Apollo Micro Systems Ltd (NSE: APOLLO) Q1 2026 Earnings Call dated Aug. 04, 2025
Corporate Participants:
Unidentified Speaker
Sudarshan — Chief Financial Officer
Baddam Karunakar Reddy — Founder and Managing Director
Addepalli Krishna Sai Kumar — Whole-time Director, Operations
Analysts:
Unidentified Participant
Shreyansh Gattani — Analyst
Kripashankar Maurya — Analyst
Dipen Vakil — Analyst
Rupesh Tatiya — Analyst
Malay Sameer — Analyst
Garvit Goyal — Analyst
Pratik — Analyst
KS Subramanya — Analyst
Hardik Rawat — Analyst
Sunil Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Apollo Microsystems Q1 FY26 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mohit Loharja from ICICI Securities Ltd. Thank you. And over to you, sir.
Unidentified Speaker
Yeah. Hi. Thank you, Ishaka. And good morning everyone. Thank you for joining us today for quarter one FY26 call of Apollo Microsystems Ltd. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side we have Mr. Badam Karnakar Reddy, Managing Director, Mr. Sai Kumar, All Time Director Operations and Mr. Sudarshan, Chief Financial Officer of the company. So without further delay, I would now hand over the call to management for the opening remarks. Thank you. And over to you, sir.
Baddam Karunakar Reddy — Founder and Managing Director
Presenting. Yes, good morning. My name is. My home director Saikumar will be presenting about company and please go ahead.
Addepalli Krishna Sai Kumar — Whole-time Director, Operations
Thank you very much, sir. Good morning everyone. My voice will be little low. I was not keeping well so a little low voice. I hope it would be audible. Once again, good morning. Thank you for being with us today. It’s always a privilege to engage with our valued investors and provide updates on our performance strategy and future outlook. I’m pleased to share that AMS has delivered yet another robust quarter marked by consistent execution, operational discipline and a strong commitment to indigenization and the make in India initiative. I trust you had the opportunity to review our financial results.
The letter to shareholders, press release and investor presentation. This marks our first interaction for the fiscal year 2026. Let me first take you through our Consolidated performance for first quarter ended June 30, 2025. Sorry. June 30, 2025. In Q1FY26, we delivered another outstanding performance. Building on the momentum from a landmark FY25. Our revenues surged by 46%. Y o y to 134 crores, up from 91 crores in Q1 FY25. A result of a robust order book execution and successful transition of multiple systems into the production phase. Our EBITDA rose sharply by 83% reaching 41 crores in FY26.
Q1. This translated into an EBITDA margin expansion of 600 basis points improving from 25% in Q1 FY25 to 31% in Q1 FY26. Due to cost efficiency our PAT more than double, digesting a 110% y o y increase to 18 crores compared to 8 crores in the same quarter previous year. Correspondingly, PAT margin improved by 400 basis points, YoY and QoQ reaching 13% in Q1FY26 from 9% in Q1FY25. These results underscore our continued operational excellence and reaffirm the strength of our growth trajectory in the current financial year and beyond. We are pleased to begin with two significant milestones that marked our continued growth and global progress.
Firstly, we are proud to share with you that we have received a maiden export order valued $13.37 million worth around 113.81 crores which we have already informed to the shareholders for the development of Advanced Avionics system which is one of the critical systems which will be for a dual use for both civil as well as military aircraft platforms. This is a very very critical system and we have been chosen as a development partner for it and we are very proud about it and proud for the country as well. Additionally, Equity has reaffirmed our financial strength by upgrading our credit ratings by two notches.
Our long term rating now stands at equity A minus A2 plus reflecting enhanced confidence in our fundamentals and future trajectory. I would now like to give you a few updates on some of the corporate actions. Firstly, regarding the CapEx, the CapEx is ongoing very smoothly as per the schedule and there are no delays and the phase two of the CapEx which we have been talking about, the phase two already has started. I would also like to touch base on the working capital cycle days reaffirming on the working capital cycle days as we have been informing earlier, we expected to reduce IT by under 220 days from FY27 onwards once we fully, you know, take a full fledged advantage of the CapEx that we commission upon and also going to a lot of systems getting into the production phase.
I would also like to give you one more update that we have received in principal approval from the stock exchanges for listing of equity shares in preferential basis. Looking ahead, we expect revenue to grow at a CAGR of 45 to 50% over FY26 and 27 driven solely by the core business excluding any contribution from the recent acquisition. This growth is underpinned by A healthy order book and multiple products entering the production phase. Operating margins are projected to improve in the first half of FY26 due to favorable operating leverage and product mix. However, ongoing Capex is expected to moderate margin expansion in the later half of FY26 and into FY27.
Our vision is bold, built on strong fundamentals and an unwavering commitment to creating value for our stakeholders. Thank you for your continued trust and support. We now look forward to addressing your questions. Over to you, Mohit.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shreyansh Ghatani from HG Securities. Please go ahead.
Shreyansh Gattani
Hi, good morning sir. There are a few questions, so firstly if you could outline what is the order book as of June 30th or you know, the latest order book. If you could give some guidance on.
Addepalli Krishna Sai Kumar
That, please complete all your questions, you know, so we’ll answer.
Shreyansh Gattani
Okay, so question was on the qr, Sam. So on the BL contract they mentioned that they should be expecting an order sometime in February, March. So I wanted to understand is our contribution going to be specific to the BDL side of production or it’s for both the agencies since you know it’s going to be manufactured by BDL and BEL both. And on the MIGM order update, if you could give us some sense on when do we expect because you know, the DAC did not have that on the agenda. So if there’s any progress on that.
Front. Those were the questions that I had.
Addepalli Krishna Sai Kumar
Okay. The order book currently stands at around 735 crores. And regarding the MYGM order update, I would like to say that the priorities, you know, you know, keep shifting in certain things. The first thing is that, you know, there are some deep sea mine requirements, you know, for which a little more priority was there because it will take some more time. That’s the reason the DAC has already approved a deep sea which is a mold mine. Actually we have been updating to all our shareholders that, you know, we have already developed this particular system and we have offered a DRDO for its validation actually.
