Order book surges, but margins compressed in transition quarter

Call confirms ₹205 Cr stand-alone revenue with 11% YoY growth; delivered result shows consolidated -25.3%, explained by overseas deconsolidation June 4.

Call states order book ₹1,800 Cr, +31% YoY; order inflow ₹360 Cr (+70% YoY). Confirmed.

Call: revenue ~USD 0 in FY25, exceeded USD 10M (~₹100 Cr) in FY26, expected to double/triple in next 2 years = USD 20–30M range. Prior guidance aimed for $30M in 2 years. Consistent.

Q1 PAT margin 6.59% stand-alone (₹14 Cr on ₹205 Cr); continuing ops PAT only ₹11 Cr on ₹204 Cr consolidated (5.4%). Management acknowledges Q1 'muted' but expects revenue mix improvement. Evidence of margin improvement is forward-looking, not yet delivered.

French court approved deconsolidation June 4, 2026; entities transferred to MBDA and SII; converted to liquidation proceedings July 2, 2026. Management explicitly stated 'no further material financial impact.' Claim supported.

Deconsolidated T&S Group SA and subsidiaries June 4, 2026; moved to liquidation July 2. Eliminates prior-year drag; focus now 100% on India standalone ₹205 Cr (+11% YoY).

CFO confirmed: '25% level, and we'll maintain that for now.' No numeric change from prior guidance. Full-year target still 25% for India business.

Prior $30M/2-year target; current call: USD 25–30M in 1–2 years. FY26 achieved USD 10M+, FY27 expected to double/triple. On-track, no upgrade.

Q1 stand-alone PAT margin 6.59% (impacted by low BTS mix). Target 13%+ EBITDA long-term. No change to target, but Q1 miss raises execution risk on timing.

Won strategic partner award from global industrial/energy conglomerate (Q1). Initiated NPI process for electrification, grid automation products; expected contribution in 2 years. New growth vector, not prior program.

Yes, we expect clear strong revenue growth in BTS this year and coming years. High quarterly variations due to project lumpiness, but full-year basis strong growth expected.

Majority from BTS segment. About two-thirds of total advances are BTS.

We have a global OEM, one of the key global OEMs that we added as customer. Ramped over last year. Revenue was ~0 in FY25, exceeded USD 10M (INR 100 Cr+) in FY26. Expected USD 25–30M in coming 1–2 years. Strong visibility, in line with expectations.

About 10% EBITDA. Can vary slightly up/down by customer/segment, but not huge variation. Cost-plus model, 10–11% is benchmark EBITDA margin.

Yes. We're refocusing engineering services team (freed from overseas subsidiary winding down) to work with EMS team offering end-to-end design-led manufacturing solutions. As those progress, expect higher margin contribution from those businesses.

Revenue was 0 in FY25, ramped to INR 100 Cr+ in FY26. Expect to double/triple in next 2 years. Will see contribution this year and further ramp next year.

Products are in production, very highly recurring business with variability from longer capex cycles in semiconductor manufacturing. 2–3 years strong visibility. Fully qualified in FY26. Continue adding new part numbers. Steep growth over couple of years then stabilizes in 1–2 years, fairly stable after.

For PCBA and box build EMS, we're main supplier in India, first major supplier. Main competition is Southeast Asia, basically Malaysia. No direct competitors in India for EMS business. Adding other supply chain parts; other good companies benefiting from India shift.

In EMS, design and IP belong to customer. Not allowed to sell same product to other players. However, in preliminary discussions with other customers looking at India as supply base for their own sourcing strategy. Still early stage, will update as progress.

Space opportunity exciting. 25+ years in space, moved from components to modules to subsystems to payloads. Objective to go into satellite integration. Ecosystem has start-ups with innovation (Skyroot success). SBS program moving well, started booking good orders, expect very strong order intake this year. Also executing major electronic warfare payload program closely aligned. Expect repeat requirements post-delivery.

Strong growth in both businesses. Possibly slightly higher BTS contribution in short term (1–2 years), but not hugely different. May be marginally favorable to BTS rather than 70–30 split, but not drastically different.

We will reach 25% level and maintain that for now. Don't see reason to change it significantly based on order book trend and projects under execution.

Part of value-added engineering service to EMS customers. Roughly ₹55 Cr order from export customer for electronic warfare program. Not always recurring (application-specific). Volatile demand, high order intake some years, lower others. Substantial order but small revenue contribution. Won't make big impact on future prospects.

Maintain ~25% revenue growth for FY27 and FY28 based on current visibility. Last year reported 12.5% margins; aiming 13%+ and could remain stable or slightly improve next year, but too early to comment on FY28. Export ~50–55% or slightly higher given EMS growth, but could remain in same range, nothing much expected to change.

