Apollo Micro Systems Ltd (NSE: APOLLO) Q3 2025 Earnings Call dated Feb. 08, 2025
Corporate Participants:
Addepalli Krishna Sai Kumar — Whole-time Director-Operations
Analysts:
Santosh Yellapu — Analyst
Unidentified Participant
Ankush Agrawal — Analyst
Rupesh Tatiya — Analyst
Alisha Mahawla — Analyst
Nikhil Chandak — Analyst
CA Garvit Goyal — Analyst
Aman Vij — Analyst
Prathamesh Dhiwar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Apollo Microsystems Q3 FY25 Earnings Conference Call hosted by Anandrati Shares and Stock Brokers Limited. As a reminder, all participant lines will be in the lesson 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 Mr. Santosh Yellapu from Anandrati Shares and Stock Brokers Limited. Thank you. And over to you, sir. Santosa, your audio is not clear. It is breaking.
Santosh Yellapu — Analyst
Is it So, Good morning ladies and gentlemen. Welcome to Apollo Microsystems Q3FY24 earnings call hosted by Anandrati Shares and Stock Brokers Ltd. We have with us today Adepalli Krishna Sai Kumar, Director Operations, Praveen Rakhiya Madam, the Company Secretary and Tanya Madam from the IR team. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company. As in the date of this call, the statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand over the conference to the management Sai sir for. Of Apollo Microsystems. Thank you. And over to you, sir.
Addepalli Krishna Sai Kumar — Whole-time Director-Operations
Thank you so much. Santosh. Good morning everyone. Thank you all for joining us today on this weekend. It’s always a pleasure to connect with our investors and share insights into our performance strategy and outlook. I’m pleased to report that Apollo Microsystems has delivered another strong quarter demonstrating consistent execution, operational discipline and increasing our market share in indigenous DRDO programs. Thus delivering our commitment towards make in India for past 40 years.
To make a line, I would also like to specifically mention that on this January 30th we have completed 40 years of our relentless effort in contributing to indigenous defense programs. Let me first take you through our consolidated performance for the nine months and third quarter ended December 31, 2024. Nine month FY25 versus nine months FY24. For nine months FY25 revenue from operations has increased by 69.5% from 2362 million in nine months FY24 to rupees 4003 million in nine months FY25 demonstrating sustained momentum in our core business operations in line to the guidance that we have been giving for the last few quarters.
For nine months FY25 EBITDA increased by 69.1% to rupees 932.2 million as compared to rupees 551.2 million in Q3 FY24 while EBITDA margin remains stable at 23.3% demonstrating our commitment to to operational efficiency and profitability. The 9 month FY25 PAT increased by 133.2% amounting to 424 million as compared to 181.8 million in 9 months FY24. With pat margin improving by 290 basis points to reach 10.6% in nine months. FY25 now let’s have a look on the Q3FY24 versus Q3FY25 versus Q3FY24. In Q3FY25 our revenue saw a significant increase of 62.5% reaching 1,483.9 million compared to 913.4 million rupees in Q3FY24. This growth was driven by successful execution of our order book reflecting strong demand and operational excellence. Our EBITDA also showed remarkable growth rising by 58.1% to rupees 379.6 million in Q3FY25 while the EBITDA margin remains stable with a minor decrease of 70 basis points as compared to Q3FY24 and stood at 25.6% in Q3FY25. Additionally, our pad for Q3FY25amounted to rupees 182.4 million, a substantial increase of 83.1% from 99.6 million in Q3FY24. The part margin improved by 140 basis points to reach 12.3% in Q3FY25. I also would like to specifically mention that this is the Highest ever recorded Q3 performance in the history of Apollo. Now let’s move on to investment in capacity expansion and strategic triumphs that we have made recently. As we have been informing you that we have commenced our expansion plans few years back and our unit two facility was getting ready. Now presently the unit two facility is ready and we have performed puja for taking position as this is the Q4 quarter, shifting teams would disturb execution in crucial fourth quarter and this operation will commence from Q1FY26 actively. Although some composite productions already started here. In case of the unit 3 which is a 3 50,000 sq ft facility which is constructed in hardware path to Hyderabad very close to Hyderabad International Airport and as a part of our forward integration focus for weapon integration we commence construction of our integrated plants of engineers defense system IPITS which is unit 3 and this is expected to be completed by Q2FY26. I am very happy to share with you that we have recently entered into a consortium agreement. The Radon Systems Private Limited to collaborate on a manufacturing partnership for loitering munitions. We are also pleased to share with you that we have signed an MoU with Garden Breach Shipbuilders and Engineers Limited. It’s a dockyard. Government of India this MoU establishes a business partnership focused on joint research and development, co production and export of underwater weapons and vehicles, underwater mines, underwater communication systems and air defense systems. Some of the display models will be unveiled during the Aero India 2025 which is commencing from tomorrow, day after tomorrow, 10th February and will be up to 14th of February 2025. I would also like to make a special mention that our company consistently invest close to 7 to 8% of our revenues on R D every year in developing new technologies and in augmenting new technologies, existing technologies. Keeping the same momentum, we would like to increase our investments in R D but at the same time developing the product and also qualifying and testing the products, particularly in case of platforms, needs much more investment. It also needs bandwidth and also some bigger umbrella. Keeping that in view and the kind of, you know, new platform development that you would like to undertake in the years to come, we are entering into this R and D partnerships with the different public sector companies. To mention, we already have a joint development MoU with Bharat Dynamics Ltd. Now we are entering. We have entered a joint development MOU with GRSE and such. MOU with many other private as well as government companies will be entered in the future as we have a very very strong foothold in technology development and a strong R and D team with us. By entering such partnerships we will be able to open a much larger testing platforms availability for us in the years to come and also an access to much deeper markets, both domestic as well as international. We are also excited to announce and at the same time invite you all for the upcoming Aero India 2025 in which we are participating, which will. Start from February 10th up to February 25th. So 14th, 2025 in Bangalore. We look forward to connecting with you there. Thank you all for your continuous trust and support bestowed on us. We now look forward to addressing your questions.
