💰 Financial Performance

Revenue Growth by Segment

The defense portfolio, including industrial and digital transformation practices for defense, contributes approximately 75% of total revenue. IP-based revenue is projected to be 30% for FY25-26, with a long-term target to increase this to 50%. Total revenue grew from INR 41.06 Cr in FY24 to INR 115.11 Cr in FY25, representing a 180.4% YoY increase.

Geographic Revenue Split

Historically, a significant portion of revenue was derived from global clients, including a two-year delivery of systems to the Malaysian Navy. The company is now aggressively penetrating the domestic market, recently securing an order from an Indian Public Sector Undertaking (PSU) for defense sub-systems.

Profitability Margins

Gross Profit margins have seen a decline from 93.8% in FY23 to 76.5% in FY24, and further to 55.8% in FY25 (INR 64.22 Cr) due to changes in product mix and increased cost of goods sold. Net Profit (PAT) margin stood at 25.1% in FY25 (INR 28.84 Cr) compared to 29.9% in FY24.

EBITDA Margin

EBITDA margin was 36.0% in FY25 (INR 41.42 Cr), down from 44.6% in FY24 (INR 18.33 Cr). This 860 basis point compression is attributed to higher employee costs, which rose 30.8% YoY to INR 12.18 Cr, and other operational expenses.

Capital Expenditure

Capital Work-in-Progress (WIP) stood at INR 25.57 Cr in FY25. The company is utilizing IPO proceeds for capital expenditure, including INR 1.47 Cr for upgrading the Experience Centre and setting up a Training Centre, though vendor selection has deviated from the original prospectus to secure better deals.

Credit Rating & Borrowing

Short-term borrowings increased significantly from zero in FY24 to INR 37.61 Cr in FY25. Finance costs rose from INR 0.79 Cr to INR 0.92 Cr YoY. Specific credit ratings and interest rate percentages were not disclosed in the available documents.

⚙️ Operational Drivers

Raw Materials

Key inputs include electronic hardware components for sub-systems, proprietary software modules, and purchased goods for trade which accounted for INR 103.17 Cr in FY25 (approx. 89.6% of revenue).

Import Sources

Not specifically disclosed, though the company mentions global operations and the ability to create products locally based on global technological trends.

Key Suppliers

Not specifically named, however, the Monitoring Agency report noted a shift in vendors for capital assets from those originally proposed in the prospectus to alternative vendors offering better specifications/deals.

Capacity Expansion

The company is expanding through the setup of a new Training Centre and the upgradation of its existing Experience Centre. It maintains core competencies in system integration, architecture, and software development for mission-critical applications.

Raw Material Costs

Cost of Goods Sold (COGS) was INR 50.89 Cr in FY25, representing 44.2% of revenue, a sharp increase from 23.5% in FY24. This increase is driven by a higher volume of purchased goods for trade (INR 103.17 Cr) offset by inventory changes.

Manufacturing Efficiency

The company is transitioning toward a model focused on free cash flow, targeting consistent month-on-month positive free cash flow by 2027. Efficiency is driven by the 'MAGI-C4ISR' architecture.

Logistics & Distribution

Not specifically disclosed as a percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

180.40%

Growth Strategy

Growth is driven by a shift toward high-margin IP-based revenue (targeting 50% share) and penetrating the domestic Indian defense market. The company is leveraging its MAGI-C4ISR architecture to secure PSU orders and is positioning itself for recurring follow-on opportunities in mission-critical defense integration programs.

Products & Services

Command and control platforms, situational awareness systems (digital brains for warships and drones), mission-critical defense sub-systems, MAGI-C4ISR architecture, and Industry 4.0 digital transformation products.

Brand Portfolio

C2C Advanced Systems, MAGI-C4ISR (Architecture).

New Products/Services

Recent launch and supply of sub-systems for PSU defense projects; expected to provide an entry point for recurring domestic revenue.

Market Expansion

Targeting the domestic Indian defense ecosystem to balance its historical reliance on global clients like the Malaysian Navy.

Market Share & Ranking

Not specifically disclosed, but positions itself as a key player in the digital 'brains' of defense assets.

Strategic Alliances

Collaborates with Public Sector Undertakings (PSUs) for defense system integration; specific private partner names were not disclosed.

🌍 External Factors

Industry Trends

The Indian Ministry of Defense targets a US$ 36.1 bn turnover in aerospace and defense by 2028-29. The industry is shifting toward software-defined warfare and situational awareness, where C2C's C4ISR platforms are positioned for growth.

Competitive Landscape

Competes with both domestic PSUs (as a sub-system supplier) and global defense technology integrators.

Competitive Moat

Moat is built on 25+ years of founder experience in the defense domain and proprietary software-driven architectures that are 'agnostic' to hardware, making them difficult to displace once integrated into mission-critical naval or drone systems.

Macro Economic Sensitivity

Highly sensitive to Indian Defense Budget allocations. The FY26 budget envisages an outlay of INR 6.81 lakh crore (13.45% of total budget), with a 4.65% increase in capital outlay which directly impacts C2C's order pipeline.

Consumer Behavior

Shift in government procurement toward domestic private players under the 'Atmanirbhar Bharat' initiative is increasing demand for C2C's locally developed IP.

Geopolitical Risks

Global defense trends and local 'Make in India' requirements influence the company's ability to create and sell products locally versus globally.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by Ministry of Defense procurement policies and SEBI Listing Obligations. The company must comply with mission-critical security standards for defense applications.

Environmental Compliance

Not specifically disclosed.

Taxation Policy Impact

Effective tax rate in FY25 was approximately 29.8% (INR 12.28 Cr tax on INR 41.12 Cr PBT).

Legal Contingencies

The Monitoring Agency (ICRA) reported a deviation in the utilization of IPO proceeds where funds were paid to vendors different from those listed in the prospectus, though the company justified this as seeking 'best deals'.

⚠️ Risk Analysis

Key Uncertainties

Uncertainty regarding the timing of 'emergency procurements' and the specific product mix in the order book, which can cause margin volatility between 25% and 35%.

Geographic Concentration Risk

Transitioning from high global concentration to increasing domestic Indian exposure.

Third Party Dependencies

Dependency on hardware vendors for system integration; management noted potential constraints if material purchase support is unavailable.

Technology Obsolescence Risk

High risk in electronics; mitigated by a 10-year replacement cycle and focus on software-driven retrofitting.

Credit & Counterparty Risk

Trade receivables rose to INR 109.96 Cr in FY25 (nearly 95% of annual revenue), indicating potential working capital pressure and long payment cycles typical of defense contracts.