💰 Financial Performance

Revenue Growth by Segment

Revenue grew 16% YoY in FY2025 and has maintained a 13% CAGR since FY2021. Defense contracts represent approximately 70% of the INR 1,953 Cr order book as of March 31, 2025. H1 FY2026 revenue reached INR 414 Cr, a 7.7% increase from INR 385 Cr in H1 FY2025.

Geographic Revenue Split

Domestic revenue contribution significantly increased to 90% in FY2025 from 68% in FY2024 and 60% in FY2023. Export revenue now accounts for approximately 10% of total sales.

Profitability Margins

Operating profit margin expanded by 357 bps to 25.1% in FY2025. Gross margins for H1 FY2026 stood at 48.8% compared to 42.0% in H1 FY2025. PAT for H1 FY2026 was INR 40 Cr, up 23.3% YoY from INR 33 Cr.

EBITDA Margin

EBITDA margin for H1 FY2026 was 21.4%, an improvement from 19.0% in H1 FY2025. Q2 FY2026 EBITDA margin was 22.3% vs 21.4% YoY, reflecting a 21.2% YoY growth in absolute EBITDA for the half-year period.

Capital Expenditure

The company added INR 93 Cr to its gross block in FY2025, primarily for a new building at Unit 3 and advanced test equipment. Planned annual capex is estimated at INR 50-75 Cr to support production line expansion.

Credit Rating & Borrowing

CRISIL upgraded the long-term rating outlook to 'Positive' from 'Stable' while reaffirming 'CRISIL A'. Short-term rating is 'CRISIL A1'. Interest coverage ratio is a monitorable factor with a downward trigger if it falls below 3.5 times.

⚙️ Operational Drivers

Raw Materials

RF and microwave super components, sub-systems, and advanced test equipment software represent the primary material and tool costs, with raw material consumption totaling INR 212 Cr in H1 FY2026 (approx. 51% of revenue).

Capacity Expansion

Current capacity is being expanded through the capitalization of a new building block at Unit 3 and the construction of an additional building to support a 4x growth vision toward a $1 billion revenue target.

Raw Material Costs

Raw material costs were INR 212 Cr in H1 FY2026 compared to INR 223 Cr in H1 FY2025, representing a decrease in absolute cost despite higher revenue due to a favorable shift toward high-margin proprietary domestic products.

Manufacturing Efficiency

RoCE remained healthy at 18.6% in FY2025. The company is focusing on production line automation and advanced software tools to enhance operational efficiency.

📈 Strategic Growth

Expected Growth Rate

11-15%

Growth Strategy

The company plans to double its size to a 'quarter billion dollars' (approx. INR 2,100 Cr) in 3-4 years by transitioning from a component manufacturer to a systems-level entity. This involves focusing on Astra-branded proprietary products, expanding production lines with new facilities, and leveraging the Astra Rafael Comsys JV which has an order book of INR 456 Cr.

Products & Services

RF and microwave super components, sub-systems, systems for Defense and Space, SDR back pack radios, and Annual Maintenance Contracts (AMC).

Brand Portfolio

Astra Microwave, Astra Rafael Comsys (JV), Bhavyabhanu Electronics.

New Products/Services

SDR back pack radios (under development in JV) and Astra-branded systems-level solutions are expected to drive the next phase of growth.

Market Expansion

Targeting a jump from $250 million to $1 billion in revenue over the long term through a multi-platform strategy and increased domestic defense market share.

Strategic Alliances

Astra Rafael Comsys (ARC) is a 50% JV with Rafael; it contributed INR 12 Cr in profit share in FY2025 and is targeting INR 250-350 Cr in annual revenue.

🌍 External Factors

Industry Trends

The defense electronics industry is shifting from component supply to integrated systems. Astra is positioning itself as a systems-level player to capture higher value, with the industry growing at 12-15% annually.

Competitive Landscape

Management acknowledges competitors with higher margins, prompting a strategic shift toward systems and AMC contracts to defend and grow market share.

Competitive Moat

Durable moat through proprietary R&D and deep integration with DRDO projects. High entry barriers exist due to the technical complexity of RF and microwave systems and long qualification cycles in defense.

Macro Economic Sensitivity

Highly sensitive to Indian Defense Budget allocations and 'Make in India' policy shifts which drive the 90% domestic revenue base.

Consumer Behavior

Not applicable (B2B/B2G model).

Geopolitical Risks

Export orders are primarily contract manufacturing; geopolitical shifts affecting international defense supply chains could impact the 10% export segment.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to stringent defense manufacturing standards and security clearances required for DRDO and ISRO contracts.

Taxation Policy Impact

Effective tax rate was approximately 24.5% in H1 FY2026 (INR 13 Cr tax on INR 53 Cr PBT).

Legal Contingencies

The company maintains compliance with SEBI Listing Regulations; no specific high-value pending court cases or litigation values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Execution risk on large-scale system orders and potential delays in government procurement cycles could impact projected revenue by 10-15%.

Geographic Concentration Risk

90% of revenue is concentrated in the Indian domestic market, creating high dependency on local defense spending.

Third Party Dependencies

Significant dependency on JV partner Rafael for the ARC segment's growth and on DRDO for R&D project transitions to mass production.

Technology Obsolescence Risk

High risk in the electronics sector; mitigated by continuous investment in advanced test equipment and software tools (INR 93 Cr added to assets in FY2025).

Credit & Counterparty Risk

Receivables are primarily from government defense entities, generally representing high credit quality but potentially long payment cycles.