Questions and Answers:
Santosh Yellapu
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 withdraw yourself from the question queue, you may Press Star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles.
First question is from the line of Mayank Kapoor, an individual investor. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Santosh Yellapu
Yes, please proceed.
Unidentified Participant
First of all, congratulations on a fantastic set of numbers. Sir, I went through the PPT and there are some very interesting and esteemed set of projects that we have done and we have listed our whole process from ideation to commercial production. I just want to understand and appreciate what is that Apollo Microsystem does. So can you walk us through a whole life cycle of how a project starts and the final delivery?
And there are a bunch of services that we offer, right? Electronic manufacturing services, hardware design services and so on. Can you also tell us that in case every product goes through each of these processes or is there any kind of product which contributes more towards our service?
Addepalli Krishna Sai Kumar
Thank you Mayank for participating. And I would like to clarify you that primarily we are not a product company as such, although we will be rolling our own platform products in the years to come. Many of the technologies that we are developing are specific to specific program of drdo. In many of the cases we undertake development of different LRUs which we call as the line replaceable units, which are subsystems on board a weapon or onboard a vessel.
Like you know, maybe a ship or a submarine. Okay. Or maybe on a torpedo or a ground launcher system. So. So we undertake development of a specific system for that program. We develop that system specifically for that program. We also participate during the testing and trials of the program. And once the program gets into production phase, we support in producing that in numbers to whoever may be the product. Agency in producing that weapon or a vessel or a platform. So earlier only companies like Bharat Dynamics limited used to have a mandate for producing the weapons. But nowadays Government of India Ministry of Defense is encouraging a lot of private players. That’s how the big players, you know, deep pocket players like Adani economic exclusives. These companies were given an opportunity. They are taking a TOT for production from DRDO and they come back to, you know, suppliers who have got qualified and who are an approved part of the supply chain for that program. So this is how it is. So whatever we have mentioned that, you know, we do a hardware design service, software design services. This is apart from the product development or technology development that we do specifically for the programs. Okay. Any specific design services that we have had to offer for any specific customer who comes with, you know, a request, you know, we, we would be doing that. So EMS is not, I meant to say doesn’t generate a lot of business for us to start with. We develop the systems and we produce it by ourselves. But we also support some other, you know.
Santosh Yellapu
Sorry to interrupt so your voice is break it.
Addepalli Krishna Sai Kumar
We also support some other customers in producing their system as part of our EMS services. But it is not a major business for us. But yes, we do product development right from ideation which is right from the concept up to a final product qualification and testing. And we also offer services like a build to print services which is the EMS service or hardware and software design services.
Unidentified Participant
Got it? Got it sir. Thanks for the detailed answer. Sir. Next question that I have is that given that the, you know, we have an order book of 500 to 550 crores, can you tell us the distribution by the services that we offer or the defense areas that we are targeting?
Addepalli Krishna Sai Kumar
No, there are, there’s no breakup that we are giving at this point of time. We are restricted to share certain information. So I will not be able to give you a breakup at this point of time. But services, you know, doesn’t contribute much, which I already told you most of these are, you know, what do you call system development programs over which this entire thing is fit. But broadly I can tell you that majority of the business comes from the methyl defense as well as from the nano defense areas.
Unidentified Participant
And is that the same area that we are targeting to increase our order book substantially? I saw one interview where the management had said that our current order book is 500 to 550 crore and by December 25 we want to take it up to 20.