Okay, so migm, as far as the MIGM is concerned, the process is that, you know, we will also have to sign a TOT agreement with dido. We have received a copy of that. We have signed and submitted to them. A formal handover takeover, you know, is something that’s going to happen in next few few weeks. You know, I’ll not be able to give you the exact dates and timings unless we get a proper, you know, update from the drdo. But you know, the things are on track. There is no further, you know, delay. Everything is going on track, but only the timing and the priority based on the, you know, various other geopolitical situations and the other things MODI is taking.
But things are on track. We have because this things are on track. Everything we are going very strategic. Okay. We have recently acquired few more machineries for, you know, manufacturing of the full fledged composites other than the existing machines that we already have for the shells of the migm. And you also know that we have acquired ideal explosive and warhead of the MIGM will also be done by us. Strategically, we are aligning. Just last week itself, myself, Maryland and other senior colleagues, our other Director Technical and other senior colleagues, we were there in with the DRDO with the team.
They have discussed in a very detailed way along with the video team, also reaffirming that, you know, the order is going to come and ask us to gear up with the complete line of manufacturing and you know, make a setup. All the documentation, they are asking us to keep it ready. All that is happening, you know, at the background. Okay. More than that, you know, I will not be able to update in this particular thing exactly timing for the Renault regarding qr. Some our MD will give you an update.
Baddam Karunakar Reddy
Yeah, some we have good participation. Here’s almost four subsystems, critical subsystems we have, we have supplied during development stage. Once the order comes to the main order coming to Bell from Bell missile. Order comes to BDL from bdl, subsequently placing order runners. We are making onboard computer and complete navigation system for QRSM and also power distribution units. Also we are making for QSM and also one of the critical actuation system. Also we are supplying to this qsm. Yeah. Once BDL receives, we are also expecting good order from BDL regarding this qrsm.
Shreyansh Gattani
Got it. So do we, you know, typically wait until the order comes or do we try to like start, you know, prepping for the order before, you know, the order is actually in hand?
Baddam Karunakar Reddy
Yeah, before only the budgetary upper and all we are submitting. Once black and white order receives the bdl, then maybe next minute after receiving customers of days they’ll be releasing Orders on The sub vendors I.e. the generally PL is following anything I’m sure though I’m expecting before December the this gives some others we are expecting okay.
Shreyansh Gattani
Also before December so DL was expecting on March February March So I was wondering. Okay.
Baddam Karunakar Reddy
Recently. Recently there was a meeting Defense Secretary Santa Defense Secretary presented along with QSM some other programs also they are going to Release orders almost 2 lakhs worth orders embody is going to release in fact there was they invited industries all the industries and their requested industries to enhance the facilities to gear up the upcoming production orders.
Shreyansh Gattani
Okay.
Baddam Karunakar Reddy
As for the defense security this thing 6 months time next 6 months time he said 2 lakhs crores what is releasing not only QSM there is another program called Akashi also the process is going on maybe next DAC something it goes well next to DAC I’m expecting clearance.
Shreyansh Gattani
Got it.
Baddam Karunakar Reddy
There are some other strategy programs Things are not coming on news and all but programs are sundry programs also our participation is there that others also in fact we are expecting altogether like by December the Defense Secretary production before December orders will be written to other.
Unidentified Speaker
Got it? Got it. That’s good to know. So just one follow up. So on the IDEAL that you mentioned so if you could give on, you know where we stand in terms of the gross margins and you had mentioned we. You know that there was certain consultants that were appointed to you know get things in order so how’s that progress going and if you could give a progress on the capex where we are in time to you know begin.
operator
Sorry to interview Sir, I will request you to return the queue for follow up questions as there are many participants.
Shreyansh Gattani
Thank you.
Baddam Karunakar Reddy
Thank you.
Baddam Karunakar Reddy
Shall I answer for this IDEAL listing IDEAL acquisition format is going on I think most probably this week we’ll be completing and like we appointed some of the consultants DRDO cinema scientists they are working on it. So we are also applying for the technology transfer from DRDO lab for using the ammunition for MITM and a couple of other missile programs Also we want to make our own explosive that is going on other things like can you. Can you.
Addepalli Krishna Sai Kumar
Yes sir. So financials point of view, you know we will not be able to tell their quarterly results are not out actually so we will give a more updates on IDEAL once this share transfer process gets completed in next couple of weeks. Until then I think it will be better for us to refrain because DOCL is also a listed entity to this extent I think it should be sufficient. You know that it is.
Baddam Karunakar Reddy
Okay.
Shreyansh Gattani
Thank you.
operator
Thank you ladies and Gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow up question, we would request you to rejoin the queue. The next question is from the line of Kripashankar from Mirai Asset Capital. Please go ahead.
Kripashankar Maurya
Thank you for the opportunity. Congratulations for being a good set of numbers. Sure. We just want to follow up on the mood mind. I want to understand what could be the overall opportunity for the Moldmind and who are the other competitor among the tax working on this platform.
Addepalli Krishna Sai Kumar
We have been talking for several, you know, years. You know, you know what we have been. We can tell what we cannot tell. Okay. The DAC approval value you are already you know aware of. Okay. It said YDO program primarily and presently we have a system which is already ready and we are working with it. It’s too primitive on us to say that you know who is will be the participants in that. It’s in the in ascent states as as the system at our end is already readily available. Okay. We have a fair chance and a better quantum of you know, percentage out of the overall DAC approval, you know that is already been accorded is going to come to us is what we are expecting.
Baddam Karunakar Reddy
So far. We are the only people established more minor technology for other people. It is going to take time any other people wants to come into this business. It is going to take just couple of years.
Kripashankar Maurya
And after the acquisition of Ideal. So just want to understand the post equation how much additional value we can, you know create to the existing platform where we are currently like apart from electronic components we are supplying them. What will be our total value schable increase or the easing product of the new single platform?
Addepalli Krishna Sai Kumar
No, I didn’t get your question properly.
Kripashankar Maurya
So suppose if you’re supplying 15% of electronic component to any program then post acquisition of IDEAL exclusive what will be the our value to the particular platform will increase.