Excited, making good progress. Virupaksha and UHM are development programs. UHM: completed first phase design reviews, well underway on first prototypes. Expect prototypes next year demonstrated and order delivered, then wait for HAL serial production. Virupaksha: also in product design, expect development orders complete Q4/Q1. TACAN: technology partnership, localization design work ongoing. First deliveries beginning next year, awaiting further orders 1–2 quarters. All progressing well.

Progressing well. Even though direct customer may be PSU like HAL or GRSE, systems are critical to platform/capabilities so enhanced engagement with end users already. Beyond that, also in various levels of discussion and RFI responses on full system opportunities with armed forces directly. In progress; will update as they mature.

Lot happening beyond 4 bullet points. Major ramp-up of engineering team and capability across skill sets, focused on system integration objective. Bringing in new talent to enable execution and deliver new programs and answer new opportunities to customer satisfaction level.

Specific opportunity with export customer around electronic warfare. Beginning for us. Various levels of discussion with different customers. Early to quantify what it could be in several years. Clearly need and demand. As we close opportunities, meaningful contribution in revenue and margin.

Targeting ~20%+ margin profile, similar to domestic. Main difference: export BTS not all tender-based (not L1 type), relationship-based, can reach reasonable agreement. Like export opportunities for this reason. Once systems built (UHM, etc.) enter production, major export demand possible, system-level opportunities can have higher margin profile beyond BTS.

Design stage complete, construction starting soon. Land belongs to other group company, private limited. Centum doesn't invest in FY27. Next year, once shell ready, capex for factory, MEP, HVAC, clean room, plant machinery. Towards end of FY28, capex flow could start. High-level estimate ₹50–70 Cr. Will update as budgeting progresses.

Won't speak about specific companies. Have 2 businesses with different competitors. BTS: ahead in space, on par with competitors in radar/EW (some ahead of us historically). EMS: certain segments/differentiators especially export customers (unique manufacturing requirements, supply chain complexity). On UHM program, >10 bidders interested, only 3 shortlisted, we were L1. Not focused on high-volume consumer electronics; competitors better positioned there.

CFO reaffirmed: 'confident of reaching 25% level, maintain for now.' Order book ₹1,800 Cr (+31% YoY) and order inflow ₹360 Cr (+70% YoY) provide strong visibility. Project phasing risk remains (BTS lumpy).

Forward visibility based on current order pipeline. CFO: 'that's the visibility that we see as of now.' Order book and new programs (DLM, electrification NPI, defense/space payload orders) support trajectory; not yet quantified for FY28.

Q1 delivered 11.28% EBITDA (stand-alone ₹23 Cr on ₹205 Cr revenue). Management: 'revenue mix to improve as execution on key BTS programs accelerate.' Margin recovery depends on H2 BTS contribution and product mix shift.

CFO: 'too early to comment on next year.' Dependent on order profile booked during year and design-led manufacturing contribution (early stage).

Semiconductor equipment customer at 10–11% EBITDA margin benchmark. Not expected to vary hugely by customer/segment. Structural ceiling for pure EMS unless elevated to design-led manufacturing with higher margins.

Design stage complete. Land owned by affiliate group company (private limited). Centum not investing in FY27. Construction starting soon.

Towards end of FY28, capex flow to start for factory, MEP/HVAC, clean room, plant machinery. High-level estimate provided; will refine in FY28 budgeting.

Single global OEM customer dominates semiconductor equipment EMS business (>USD 10M FY26 revenue, growing to USD 25–30M target in 1–2 years). Customer capex cycles and supply chain decisions are single point of failure.

BTS business has high quarterly variations due to project-based revenue recognition over 2.5+ year cycles. Q1 revenue impacted by execution schedules (₹120 Cr order inflow but only partial revenue recognition). Risk: delays cascade to later quarters, missing quarterly targets despite strong backlog.

EMS business (growing segment) structurally at 10–11% EBITDA (cost-plus model). Q1 stand-alone PAT margin only 6.59% (₹14 Cr) due to product mix. Design-led manufacturing (DLM) higher-margin capability in early stage; first wins expected 'coming quarters' (no timeline).

BTS core programs depend on HAL, DRDO, ISRO, armed forces budgets and capex cycles. Policy changes, budget cuts, or geopolitical shifts could delay or reduce order intake. FY27 guidance assumes continued strong order momentum.

Reported consolidated PAT ₹105.5 Cr (NPM 51.1%) includes ₹94 Cr one-time deconsolidation gain. Continuing operations PAT only ₹11 Cr (5.4% margin). Consolidated revenue -25.3% YoY (delivered result) but call claims 14% growth (likely pro-forma). Discrepancy raises transparency risk.