Unidentified Participant
500 crores minimum. So is that the area that we are targeting for that
Addepalli Krishna Sai Kumar
Naval defense is one area where we have developed the complete platforms like a complete underwater mines we have developed and you know where we are expecting a large ticket projects. So naval defense will continue to, you know, dominate for to certain extent for next one, one and a half year in the increased order book.
But at the same time missile defense programs also, one after the other, you know, the programs are getting matured. Recently you might have observed that you know Ministry of Defense has placed orders for Pinaka weapons. So we also have some, you know contribution in that as well. So missile defense is also going to anchor the overall, you know, increase in the order book over a period of time.
Unidentified Participant
Got it. And last question from my end, sir. So the FY26 guidance that we have given is 100% internal target. But it’s more of like a 50% target. I just want to understand if you can give us any margin guidance whether it be EBITDA guidance or PAC guidance.
Addepalli Krishna Sai Kumar
No, I have never given an EBITDA or a PAD guidance. Earlier also the revenue point of view, we have earlier informed that we have an internal target to double our revenues. But as a guidance point of view, you know, 45 to 50% is something that, you know we will continue to increase our revenue by 45 to 50% is. That’s the only guidance that I can give you at this point of time.
Unidentified Participant
Got it. That, that helps it. Thank you. Those are all my questions. Thank you.
Operator
Thank you. Next question is from the line of Ankush Agarwal from Search Capital. Please go ahead.
Ankush Agrawal
Hi sir. Thank you for taking my question. So the first question is around the new order wins. So I mean in the recent interviews you have been stating that you expect a couple of thousand crores of new order wins for you. You sort of also mentioned that some of your customers have also already received these orders and you are just waiting for them to pass on the component part to you. So could you give some sense on what kind of visibility we have on receiving these kind of, you know, more than thousand crores kind of orders that you’re talking about?
Addepalli Krishna Sai Kumar
No, there are two different aspects of it. One is an order we are expecting from Indian Navy very shortly. That’s a direct order from Indian Navy to us. Apart from that there are certain orders which we are already executing as a sample orders. But a complete large order is existing with our customers generally being a Tire 2 and a Tier 3 supplier. Customers doesn’t place a direct completely full quantity order to us on a full throttle basis because we will end up producing very fast. But they as a complete system integration, you know, it will take a lot of time for them. So that was the, you know, perspective in which, you know, I might have told you and I also want to clarify now. But yes, we have presently an very robust order book. At the same time, the orders that my customers are already having, which are egg to flow to me are also very strong. And some very large ticket projects are expected from Indian Navy.
Ankush Agrawal
The second question was if I look at some of our listed peers on the production side, they make as high as 35, 40% EBITDA margin. We currently are at about 20% EBITDA margin and also mentioned that once the share of our production that we we expect increase in EBITDA margins. So going ahead with this kind of order that you’re looking at, do you believe that our margins could scale up to the 30, 40% EBITDA going ahead once we see this large production orders coming in?
Addepalli Krishna Sai Kumar
See, on a standalone basis, it depends on the, you know, product mix, you know, where the revenue get booked. Actually different products that we supply will have a different EBITDA margins. So some of them can go as big as 40 to 45%. Some of them can go, you know, lesser than 20% in some cases where there is a product development, initial stage of the product development. But it is whatever figures that you are seeing, these are the complete revenue figures, you know, averaging of that, you know, each, you know, product mix that is contributing to the revenues.
So the peak of, you know, 26, 27%, whatever is there, that will continue to maintain and it will go up to 30% on a balance sheet basis for next month, one, one and a half year, going to 40, 45%. It will take some more time, but it is possible, right in the kind of order that you. Yes, see, majority of the projects that we are executing today, they’re all development projects. Either the system which I am supplying is in a development phase or the program is in the development phase. But as my revenue overall in the revenue mix, once the production order sizes goes up, then that is the one which is going to anchor the EBITDA margin levels, which will increase the EBITDA margin levels. But it is not something that by 10, 15% it is going to grow within one month. Financially, something like that. It will take a little more time, you know, for things to get into production. Our new facility is also getting ready. New opportunities are coming actually. So we would be happy to share as and when the event happens. But at this point of time I think anywhere between 26 to 25 to 30% is a very decent EBITDA margin for our size of balance sheet.
Ankush Agrawal
Got it. So sir, will it be possible for you to share what is the current mix between production orders and development orders? I’m assuming majority will be developed
Addepalli Krishna Sai Kumar
Broadly. You know in terms of percentage I can say 75, 25, 70, 30 like that.
Ankush Agrawal
In favor of development, right?
Addepalli Krishna Sai Kumar
Yeah. Development come and production percentage.
Ankush Agrawal
Okay, so the last question is. So you sort of indicated the areas wherein you want to invest the funds that you have raised. So would, would these partnerships require you to immediately invest this kind of large sum or in like this will play out in a couple of years while the program develops. I’m trying to understand why we have raised so much of money about 800 crores up front. Like is there an opportunity wherein we will have to invest this kind of sum immediately? Or like what’s the thought process behind raising it immediately?