Addepalli Krishna Sai Kumar
You have to understand. You have to understand. IDEAL is not. You know we are just in the process of acquiring. We are going to build up certain capabilities in that in terms of the propulsion and the water. But present opportunities that we already have like the short range rockets that we are developing, the anti submarine warfare rockets we are developing the mines and the limpet mines and the wonder water mines and other various systems like aerial bombs and all what we are developing. These are our in house products actually. Okay. Full fledged products. Presently we are contemplating, you know for the as a backward integration using idea and the capacities will be More than sufficient for us.
Okay. How the approach towards you know getting into a full fledged missile programs and their warheads and other things like is something that we are contemplating to do or next few quarters actually at this point of time how much percentage it would be and all you know to quantify it would be very difficult unless we enter into any program whatever these programs which I have named currently for all of them we are presently outsourcing that going forward we will be doing in house based on the existing you know facilities and capabilities that we have building up.
Kripashankar Maurya
Okay. Okay thank you sir. Thank you very much.
Unidentified Speaker
Thank you for my time.
Baddam Karunakar Reddy
Thank you.
operator
Thank you. The next question is from the line of Deepen Vacill from Philip Capital Please go ahead.
Dipen Vakil
Hi. Thank you for the opportunity sir. So my first question is on the lines of the what so you mentioned that we are expecting some 2 lakh crore worth of orders on the defense side of it in next six months so what would be our order pipelines on this 2 lakh crore like which all platforms will be involved with so any clarity on that.
Baddam Karunakar Reddy
While you telling our portion is I I am not supposed to disclose right now but good number of systems we are supplying to all these programs I want to tell you one very important this thing is if you consider all the missile programs whatever DRDO is doing 63% of electronics and electromechanical activities and all we are doing okay and name any program our participation is there small or big there overall there is a list program as prepared and the other day they announced 63% of electronics and electromechanics we are doing for all the missile programs Order value I can’t disclose right now but once once the program names the announcement then we are in a position to arrive at least but it is not as don’t know I’m not supposed to disclose other VAL please.
operator
Hello Mr. Your voice is not audible hello.
Dipen Vakil
Hello. Hello I’m audible now yes yeah yeah so thank you for that clarification sir. So and recently some competitors have mentioned about some development orders on project Kusha and other DRDoS missile systems that they have received so I mean are you involved in project whether we have received any developmental orders on that and. And what could be the quantum of that.
Baddam Karunakar Reddy
I can’t tell you but we are also doing couple of onboard systems we are doing and we are the software we are the only people only company deliver these systems no industry has delivered so far it is under development I think everything everything goes well next couple of months the trial testified is they’re planning DRDO but they’re waiting for the other other industries supplies also they’re waiting for other other subsystems review. They said the next three months time they are going for test five.
Dipen Vakil
So according to you what will be the timeline for project Pusha from developer developmental stage to contact finalization after this?
Addepalli Krishna Sai Kumar
That’s too sensitive.
Baddam Karunakar Reddy
In the 2 years time Drdo is actually wants to take Kusha is not single missile and I say almost four variants are there One of the variant I think shortly punished for test pile. There’s a time period that MOD has fixed in the next two years time the development activity complete and it has to go to production phase.
Dipen Vakil
Got it sir, Got it. Thank you so much for answering my question.
Baddam Karunakar Reddy
Thank you.
operator
Thank you. Participants are requested to limit your questions to two per participant. Should you have a follow up question we would request you to rejoin the queue. The next question is from the line of Rupesh from Intel Sense Capital Please go ahead.
Rupesh Tatiya
Yeah. Hello sir, thank you for the opportunity and congratulations on fantastic set of numbers. My first question sir is on the torpedo side of the things if you can give some comprehensive update on all three programs Varunastra when can we expect order? If you are in a position to disclose the quantity then the second one is ESWP electronic My understanding is this is linked with submarine and how many. I mean if you’re in position to disclose how many what is the total ELWT government is looking to order Are these linked with the new submarine deliveries or existing submarine is going to you know order this ELWT and third one is AWT AWT My understanding is it is.
It is anti submarine torpedo and then there are two versions one is ship launched and one is helicopter launched so LWT is there any acceleration post, you know operations. So if you can give some comprehensive update on all three programs with these nuances.
Baddam Karunakar Reddy
Yes, thank you. And you I think earlier the thing also we have announced ESWT program We are the only people of wt complete omic system we are providing eswt goes into it’s three variants we are doing one is a 6.3 version 6.0 version also we are doing 6.0 goes into P75 tank Indian government has signed MoU with France they will be like in collaboration with Indian industries They will be manufacturing submarines and P75 6.0 heavyweight ARPU P75 submarine ESW2 another version 6.22 and all goes into Arianes and Arizaman and all nuclear submarines they’re going to configure and ALW2.
You’re talking about ALW2 as a good number. So production is there. But I can’t quote you what is the numbers and all user trials. I think next couple of months DRDO is going to complete a the user trial first. Then after that RFQ going to release by intern Navi. Regarding ALWT program, varunas already 63 number order already BDL received and we are supplying your signal processing and other technologies. We are supplying. Right now negotiation is going on shortly. We are expecting orders from Varnasra. They are expecting under any time. But they started doing negotiations. Once they receive order, the video will be releasing our orders also.
Rupesh Tatiya
Thank you. Thank you for that clarification. Sir. Another. Another question. Second question is. Sir, BDL received. Recently received one order for atgm. The system was not disclosed but the order value was I think 8,09 Custom Road. So did we also get some component supply order order from that?
Baddam Karunakar Reddy
Yeah, we are doing one of the subsystems system. We are doing program also. We are doing.
Rupesh Tatiya
They announced one order to the exchanges, sir.
Baddam Karunakar Reddy
Sorry.
Rupesh Tatiya
They announced one order to the Exchanges. 809 crore. So what I want to know is what is our contribution?
Baddam Karunakar Reddy
No, no. Order received. Is order finalized and it has been, you know given for us. Companies like us order received means they will come through all the documentation and other things like that is something which will take a lot of time. That’s what MD is trying to tell. Okay.
