Strong execution cloaked in conservative guidance

Admitted minimum 1-6 month delay; internally expected August-September, now likely Dec-March

Dependent on shipyard (GRSE, GSL) execution; 1-2 line items may slip to FY28

Management maintains 15% guidance, citing need to normalize Q3-Q4 production to 'more even' levels

Q2 OPM 27.9%, EBITDA 27.43% — in line with ~28% guidance

Confirmed in call; strong multi-year visibility

Upgraded from 21-23% to ~28%, corroborated by Q2 OPM of 27.9%. Reflects operational leverage and improved mix.

Despite Q2 beat of 26.5%, maintains FY27 guidance of 15-plus percent. MD cited strategy to 'normalize' production across quarters, implying Q3-Q4 softness.

Prior call hinted at near-term clarity; now admits '1-6 months' minimum delay and internal estimate of August-September turned December-March at best.

₹7,334 Cr acquired till 1 Oct vs ₹55,000+ Cr FY27 aspiration. Dependent on QRSAM/NGC clearances from MOD and shipyards.

QRSAM is 99% confident to come very soon. Private sector risk low; QRSAM is complex system requiring 10-12 years cumulative expertise. We are design partner with 99%+ confidence on award.

Expected within 6 months, buyer nominated equipment process takes 1-6 months per line item. NGC first order potentially ~₹20,000 Cr by March; ₹20K Cr expected in 99% of cases.

No upgrade. 25-26% looks good but we are templating 15-20% to normalize production across quarters (Jan-Mar is typically higher). We plan 15-plus percent only.

Fully confident to meet/exceed ₹55K Cr guidance. QRSAM, NGC, HAMMER, Shatrughat, Samaghat in pipeline. ₹25K Cr excluding QRSAM, ₹55K+ with QRSAM.

Nomination started with multi-vendor competition, we became L1, then converted to BNE. Margins similar whether nomination or competition; our R&D and indigenization differentiate. Unique selling point sustains margins.

Delay is not that much. Internally optimistic; internally estimated August-September. Complexity of documents huge; may spill over. But 99% confident coming very soon. Can't slip that much.

6-8 start-ups in dialogue. INR50-100 Cr orders secured this year. Expect 1-2 big orders in next 1-2 years. Counter-drone solutions demonstrated; export leads active. Hopes for good counter-drone orders soon.

IR and RF seekers for Akash, Astra, others (not BrahMos). Proactively developing BrahMos seekers. 1,000+ capacity combined IR/RF. 20-30% of missile cost is seekers — high business volume expected.

Maintained despite Q1-Q2 outperformance at 26%. Management cites production normalization and lower Q3-Q4 expected growth.

₹25K Cr excluding QRSAM, ₹55K+ with QRSAM. To date only ₹7.3K Cr acquired; dependent on QRSAM/NGC clearance by Mar 2027.

Q2 delivered 27.9% OPM; closing remarks confirmed ~28%. Driven by operational leverage and favorable product mix.

For IR seeker factory, facility expansions, and production capacity. Not a variable item.

Repeatedly delayed order, now admits 1-6 month minimum wait. Core ₹30K Cr opportunity at risk of FY28 shift. Undermines FY27 order inflow guidance.

₹20K Cr expected orders dependent on GRSE/GSL construction timelines. BEL is subsystem supplier. 1-2 line items may slip to FY28.

₹7,334 Cr acquired till 1 Oct vs ₹55K+ Cr FY27 aspiration. Misses imply lower earnings in FY28 if not recovered.

Adani Defense, L&T, and others entering missile/radar space. Private sector openness on QRSAM, AMCA, and future tenders. Margin/order erosion risk.

Management explicit that Q3-Q4 will see slower growth (15-20% vs 26% in H1). Production is being 'normalized' across quarters. Miss risk if order execution doesn't materialize.