Addepalli Krishna Sai Kumar
You meant to say expansion of our unit three. Are you talking about that?
Ankush Agrawal
No, you, you indicated that you want to enter into partnerships with this private firms and government firms to do joint production and development and that would require you to expand your R and D budget which sort of you indicated is where, why you have raised the 800 crore that you have raised. So just wanted to understand would this partnership require you to invest this kind of money up front or there is some other use that you’re looking at.
Addepalli Krishna Sai Kumar
So you’re talking about the fundraise that we are doing. So we have given a clear breakup of you know what the utilization of the funds. You know where we are going to do actually 550 odd crores will be going for the working capital and 66 crores we will be investing in our subsidiary for some acquisitions and other things like and around 130, 140 odd crores for general corporate purpose and some of the, you know, the balance of the, you know, funds we will be investing in R D.
As I already you know informed you during my, you know opening speech that we are, we have entered MoU with GRSE and other companies and few more other companies we are likely to enter shortly. Negotiations are going on as and when the event happens. We will keep you posted. Next year probably we may be investing. Close to 100 crores on R D in new product development actually. So this is broadly the breakup in which you know the fund utilization will be there but disclosure is already given in the to the exchanges.
Ankush Agrawal
Thank you.
Operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow up questions, please rejoin the queue. Next question is from the line of Rupesh Pratya from Intelsense Capital. Please go ahead.
Rupesh Tatiya
Hello sir, I’m audible.
Operator
Yes, please proceed.
Rupesh Tatiya
Yeah, thank you for the opportunity. Sir, my question is on your presentation there is a slide, slide number 10 where you have listed all these missile program, right? It looks like we’re part of all the missile programs. But it. I don’t know what is the component that we supply? Do we supply some electronics component in that or some mechanical systems in that? What do we supply to these missile programs that you have listed on slide number 10?
Addepalli Krishna Sai Kumar
So I will tell you like this sir, except for the Brahmos missile, okay? There we have very, very insignificant contribution. Very little rather I would say there is no indigenous missile program of DRDO where we have, we do not have a participation. So that’s, that’s a very unique positioning that we have in terms of the market share for the indigenous mission programs. That’s point number one.
Point number two. To specifically answer to your question, we have over a period of last 40 years developed an expertise and individual groups are formed to handle different type of technologies for the system which form part of a weapon. Right from the explosive area where we are not into explosives but the detonation of the explosive, you know like safety arming mechanism.
Next comes the seeker section where the signal processing portion we are doing and various onboard computer instrumentation systems, navigation systems, telemetry systems, data link systems, actuation systems like this. Different onboard electronic and electromechanical systems are form part of a weapon. Actually all these technologies we have developed expertise.
Our systems are part of all these programs. We are not purely into mechanical machining and engineering. We do have a CNC and tool room in house for our captive requirement and for our own, you know, making. But. We don’t do heavy engineering, mechanical items, you know, for the these programs. This is answer to your question.
Rupesh Tatiya
So just a small follow up to that. Sir, are you like a single source supplier for whatever components you have developed for these missiles?
Addepalli Krishna Sai Kumar
No. See normally what happens most of the programs we undergo on a tendering basis. Either a limited tender or an open tender depending upon the type of the, you know, technology. They reach back to the mature players or maybe sometimes. And for an L1 requirement, four or five, you know, minimum participants will have to be there so they qualify and they give opportunity to them and all that.
So once we become an L1 we have to qualify the product. Once we qualify the product, we become a proprietary partner for that. So in case the program size is very, very large which is getting produced in tens and tens of thousands of members, sometimes, you know, the BRDO will encourage more number of players, you know, to be a participant because they cannot rely on one single source.
But many of the programs that we are participating, we are not participating in a C level, you know, kind of, you know, technologies. We are participating in most significant technology which is forming part of the weapon. And we enjoy the proprietoriness in that. As and when the product gets qualified, this is how the supply chain goes in the programs.
Rupesh Tatiya
So, so I mean what kind of market share do you anticipate? That is one. And then my second question sir is on the Pinaka missile, right? Not guided Pinaka. I think guided Pinaka. There is still some time for the large tender. But the this whatever 10,000 crore Pinaka tender has come. What are the components that we supply in that tender? So these are my two questions or small questions here.
Addepalli Krishna Sai Kumar
Unguided Pinaka, we do not have a contribution. Guided Pinaka, we have a contribution.
Rupesh Tatiya
So, so this tender is for unguided Pinaka, right?
Addepalli Krishna Sai Kumar
Yes.
Rupesh Tatiya
Okay. Okay. And. And sir, what kind of market share you expect for in, in the missile programs? And you are, you are at least.