Rupesh Tatiya
So what you’re saying is from BDL to Astro Micro, Apollo Micro, the order hasn’t come.
Baddam Karunakar Reddy
Yes, before September I’m expecting.
Rupesh Tatiya
But what is the quantum, sir? I mean out of this 810I am.
Baddam Karunakar Reddy
Not able to give a value. Please. As per the regulation this. You know we are not supposed to disclose any values. Come. Unless until I can share with you any value please.
Rupesh Tatiya
Okay. Okay. Thank you. Thank you for asking my questions.
operator
Thank you. Participants are requested to limit your questions to two per questions. Should you have a follow up question, we would request you to rejoin the queue. The next question is from the line of Malay Sameer from Breakthrough Stock market. Please go ahead.
Malay Sameer
Hello. Shall I start?
operator
Yes, sir.
Malay Sameer
Yeah, yeah. Sir, I would like to sort of highlight a communication from Ministry of Defense where they have talked about two participants in MIGM orders. One is BDL and the other one is Apollo. Now I want to take this question ahead. Number one, you said within a couple of weeks this order will come in. Would you like to share with us the outside gate within which you need to. You feel you could get this order outside limit States number one and number two or what are your estimates within a range of the quantum of this order.
And if that order comes in, will it necessarily be supplied by us and BPL and no other parties since we’ve been involved in the trial production?
Addepalli Krishna Sai Kumar
Can I take the question, sir?
Baddam Karunakar Reddy
Yes.
Addepalli Krishna Sai Kumar
So I think now you have wrongly understood that we have not said in couple of weeks we are getting the order actually. Okay. We told that there is a process as a disability partner there. There should be a tot, you know, documentation sharing that is happening and that is likely to be completed in next couple of weeks. That is what we have told. But not the order. Order will take some more time. That’s what I have explicitly clarified. You know, when we were talking about the Mode 9 and MIGM port actually and the timing of the.
That was the first question, you know, which is asked by one of the panelists in the beginning. Okay. Could be a year, two years, three years, a few months.
Malay Sameer
Now you meant to say in terms of execution or in terms of getting an order?
Addepalli Krishna Sai Kumar
In terms of getting an order. We are expecting we’ll get in this financial year.
Malay Sameer
Okay. And my second question was that since DDL and us.
operator
Sorry to interrupt you sir. Actually your voice is breaking and there is some background noise from your life. Can you please.
Baddam Karunakar Reddy
Yeah, this one. No, like I want to clarify here. MK, BDL and Apollo Microsystem identified as a DCPP partners. Like I think what we are hearing is 50% order goes to median. 50% order comes to econometric system.
Malay Sameer
Okay. And so do you have any estimates of the quantum that will come into the electronics segment?
Addepalli Krishna Sai Kumar
There is nothing electronics. We are doing the complete. Mine actually. Okay. We are doing the complete mind. It’s not about electronics.
Baddam Karunakar Reddy
This case is a different. We are doing a complete weapon. We are doing including electronics, including explosive. This thing including instrumentation, including the shell and all. Everything we are. We are doing.
Malay Sameer
And sir, what are. What is the range of these orders in terms of size that you can estimate? I know you would not have it right now but what is your guesstimate about the size of these orders Once. They start coming, both the companies may get close to anywhere around 2000 crore each. Thank you so much. Thank you so much.
operator
Thank you. The next question is from the line of Garveit Goyal from Invest Analytics Advisory llp. Please go ahead.
Garvit Goyal
Hi.
operator
Yes sir.
Garvit Goyal
Good morning sir. And congratulations for a decent number. I have two questions. One is on the order book. We were speaking about some orders coming from naval sector. Right. And this emergency Procurement also. So can you put some color on this marine order status and particularly on the emergency procurement. Do you see any big orders coming coming at industry levels, particularly to the. Private space like in the areas of. Radar and electronic work. So that is my first.
Addepalli Krishna Sai Kumar
I would like to restrict the discussion. Related to Apollo industry questions. You know, I think this is a investor call. They can take it offline, sir, actually. But as far as the EP cases are concerned, we are bidding for certain EP cases. As and when we get an opportunity we will update you. It being ep, they are very sensitive in nature. What specifically we are bidding that also we are not in a position to disclose.
Garvit Goyal
Got it, sir. And secondly on this rare earth metal issue. So are we facing any challenges in the terms of execution from restriction or. Anything in future?
Addepalli Krishna Sai Kumar
as and when something happens? We’ll have to keep you posted. But you know, nothing. You know that we can comment as of now. It’s a very sensitive topic. We are refrained and restricted to talk anything on this particular, you know, supply chain related issues. Specific directive has been given by our customers not to talk anything about it.
Garvit Goyal
Okay, thank you very much sir. And thank you.
Baddam Karunakar Reddy
Thank you.
operator
Thank you. The next question is from the line of Pratik as an individual investor. Please go ahead.
Addepalli Krishna Sai Kumar
Before. Before Mr. Pratik speaks, you know, I would like to sensitize the point that the entire world, you know, we are running in different areas. Conflicts are happening. The all the services are on toast. The entire industry, including Apollo, all of us are on toes. We are working hard 24 by 7, you know, to meet the requirements pushed by our customers like DRDO and defense BSVs like BDL, B L HL and other private industry customers. I request everyone not to ask any extremely sensitive questions because these concourse gets recorded and they are all published actually which will geopardy the national security.
It is. I will very conveniently say no to you. But if you refrain from asking any extremely sensitive question, it would be good at the interest of the nation. So that’s my personal request on behalf of the company. So Mr. Pratik, you may further go ahead and ask.
Pratik
Thanks a lot sir for giving me this opportunity and congratulations for a great set of numbers. Since most of the questions have already been answered so I will not repeat them. My first question is with respect to the promoter pledge part. I think I have seen that the promoter pledge part has come down to 37% on. And the last time we spoke two quarters back the roadmap was to bring it down to zero by FY26. So I just wanted to know if we are on track or any change in time zones.
