, it will be in the range of 23-25%.

Brahmos Order

  • On Brahmos it is a regular telemetry products which company is supplying but in other side the seekers which it has taken up for development is in final integration stage & may take another 3 to 4 months for it to demonstrate
  • The company has various versions of applications which it is developing for Brahmos which is along with DRDO

Rafale Jets JV

  • The Rafale JV will be operational from FY2020.
  • The company is planning to do may be about Rs 20 crores to 25 crores to start with and then followed by another total about Rs.100 Crores worth of offsets. So over the next 3 years Rs 100 crores per year.
  • The company has about 50% share in JV.

Akash Program

  • The company is producing radars & missiles under Akash Program. It is supplying radars to BEL & missile subsystem to BDL.
  • The company expects to touch Rs 750 crores in FY2020.
  • The company has an offset project from LR SAM order which Bharat Electronics won. The company does not expect much margin from such order.
  • Muzzle velocity radar was successful & company has delivered those radars to the DRDO & have developed in S-band as well as X-band & as far as precision approach radar, the development phase is now completed & company is pursuing with HAL to deploy this radar in one of the existing air force. The company is expecting orders worth Rs 70 crores to Rs 80 crores
  • The company is producing Radio proximity Fuze for all missiles, one is for QR SAM & the other one is for Akash upgraded version
  •  The company has not lost any orders but it is sharing some subsystem programs with BEL.
  • The company is supplying 60% & BEL is supplying 40%. Again the company is supplying majority of MMIC components