Addepalli Krishna Sai Kumar
See ascertaining market share. A certain market share is very difficult until the programs gets into production phase. Okay. So at this point of time I can only tell you that every, every weapon program we have a contribution. Wherever there is electronics requirement is there, you know, there we have a contribution. Every missile program and all indigenous torpedo programs we have contribution.
The indigenous nuclear submarine programs, we have a contribution. We are the only company in India have developed, you know, all varieties of underwater mines. Okay? We have contribution expendability. Programs, underwater swarm, drones. So variety of, you know, such programs. You know, we have developed technologies and we’ve contributed. Ascertaining the size of the market share can only happen once these programs get into a production phase, actually.
Rupesh Tatiya
Okay. Okay, sir. And then just the final question, sir. What would be the range of contribution per missile is 1 crore to 5 crore, a fair number or is that like too large?
Addepalli Krishna Sai Kumar
As small as, you know, 1 lakh to 5 and half to 6 crores.
Rupesh Tatiya
Okay. Okay, sir. Thank you. Thank. I have more questions. I’ll come back in the kit. Thank you.
Addepalli Krishna Sai Kumar
Yeah.
Operator
Thank you. Next question is from the line of Alicia Mahabla from Envision Capital. Please go ahead.
Alisha Mahawla
Hi, sir. Good morning. I hope I’m audible. So first we just wanted to understand this consortium agreement with Vedon that we have recently entered into. If you could give us some details of the platform. Looks like the development is done by them. What is the. Is it expected to go into production soon? How large will it be? What kind of competition? Do you think you could share some color on it?
Addepalli Krishna Sai Kumar
No, I will not be able to quantify because we are going to jointly bid for some programs and jointly manufacture these systems actually. So it’s in a very beginning stage. But Radon has already developed the loitering munition. They have done some testing. They have already given some trials to Indian armed forces. They have joined hands with us, keeping in view of our existing experience in manufacturing weapon systems and the scale of operations that we are going to have in few months to come and the financial bandwidth that we have, they all, they, they have certain strengths. We have certain strengths.
Now the entire defense ecosystem is getting into an era of, you know, doing things on a consortium basis where they will be able to catapult on, you know, leveraging on each. Each of their sims, actually. So as a part of that, you know, we have come together in addressing this for the upcoming, you know, programs actually will be doing a joint bidding. This is what I can comment to this extent only on this relationship.
Alisha Mahawla
But this is not in any advanced stage where maybe we can expect orders next. You said that these are still very early stages.
Addepalli Krishna Sai Kumar
See, advanced to early stage, you know, has a very thin line actually. Okay. Currently we are about to bid for some programs and it’s a matter of a month or two for them to get final. If it gets in favor of this, this partnership, I think then then it’s an order for the companies.
Alisha Mahawla
No, and just a clarification. The products that they have developed, are these approved by Indian army? Do they have the.
Addepalli Krishna Sai Kumar
Not like that. You know, see in case of the, you know, in case of the direct armed forces the thing. There is nothing like an approval from the army and all It’s. It is not like that actually. Okay, so there is a process with which you know, they do a shortlisting, then they are. Then they take up trials and testing of a few numbers and then you know they will give a go ahead for production.
Every armed forces have a different mode of this thing. But presently Radon has some mature systems available with them and you know, which are, which can get qualified for the programs that we are attempting jointly.
Alisha Mahawla
Understood. And the underwater mine order can be expected before March or is it looking like there could be some delay until into next year?
Addepalli Krishna Sai Kumar
I am not sure if I can comment on that. It’s a process going on inside the Indian Navy. I have to restrict, you know, the timing, tell you the timing of it a s of now. But we were expecting it before March itself. But as the weeks envelop, you know, we will get to know more information on that.
Alisha Mahawla
Oh great. Thank you.
Operator
Thank you. Next question is from the line of Nikhil Chandak from JM Financial family office. Please go ahead.
Nikhil Chandak
Yeah, hi. Thanks. So you know one question and I may have missed this in the opening remarks now you said that almost 500, 550 crores you will be using it for working capital out of the new fundraise. And what I see is that say the annual revenue is currently in the range of 500 crores. So such a large amount of capital which will go into, you know, working capital going forward from the fundraise.
So just trying to understand what kind of growth rates are you expecting for the company say over the next two, three years. So at least as a business plan, if you have to see where does this find it crore approx. Online. I mean annual revenue kind of move to say in the next two, three years based on the visibility which you have. And I’m presuming because of that you need this high amount of working capital investment.