Addepalli Krishna Sai Kumar
We are on track. We are on track.
Baddam Karunakar Reddy
We are reducing. In fact, month after month, we are slowly reducing.
Pratik
Fantastic, sir, thank you for answering that. My second question is with respect to the export side. So just wanted to know if we have a dedicated team for export and what kind of market do we see from the export side?
Addepalli Krishna Sai Kumar
There is nothing like a dedicated team for export or anything. Primarily the recent order which we have received is one of our development contract which we have taken action. But generally, you know, it is a full fledged products. You know, getting a development contract in an export is not so very easy. It’s a very challenging task to get into that ecosystem. We are in the process of getting into that mode also. But several of our, you know, fully matured products like our one such cases, our mine and similarly, you know, some of the aerial bombs and submarine rockets, like a full flip systems are getting ready.
And some Kanakaji boards also, you know, are in process of development. Actually this year, you know, we have earmarked close to thousand million for developing such certain Princess products, you know, which will be qualified to get into an export offer for an export opportunity and some tots also we are applying to the DRDO for a complete double systems also. So addressable market is there, you know, that is what, you know, we are trying to reach in the years to go forward.
Pratik
So just wanted to understand, do we apply for those orders on an individual basis or through DRDO and other organizations?
Addepalli Krishna Sai Kumar
No, DIDO will give license. We’ll have to take a permission from them, you know, before we, you know, give any kind of a proposition to anyone actually.
Unidentified Speaker
Okay, okay. Okay. Thanks a lot, sir. Thank you.
operator
Thank you. The next question is from the line of ALOK from sre. Please go ahead.
Unidentified Speaker
Hello, sir. Am I audible?
Baddam Karunakar Reddy
Yes, sir.
Unidentified Speaker
I just want to ask one question. You had mentioned around January that there was a collaboration between Apollo and Garden. So can you throw some light about what it was it and where are you in that region?
Addepalli Krishna Sai Kumar
We are jointly developing some products along with drc. But exactly what product and you know, what is the current status? We are not in a position to share in the public domain.
operator
Sorry to interrupt you, sir. There is an echo from your side and there is some background noise also.
Unidentified Speaker
Okay, thank you. Thank you.
Baddam Karunakar Reddy
Can you hear Me. Hello. Thank you. Hello. Hello.
Unidentified Speaker
Yeah, now it is supposed to be okay.
operator
Yes, sir. Now, thank you. Hello.
Addepalli Krishna Sai Kumar
Yes, now look. Now it is okay.
operator
Yes, sir. The next question is from the line of rupage from sir, again the voice is echoing.
Addepalli Krishna Sai Kumar
Vasan, Is it from our content room?
Baddam Karunakar Reddy
No, no, no. Nothing, nothing. Our controller.
operator
The next question is from the line of rupees from Intelsense Capital. Please go ahead.
Rupesh Tatiya
Yeah. Sir, thank you for the opportunity. Again, am I, am I audible, sir?
Baddam Karunakar Reddy
Yeah, yeah, yeah, yeah.
Rupesh Tatiya
My question is, is it linked to any sort of ship deliveries? I mean is there like every ship should have X number of mines and then as and when the new ships get produced, the mines will be procured or I don’t know, some army. Army. Army or defense forces gonna build a large inventory and then they will be distributed as and when needed. So I just wanted to understand this aspect of the mines order, sir.
Addepalli Krishna Sai Kumar
It has nothing to do with any ship building but rest of the inventory for what purpose there and how all that, you know, is very sensitive, you know, cannot be, you know, disclosed in a public domain. But it has nothing to do with any ship building.
Rupesh Tatiya
Okay, so deliveries are not linked with any ship mine deliveries are not any linked with the ship deliveries. That is the clarification.
Baddam Karunakar Reddy
Any infrastructure. Yes.
Rupesh Tatiya
Okay. Okay. And then I think I wanted to understand what is. What is our contribution to Brahmos? Because I think that’s such a big part of our defense arsenal. So what are we doing in that space? Any any color if you can.
Baddam Karunakar Reddy
Couple of things we are doing and Brahma’s new version DRDO now going on because now the old this thing know the many of the technologies absolute and that end up this thing is format is going on. We are already back there recently one of the other and we are. We are expecting more and more subsistence from brahmos also. Yes.
Rupesh Tatiya
So can it become a significant growth driver for us or next two, three. Years is one of the program. I was talking to one of the investor registines. If you consider all the misad programs like Brahmos so many programs. Agni program, MBA djam akash. Several programs around 100 programs are there. We are doing almost 63% of electronics. Apollo Micro System is doing. I mean that. That part I understand sir, but almost at least my understanding is it is. It is slightly higher priority or on fast track.
Baddam Karunakar Reddy
Also going on along with the other programs. Right now we are doing only one subsystem per commerce.
Addepalli Krishna Sai Kumar
I’ll take the answer. You know now that of Sindur has taken place. Okay. And Brahmas has been used. That’s what we are getting the information. It has taken a different stance altogether. But strategic weapons are as. As important like you know other many other programs for different type of innomissions, different weapons are being used. Actually something that we can cut a small mitzi with a small knife, you know, same knife we cannot use to cut a chicken, sir actually or a mutton. So for different missions, different requirement, different, you know, projects will be used, different weapons will be used.
So there is nothing that you know, any specific importance is there for any specific weapon or anything like that. Brahmos is a cruise missile. It’s an Indonesian missile out of which you know. You know, after several years a lot of indigenization has been done and there is a contribution. Similarly we earlier program, you know, we didn’t have contribution. No, no. We started taking contribution. We started taking orders in it. Going forward we are going to have how much it is going to anchor. It is not like that. We are a company who have a position in almost every missile program of the country.
Every indigenous missile program of the country. We have participation. So the revenue drivers or revenue this thing. There is nothing like that. The contributions keep coming. It’s not like you know based like you know, you can see several companies having a huge size of order book. It doesn’t mean that you know it gets executed. They executed over a period of five year, ten years like that. So there is nothing like a revenue drivers or growth or anything like that. Contribution will be coming from one part or the other part of different. Different programs and multiple programs like that.