Addepalli Krishna Sai Kumar
Yeah, see I would like to clarify like this. Firstly we are in working capital intensive industry. Point 1. Point 2 the. It is not that the you know, funds get churned multiple times in a year. In my industry actually the existing lead times of certain. Raw material are as small as a couple of weeks to as big as two years, actually. Okay. So we will have to, you know, invest ahead if we have to keep up with the production lines. That’s the reason, you know, we have started raising funds so that we will be able to, you know, address the addressable market on time and give it the deliveries. That’s another point. Third point is that we have kept the targets of doubling our revenues for next financial year. But as a guidance, we are only giving that we will be able to achieve minimum 45 to 50% growth for the next financial year. And this is something that we will be growing continuously. And the size of the order book will also grow multiple times in next one year down the line. So keeping all that in view, we will have to gear up in sourcing the raw materials on time and making a delivery. There are certain items which go for an export control approval from the respective Department of Defense of respective countries, which by itself is taking nowadays three to four months owing to multiple, you know, you know, wars happening in the different parts of the world actually. So all these is actually getting delayed. You know, that there’s a trade war happening, there is a semiconductor war happening, there is an actual war happening. But the flow, there is no embargo of, you know, selling the goods to India. That’s one good, you know, sign of relief for India as a country. But, you know, but there’s definitely, there is a lot of delay. So the delay should not delay the program as such. We have to, you know, make a, at least just in time kind of a delivery, you know, commitments that for us to give to the customers. We have sourced this funds and the funds will be used for the, for the purpose of, you know, sourcing it ahead so that we are able to, you know, do the production seamlessly.
Nikhil Chandak
Understood. So you’re saying we could, you know, reasonably grow, say 40, 50% for the, for the near term based on the visibility which you, which you have at this point of time.
Addepalli Krishna Sai Kumar
Yeah, that’s the guidance that we have been giving the last few quarters. And I stand by that guidance.
Nikhil Chandak
Understood. Perfect. Great. Thank you so much. I’ll come back in the day. Thank you.
Addepalli Krishna Sai Kumar
Thank you.
Operator
Thank you. Next question is from the line of Ca Garvid Goel from Envis Analyst. Please go ahead.
CA Garvit Goyal
Hi, good morning. Am I audible?
Operator
Yes, you are.
CA Garvit Goyal
For a decent set of numbers, sir. Firstly, on the this year guidance, you have been guiding for almost 45 to 50% kind of growth. Even if I take the 45% growth you should reach 4. 540cr. Right. And in first nine months I think we are at 400cr. And even if we replicate this quarter number in Q4, we will easily achieve the guidance. But looking at your historical numbers, Q4 is I think significantly different from all other 3/4 in the terms of size of revenue. So would you like to revise the guidance for this year, sir?
Addepalli Krishna Sai Kumar
No.
CA Garvit Goyal
Like we will be having a similar kind of quarter for Q4, right?
Addepalli Krishna Sai Kumar
Yeah, generally. And Q4 is always an anchoring quarter. Okay. And I don’t think I, I feel any necessity that, you know, I need to make a revision to my, you know, guidance actually. So Q4 is always an anchoring quarter for the entire financial year. I don’t think, you know, any change in my outlook is required actually. So my, if I see the quarterly, you know, this thing in of the Q4 March 2024, it’s 135 crores.
CA Garvit Goyal
Oh yeah, I see that. That’s what I was asking for. The better there is any upward revision going to be for this year. That’s fine. Secondly, on the pledge percentage, so this pledge percentage is increasing. So can you put some color on what is the rationale behind it, sir?
Addepalli Krishna Sai Kumar
What percentage?
CA Garvit Goyal
Pledge percentage? Promoter pledge percentage is very high for our company.
Addepalli Krishna Sai Kumar
Promoter has pledged shares, you know, to, you know, because he was sourc funds to subscribe to the warrants. You know we have gone gone for the preferential around a year and a half back then once again now we are going for preferential, you know to in order to subscribe it. You know, he has gone nothing for the any personal reasons.
CA Garvit Goyal
Got it sir. And lastly on the naval orders that you are saying we will be expecting it maybe this year itself. Is it like the internal revenue target that you are having 100 kind of growth in FY25 that is based on this order. Like is it come if it is, it comes in the near term we will be able to execute in about 20 and if it comes later on, I think 45% guidance. Is it, is it going to work that way, sir?
Addepalli Krishna Sai Kumar
Partially. You can take it like that. Not fully if it comes, you know, at least even in the Q1. So I will have some revenues booked at least by Q3 or Q4 of Next Financial year. Okay. Because once the order comes it will take six months for us to. Know, create the documentation, take certain approvals and other Things like so Q3, Q4, some revenues will start flowing and for the next after financial year it will definitely continue to have. But we are also expecting some more orders. As I told earlier also there the. There is an existing order book with my customers. We foresee that, you know they would like to expedite their production, you know overall production requirements and enhance their production capabilities also for the next financial year. If that event happens also that will also contribute for me in, you know, achieving my internal targets. But irrespective of that, my 45% growth, whatever guidance we have been giving that we will achieve for sure.
CA Garvit Goyal
Got it sir. And one more thing on the margin side you. You mentioned like 25% to 30% kind of EBITDA margin. I think this must be supported by the kind of mix we are going to ACHIE in the production contract. So is it like from the quarter onwards we can expect slightly slight improvement in our EBITDA margins going ahead?
Addepalli Krishna Sai Kumar
I will not be able to comment on that.
CA Garvit Goyal
Okay sir, that’s. That’s fine sir. All the best for the future, sir.
Addepalli Krishna Sai Kumar
Thank you.
Operator
Thank you. Next question is from the line of Aman which from astute investment managers. Please go ahead.
Aman Vij
Yes, my first question is when you talk about our missile contribution ranges from couple of lakhs to few crores. So if you can talk about some of the programs which is coming online in next 12 years where our contribution is high and their volumes is also expected high. Basically this will move the needle for the company.
Addepalli Krishna Sai Kumar
Sir, unless the program is getting into production, I am restricted not to talk about it actually. But most of the things nowadays are in the public domain actually. So there are certain, you know, you know I mean to say news articles coming from directly from defense. How you know the tear up is going to happen and all. Like for example the current Pinaka program.
It was expected of that it would come but we have not expected that it would come this month itself. Actually we are expecting by March end or so. So government is taking their own call. But broadly to talk to tell you, you know the. The artillery and bomb programs are the ones which are going to have a very large quantity in the years to come. So those are the programs which will have big numbers coming apart from the other programs like the Naval torpedo programs like the VAs, the electrial headwind Torpedo. These are the programs which will also getting into production areas. NAG is something also which will getting which will go into a good sizable production. But there are certain other areas like the ballistic missile programs and other things like you know, there’s a continuous production continuously happening for that and you know, I will not be able to comment that. The ATGMs are the ones which you can keep a track on that nag, Helena and imp, ATGM and Amoga too, these are the ones which will also get into large numbers in the years to come.
Aman Vij
And these programs which you mentioned, NAG and Amoga 2 and ATGM ZLR contribution is significant. So the total value of whenever it happens can be significant for our company.
Addepalli Krishna Sai Kumar
I don’t want to quantify it sir, as of now because the transcripts are available on the will be available in the public domain. It’s. It will be against the competitive, you know, spirit actually without value.
Aman Vij
Sir, I’m just asking whenever it happens it will be a good chunk for our company. I’m not asking for.
Addepalli Krishna Sai Kumar
Yeah, I want you to understand like this that when the quantities are very high, okay. The overall revenue chain value will always be on a higher side. Okay. If your program is getting into some 10,000 numbers, okay, assuming that you know, every company is Getting it thousand, 1500, 2000 numbers kind of this thing, but at least you know, as small as, you know, 5 lakhs to as big as a crore rupee kind of this thing.
That’s the kind of a potential every company is going to have. The entire ecosystem is going to have such kind of, you know, opportunities coming in depending upon the type of the, you know, product mix that they are supplying. So why I mentioned only these programs are. Because these are the programs which are of highlight which are getting into very large scale production in the years to come.
Aman Vij
Sure sir, my next question is on Torpedo side. So last set of orders we supplied I think was for Varunastra and I think we are waiting for this Electric Helicor and also advanced Light Torpedo. So any. And is there any repeat order expected for Varunastra also? And if not then when do we expect the big orders coming from Electric Heavyweight hospital? Do we expect it in first half of this calendar year or second half of second this calendar year?
Addepalli Krishna Sai Kumar
Varunas, the entire weapon is being done by bdl. Sir, actually I’m restricted to comment on that but. You know. Yes, there will be repeat order for master coming shortly.
Aman Vij
What about Electric Heavyweight Torpedo and AL awt?
Addepalli Krishna Sai Kumar
ESWT is a sensitive program, sir. I will not be able to, you know, tell you the timing of that alwt. You know, we’ll start getting some limited series production by Q3 or Q4 of our next financial year.
Aman Vij
Electric Heavyweight.
Addepalli Krishna Sai Kumar
Pardon me?
Aman Vij
Electric Heavyweight or electrical heavyweight or.
Addepalli Krishna Sai Kumar
I told it’s a, it’s a sensitive program. I will not be able to comment about it in the timing of that.
Aman Vij
Okay, no issue final question is.
Addepalli Krishna Sai Kumar
So approvals are all done. The trials are all more or less done actually. So from our end, you know, there is nothing, you know, some paperwork is going on broadly, I think you know, that level understanding is sufficient.
Aman Vij
Okay, sure. Final question I have is on this production and prototyping mixer. So currently it is around 75, 25. So for next year, FY26 and FY27, where do you see this mix going?
Addepalli Krishna Sai Kumar
60, 40.
Aman Vij
60, 40 for FY26 as well.
Addepalli Krishna Sai Kumar
I’m talking about the next year only, not this year. This year is almost over actually.
Aman Vij
And FY27, can it move to 50, 50 kind of number as well?