Brahmos is one such program. We are part of much more sensitive and classified programs also.
Rupesh Tatiya
Okay. Yes. Finally, if you can give some incremental update on Pinaka compared to our last last conference call. Where are we on the Pinaka?
Baddam Karunakar Reddy
I think two industries are doing that. Export mil and economic explosive. The complete guidance electronics. In fact we are supplying to mil. And also there is a huge requirement coming up from our MOD also under the emergency procurement. Recently also we had meeting. I deployed team of people in Nagpur. They had meeting so that there is a projection from MIL and EL. Also some good numbers. I think everything goes well. Next three, four months time we are expecting that production order also from. From our MODI related things. But other thing, you know like export order.
Armenia. Everybody knows that Armenia order. These two companies are doing that order already we received and partially we received and we are in the process of completing the exclusion also next to three months time.
Rupesh Tatiya
That. That’s wonderful sir. Thank you. Thanks for answering my questions.
Baddam Karunakar Reddy
Thank you.
operator
Thank you. The next question is from the line of KS Subramanya. So as an individual investor, please go ahead.
KS Subramanya
Good morning sir. First of all I would like to congratulate and also as an Indian citizen express my indebtedness to this company for everything that is do it is doing for the sake of our defense and making us secure. Now I don’t want to go into any details. All I just want to know is it possible to divulge that how much was the order intake in this quarter? That is my first question. And second thing in the next three months or maybe by December any of the large ticket orders that the company has been expecting.
Is it. Is there a possibility of getting bagging any of these last ticket orders like 500 crores or maybe more than that thousand crore autos. These are the two questions which I have. Thank you sir.
Baddam Karunakar Reddy
Going on. But figure. I’m sorry I’m not able to give a figure but some good number of. Number of programs under process where things are going on like QR some we are doing. Once the QSM order then we’ll be knowing how much order will be before December we are expecting as per the recent meeting with the Defense Secretary Nadia D. So before December the bell and BDL are going to receive orders parallel BDL also class to place orders on sub vendors value and all. I think I’m not able to give you any value right now.
KS Subramanya
So I don’t need the value. But something large might come. That is a possibility. This being possibility within three days by December some large things might come. That’s the thing, right.
KS Subramanya
I want to share with you this financial year going to be a. I think a game change here.
Baddam Karunakar Reddy
Yes.
Baddam Karunakar Reddy
Because company has participated as I told you many programs. Our participation is there. Underwater weapon site also our participation is there. Missile electronics. Our participation is there. Airborne also our participation is there. So good. This thing we are expecting this final year. And everybody knows that we are going for major expansion. And the unit 3 also is getting ready. We. We are going to start occupying from October onwards. By December we want to complete the complete operational listing. Water start.
KS Subramanya
Okay. Okay.
Unidentified Speaker
Thank you sir. Thank you for your kind information.
operator
Thank you. The next question is from the line of Hardik Rawat from IIFL Capital. Please go ahead.
Hardik Rawat
Thanks for the opportunity. Good morning. Badam sir. Saisar and Sudarshan sir. So my question is slightly long ended in terms of. You know we are expecting no further expansion OPMS in the first half or visa vis the previous year. But then some moderation in the second half and FY27. How do you expect margins to move forward from there in FY28 and beyond considering that large Part of our systems. Will go into production and our facilities will also. Lastly, the utilization will also be improving by then. So what are your expectations in the slightly longer term?
Addepalli Krishna Sai Kumar
Arvic, FY28 is very far. We are still in FY26 middle. It’s like I think we should not be talking two years ahead. But broadly, you know, as we have been giving you guidance, you know, several quarters, there will definitely be a margin expansion once the systems get into core production phase. And that is something that you will start partially starting seeing starting from this finance year and subsequently in the next finance year and FY28. You know, I think it will be much better. I think, you know, quantification at this point of time may not be very appropriate.
But yeah, this is how I can tell you.
Hardik Rawat
My other question was with regards to the working capital cycle, now you’re expecting a reduction of 100, 100 to 120 days. You know, with improvements starting from FY27, these savings will largely come from inventory days. Would that understanding be correct?
Hardik Rawat
Yeah, that’s very useful. Thank you so much and congratulations on a good set of.
Addepalli Krishna Sai Kumar
Thank you.
Baddam Karunakar Reddy
Thank you, thank you, thank you.
operator
The next question is from the line of Sunil Shah from S. Please go ahead.
Sunil Shah
Yeah, thanks for the opportunity. So my question is to understand the entire defense cycle. If we just go back five years, the entire concept of, you know, atman gave defense PSUs a huge kick up in their businesses. Majority of them grew by more than compounded 30% the defense PSU. So now that order book is very high in defense PSU and they are outsourcing it to the private sector as well. So can we see a similar kind of a growth rate for private sector defense companies over the Next, let’s say three to five years at a compounded 30% kind of an opportunity? Is that if safe, directional assume.
If you could just let me know on that, please.
Addepalli Krishna Sai Kumar
Broadly I can say yes. Broadly I can say yes, but much in detail it is not appropriate to say because they are also our customers. And directly me telling that, you know, private industry share is going to grow compared to psu. That will not be a very appropriate way of, you know, putting forth. But you will, there will be a. Consolidation in terms of, you know, the business working style wherein the public sectors and the private sectors, I think V4C would jointly come forward in execution of the orders based on the capabilities. That is how, you know, you have to look forward. And we do not differentiate in terms of understanding that whose share of order book is growing Whether it’s the PSU or a private, whoever is able to deliver, they will have a better edge in the market. Obviously PSUs will continue to have a better edge in the market because they are a modi.
Baddam Karunakar Reddy
One more thing I want to add here. Recently, like last three, four years, as per the government policy, everybody wants to have one public sector unit, one private unit like that. Many of the programs, PC, DCPP case, no like they’re considered one public sector unit, one private unit like that.
Sunil Shah
Right sir. So appreciate that. The opportunity landscape is so huge then in that context, would capacity or technological tie ups or technological knowledge be a hindrance to, you know, really make this cap, you know, opportunity into numbers. Would technology or capacity be a hindrance or. That is too much.