Addepalli Krishna Sai Kumar
I am, I am unable to give the guidance for FY27 how much the percentage would be. But for FY26 it could be like 60, 40.
Aman Vij
Sure sir, I’ll get back. Thank you.
Operator
Thank you. Next question is from the line of Prathamesh Diwal from Tiger Assets. Please go ahead.
Prathamesh Dhiwar
Yeah, so just two questions on the defense industry side. So first one is like how are we seeing the order inflows in the industry? Are we seeing any delays or what the current situation over there. And my second question is on the payment side. So are we seeing any payment delays from the government?
Addepalli Krishna Sai Kumar
No sir. Most of these programs are DIDO programs. So the fund is already allocated. The there is no dearth of payments. The payments are seamless. Actually there’s no issue. The order flow is going to be much more consistent with many of the programs getting into production and also because of the entry of private industries getting into this. The having their skin in the game, you know, in line with the government expectations, if they are able to speed up the, you know, production capacities and other things, you know, much more consistent orders will be there and much more increase in the order book will be there for the entire ecosystem. Message.
Prathamesh Dhiwar
Okay, sir, got it.
Operator
Thank you. Next question is from the line of Pratik Bagadia, who is an individual investor. Please go ahead.
Unidentified Participant
Yeah, hi sir. Thanks for giving me this opportunity and congratulations on completing 40 years of operations in this industry. My first question is with respect to exports, are we doing any exports? And can you throw some visibility as to how it looks in the next two to three years?
Addepalli Krishna Sai Kumar
Presently, you know, we are talking to few countries, you know, for, you know, we have given our proposals, we expect that, you know, we will be able to back some orders in the next financial year, execution of which may happen maybe next after financial year, about next financial year, whether we’ll be having export or not. I am not sure of the timing.
Unidentified Participant
Okay, I understand. So, and for my second question, I just want to understand as to how typically our order flow looks like in terms of when we get an order. What is the completion time? What is the lead cycle to it? I understand that the multiple orders would have multiple timings, but if you could throw a generic light, on.
Addepalli Krishna Sai Kumar
Average, you can take anywhere between six months to, you know, 12 to 14 months.
Prathamesh Dhiwar
Okay, so typically once we get an order, it takes around one year for us to deliver it back to the customer. Is my understanding correct?
Addepalli Krishna Sai Kumar
No, not necessarily. Not in all cases. Certain cases where it’s a fresh order and we need to source material and all, the timing of sourcing of the metal and all may take some time. But there’s some orders, you know, short term, where we have some stocks, we have a huge inventory available with us. So, you know, the execution, that’s why I told you the execution is right from up to, from six months, up to 12 to 14 months. That’s the way you have to understand.
Prathamesh Dhiwar
Okay. Okay. And so what is the current capacity utilization?
Addepalli Krishna Sai Kumar
See, we are not a product company to assess the capacity of the, you know, company and its utilization, actually. So it depends on the product mix. There are certain, you know, items, you know, that we produce that I can produce in a month, I can produce more than thousand members. But that’s not the requirement. It would be. Actually, so this is not something which can be ascertained as a capacity utilization. If you. Whenever you have a time, when you come to Hyderabad, you can visit the plant. I will explain you more in detail. Because even if I explain it now, you will not be able to visualize and understand what it is meant by. Actually.
Unidentified Participant
It will be pleasure for me, sir, to come and visit the plant. So my final question. Current promoter pledge part is around 33% as of December. Any plans of bringing it down to 0%.
Addepalli Krishna Sai Kumar
In next one year on a phase by page, phase by phase basis? That’s what we are working towards.
Unidentified Participant
Thanks a lot sir for answering all the questions and good luck.
Addepalli Krishna Sai Kumar
Thank you so much.
Operator
Thank you. Ladies and gentlemen. We will take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments. Over to you, sir.
Addepalli Krishna Sai Kumar
Yeah, yeah, yeah. Other questions exhausted.
Operator
Yes, I will take this as the last question. Over to you for the closing comments.
Addepalli Krishna Sai Kumar
Okay, so thank you very much to all the investors and team Anandrati, my colleague Rukia Pavin and Tanya Gupta, my IAP team, for participating in today’s conference call. We are committed for continuously improving our performance. And we also assured you that we will make every effort to achieve much better results moving forward.
We are confident that the upcoming quarters will also bring positive outcomes with Q4 expected to surpass Q3 in performance, which has been at, I mean said tradition earlier as well. Overall, we are on track to deliver stronger results compared to the last year. We deeply appreciate the unwavering support we have been receiving from all our investors over the past few years. We look forward for your continued confidence in our efforts.
Thank you once again and we eagerly anticipate reconnecting with you for the June update. Wish you all a wonderful day ahead. Jacob.
Operator
Thank you on behalf of Anandrati Shares and Stockbrokers Ltd. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.