Addepalli Krishna Sai Kumar
It is not specifically like see one is that you need to have a technology. The technology has to be, you know, proven on ground. Then once it’s proven and gone, when there are members, you need to build up a capacity both improvised in the financial wise. Okay, so these are all, you know, hand in hand. They have to go hand in glove.
Sunil Shah
Okay, yeah. Thank you so much and all the best.
Baddam Karunakar Reddy
Thank you.
Unidentified Speaker
Thank you. The next question is from the line of Kishan Bung, an investor. Please go ahead.
Addepalli Krishna Sai Kumar
Good Morning, sir. Morning Mr. Kishan.
Unidentified Speaker
Yeah, most of the questions have been answered. I just wanted to understand the order. Execution for the coming years.
Addepalli Krishna Sai Kumar
That’s a very broad question. Actually, can we take offline? Sure. Thank you.
operator
Thank you. The next question is from the line of KS Subramaniam and investor. Please go ahead.
KS Subramanya
Okay, so once more I would like to ask one, one simple question which is that is there any possibility of the company going into a manufacture of drones? That is one of the questions. And the offline thing which you are saying that contact offline, if you have any questions, can you please elaborate a little bit on that for individual investors. Like me.
Baddam Karunakar Reddy
Like you’re going to reply.
Addepalli Krishna Sai Kumar
But I missed the question, sir. I missed the question somehow.
KS Subramanya
Okay, I’ll. Hello. Yes, surely, surely the thing is that is there any opportunity of the company going into drone manufacture in the future or maybe in the near future, you know, distant future? That is my first question. And second thing is regarding contacting you offline and stuff like that for individual investors like me. Can you please elaborate a little bit how we can contact the company and you know, to get some information or something like that.
Addepalli Krishna Sai Kumar
Thank you. Investor relation, email ID and mobile number are published in the it. That number is only for purpose of WhatsApp. Okay, you can just put A message, you know, you want any specific call to be taken. You know, we can, you know, the investor relation team will arrange a zoom call or something like that. Okay, that’s point number one. Or if you have any queries, you can send an email ID regarding drones. Yes, we are developing certain delivery cargo drones. It’s an offing actually. And we have already, you know, given a, you know, glimpse of it during the recent Aero India show.
And the final model also, you know, we will release once our internal trials are complete.
KS Subramanya
Okay, and so any defense drones for the defense sector? Anything that you are trying to develop or thinking about defense.
KS Subramanya
We are not talking about commercial defense. Oh, okay. Okay, okay, okay, okay. Thank you, sir.
Baddam Karunakar Reddy
Thank you.
operator
Thank you. A retail investor. Please go ahead.
Unidentified Speaker
Hello. Thank you. So my question is regarding DRDs transfer of technology. So you mentioned that you, Apollo and DDL were the DPP for migm. But I can see that on DRDS website the MIGM technology is available for other companies through the top process. So I just wanted to understand, like I was under the impression that BCPP partners have sole access to the technology. So. No, no, no.
Addepalli Krishna Sai Kumar
Where did you see? Where did you see?
Unidentified Speaker
So that I was under the impression, I don’t know, I don’t exactly remember where I saw that. But logically speaking, your company which invests in R D and spends a lot of time on it, and after the completion of the project, if did you award VTP to other companies also then I mean, that’s a bit unfair, isn’t it?
Unidentified Speaker
No, but I think, you know, that’s a question. That’s a question we are addressing internally with drdo. I think in the investor forum we are not able to, you know, you know, talk about it and it will be unfair on our part to talk. It’s an, it’s an issue which is being addressed by drdo. Okay, that’s point one. But you know, when you were asking, you were asking the question differently actually about you saw something on BDL website or something like that.
Unidentified Speaker
Also on DRD website there are a list of technology transports. If you just Google migm, drdo tot, you will get a link on the DRDO website and there drdo mentioned that companies can send better to nscli.
Addepalli Krishna Sai Kumar
What happens? Anything, whatever government does, you know, it puts, it puts on a website actually. Okay, but there are licenses that are fixed to it. There are only two license, only two people developed it. Okay. There is no such, you know, larger quantities like you know, thousands of ten thousands of numbers, you know, production that is required which mandates it for multiple partners. You know, I think you know. Please be rest assured there are only presently two partners who have developed into partners are ready to enjoy the business. You know, it’s a long way to go.
Okay, one more thing.
Baddam Karunakar Reddy
Is different MAGM case no Spectrum design. Actually we have complete development. We have done actually. So we are the only people holding the technology like Apollo MAX System and bdn. There are other cases like DRDO is developing their complete design and all. Whereas other industries also participating in subsystems and all that technology they can give it to a number of people. But Amazem case is something different. Actually all the technology developed by these two two companies only Apollo Max System and bdn.
Unidentified Speaker
Okay sir, understood. Thank you so much.
operator
Thank you. The next question is from the line of Asok Shah from Egg. Please go ahead.
Unidentified Speaker
Thanks for taking my question. Sir. We are taking a technology from the drdo. So do they charge any royalty or are there any condition that after a few years they will be charging some royalty because all the research are done by them and we absorb the research and technical details also See here.
Baddam Karunakar Reddy
It is like this. If already DRDO developer technology anybody is looking for T o T then they are charging. But our role if you see most of the cases we are the people based on Dado specifications. We are doing development in our many of the cases we have are not paying any royalty. But other things other cases like drdo if is available technology there somebody wants to take the. In that case we have to pay the royalty.
Unidentified Speaker
Sir licensing fee.
Baddam Karunakar Reddy
We are not going to pay any royalty.
Unidentified Speaker
Okay. And secondly sir, we have raised the fund. So does the fund has been utilized fully or it will take time still to utilize fully because the construction and project starting it takes time.
Addepalli Krishna Sai Kumar
We have received only 50% of the amount mobilized slowly we are utilizing for the purpose what is mentioned in the objects of the issue.
Unidentified Speaker
So by what time it will be utilized? Also because investor if you demand they will be paying partly paid upstair one fully paid upstairs or something like this.
Baddam Karunakar Reddy
Whatever we have already issued is fully paid up share plus warrants 50% of the warrants out of the warrants amount of 400 plus crores 100 crores. We have received another 325 crores we are able to receive within this next four months.
Unidentified Speaker
So all the fund around 400 crore will be utilized for the Capex or it will be for the working capital.
Baddam Karunakar Reddy
Also it will not be for capex. It is only for working capital requirement.
Unidentified Speaker
So generally.
Baddam Karunakar Reddy
For that A lot of working capital requirement will be there. It will be placed for working capital, most of it.
Unidentified Speaker
Okay sir, last question from my side sir, from the start of the raw material purchase and completing the our whatever the production we do and then we do the billing. So what is that time? So because of whatever order we have to purchase the raw material and we have to execute order three months, six months and then we have to prepare the bill.
Addepalli Krishna Sai Kumar
I got your question. It depends on the type of the system. We are not a product company. There are different types of systems so that we develop a different type of programs for different verticals. Maybe for a missile application, underwater application. But broadly for your understanding, it ranges anywhere between 4, 5 months up to 14 to 15 months like that depending upon the type of the project. As and when you are, whenever you are in Hyderabad, you can come to our office. We’ll explain you how the process would be by prior taking a time from the investor relations team.
He will tell you how the process and all will be there.
Unidentified Speaker
Okay, answer last question. So it’s an important question sir. If the GREC receives the fund when the order is received ERAC so do we receive any fund for the 10%.
Addepalli Krishna Sai Kumar
Public sector companies, they are government in nature, sir, you know that is totally different. We are a private company. No private company will get any advancement. But in case whenever orders are received directly from the services like maybe from Army Air Force or maybe we are likely to get some advanced payments as and when there is something like that. We’ll keep you posted. But most of the programs that we are presently doing are with the DRDO and Defense PSUs and other private customers and there are no advanced payments currently that we are.
Unidentified Speaker
Thank you sir. Thanks for best wishes to you. Thank you sir.
operator
Thanks. The next question is from the line of Shreyansh Gatani from HD Security. Please go ahead.
Unidentified Speaker
Thanks for the follow up, sir. So my question was on the RF business that you’re looking to build. So trying to understand like what kind of revenues are we looking at on that front and looking at some acquisitions in that space. If you could give some progress, give some updates on that side of the business. Right?
Addepalli Krishna Sai Kumar
Yeah. Rf you. We have started building up our own RF capabilities and we were also contemplating for an acquisition of our company. But in the process, you know we have, we got this ideal acquisition. We first want to consolidate our position in terms of completing this transaction. Then you know, further expansion on that particular area. You know, as and when we move forward, you know we will keep you posted. But yes we are going to go strong on rf. There are some sensitive technologies in RF that we will be developing, starting to develop right from this financial year.
What exactly we will be developing and all I will not be able to divulge at this point of time. But you can keep us in track. You know, we’ll keep posted to all the investors, you know, as in when things are progressing.
Unidentified Speaker
Got it. At this point we don’t have RF contributing much to our.
operator
Sorry to interrupt you sir. You to join the question queue for further questions. Thank you. The next question is from the line of Vinod Bangera from Carwin Capital. Please go ahead.
Unidentified Speaker
Yeah, thanks for taking my call and congratulations for a good set of number saif. What is the revenue break between and what are. What is it likely to be in SI27 given the the order book inflow is expected to increase going forward.
Addepalli Krishna Sai Kumar
Din we have never given such breakup but you can clearly estimate that, you know there is a little improvement in the production percentage in this quarter. That’s why the margins have got improved. So you have to actually make estimates like that. Yeah.
operator
Thank you ladies and gentlemen. We will take that as the last question. I now hand the conference over to management for closing comments.
Addepalli Krishna Sai Kumar
Thank you so much. Yeah, yeah, yeah. Thank you so much. We extend our sincere gratitude to the Ministry of Defense and the Government of India for their continued trust in the Indian Defense manufacturing ecosystem in which Apollo microsystem plays a vital role for all the indigenous WEPAN programs. The confidence reflected through substantial investments is a strong endorsement of our nation’s industrial capabilities and innovation potential which we have already seen through opsandur recently. We remain steadfast on our commitment in delivering advanced solutions that bolster operational readiness and strengthen national security. It is an honor to serve the nation and we stand fully prepared to support our armed forces under all circumstances.
I extend my heartfelt thanks to all our esteemed investors and analysts for being with us today. Your continued trust and partnership mean the world to us. Your participation and feedback are invaluable to us. We remain committed to enhancing our performance and driving sustainable growth. We look forward to welcoming you to our facilities where you will have the opportunity to observe our operations and initiatives at the ground level. Should you have any further questions or wish to share your thoughts, please do not hesitate to contact our investor relations team or write to us at Investors Dot Relations at the rate Apollo-micro.com thank you once again for your time and tough.
We look forward to reconnecting with you during our Q2 update. Wishing you all a great day ahead. Jai Hind. Jai Bharat. Thank you ICCA for facilitating this. And on behalf of the company, joined by me, Our Managing Director, Mr. Karnak Reddy, our CFO, Mrs. Darshan and all our security team, thank I say for facilitating this wonderful conference. Thank you.
operator
Thank you.
Baddam Karunakar Reddy
Thank you.
Unidentified Speaker
1 Madam, I’m Seshadri here from Secretarial Dane. Hello.
operator
Yes, sir. You’re audible. You can see.
Unidentified Speaker
Yeah, yeah. Ma’, am, if you could send us this link what you call the recording link because we need to upload it to the stock exchanges. So as early as possible, if you could just send us a link of this audio call. Recording of the audio.
operator
Sure. We’ll check with the team and let you know. Okay.
Unidentified Speaker
Yeah. Yeah. We’ll be waiting for that same. We’ll be waiting for the same.
operator
Thank you.
Unidentified Speaker
Thank you.
operator
Thank you. Ladies and gentlemen, on behalf of ICICI securities limited and Apollo Microsystems. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.