Axiscades Technologies Ltd (NSE: AXISCADES) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Unidentified Speaker
Sampath Ravinarayanan — Executive Chairman of the Board
Sumit Khetan — Moderator
Shashidhar S K — Chief Financial Officer
Analysts:
Unidentified Participant
Balasubramanian A — Analyst
Jatin Jadhav — Analyst
Nirali Gopani — Analyst
Koushik Mohan — Analyst
Deepak Poddar — Analyst
Drew Shah — Analyst
Poojan Shah — Analyst
Mayur Parkeria — Analyst
Jai Johan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY26 earnings conference call of Access Gates Technologies Limited hosted by MUFG in time. 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 touch tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Sumit Khetan from MUFG in time. Thank you. And over to you sir.
Sumit Khetan — Moderator
Good evening everyone. I welcome you all to the earnings conference call to discuss Q3 and 9 months FY26 results of Access Kids Technology Limited to discuss the result we have from the management, Dr. Sampath Ravi Narayanan, Founder, Chairman and Managing Director, Mr. Shashidar S.K. chief Financial Officer along with the senior management team of Access Kids Technologies. They will take you through the results and the business performance after which we will proceed for Q and A session.
Before we proceed with the call, I would like to mention that some of the statements made in the today’s call may be forward looking in nature and may involve risk and uncertainties. For more details, kindly refer to investor presentation and other filings that can be found on the company’s website. With this, I now hand over the call to the management for their opening remarks. Thank you. And over to you sir.
Sampath Ravinarayanan — Executive Chairman of the Board
Yeah, welcome. This is Ravinar and Jath. So first I thank all the investors who joined and welcome. As we conclude the third quarter, I’m happy to inform you that we are firmly on track to complete the FY26 as planned, as projected. And we are also laid the foundation very clearly for FY27. I’m confident of achieving the results. Basically it boils down to EPS growth of nearly 40 to 50% each year we would achieve in FY26 and we will definitely achieve the same in FA27. So we are on track for that with enough forecast, visibility, everything.
So we are fine with that. So overall long term mission, you know power 939,000 crores by 2030. We are piling up the pipeline at this stage. Lot of things are being converted. We are working on some large partnerships and deals as we speak. And again I believe we will be on track for the same. Of course all dependencies include the facilities, some inorganic activities, acquisitions etc to gain strength and add new activities to us. And they’re especially in manufacturing. So that will happen and as another thing, another major goal for us is to as you know that we are moving from services to manufacturing and product solutions, etc.
So for that also very, very firmly we accelerate the process. We are trying to move faster than expected on that issue. So we hope that we’ll have a significant percentage this year. It is so far it is 39% on products and solutions and 61% on the services. We will flip the same percentage by next year by 27. So then now the facilities are operational, especially that Euro land which has a fairly very very good electronic manufacturing. Then certain labs are already operational and we are able to attract some good customer base especially from hyperscalers and large companies out of US and Europe.
So that’s happening quite well. Dallas kind of functionally ready and then back our ambitious project, Devin Ali Complex is getting ready the radar portion, the complete radar hangers will be ready by in another by Q3 it should be completely ready. We are looking at large integration of ladders and maintenance of radars in that facility. Looking forward to that. And again we have to handle the inorganic growth, organic tracking and also to focus on the growth areas and meet the power930 and also have investor relationships. We have Mukund. Mukund is with me now. Mukund Santana. He comes with three digits of experience and from IIT Madras.
I am as a very good combination of technology and finance. So he will be assisting or helping us to achieve the results etc and overall we are on track. Just wanted to reassure. I will let Sachi to our CFO to discuss with you on details of our performance and what’s going forward. Thank you.
Shashidhar S K — Chief Financial Officer
Thank you. Good evening everyone. Thank you for joining us today. For the Q3 and 9 month FY26 earnings call of Access CADAS Technologies Ltd. It’s our privilege to present another quarter of strong operational execution and financial performance. Q3FY26 has been a landmark quarter for us with revenue rising to 343 crores reflecting a 25% year on year growth and 14.8% sequential growth. EBITDA for the quarter stood at 63 crores marking a 55% year on year increase and delivering our highest ever quarterly EBITDA margin of 18.3%. An expansion of 360 basis points year on year reported PAT for the quarter to 87% year on year to 28 crores at 8% PAT.
Margin adjusted PAT after removing the impact of labor port charge of 7.82 crores is at 35 crores at 10.3% PAT margin underlining the strength of our improving mix and operational discipline. Our growth domains Aerospace, Defense and DeFi constituting 78% of our total revenue, continue to demonstrate significant momentum growing at 36% year on year supported by accelerated program ramp ups, robust order inflows and healthy customer demand.
These businesses remain central to our long term value creation agenda and continue to reinforce our margin profile. Now Talking about the nine months performance for the nine months of FY26 revenue grew 16.2% year on year to 886 crores while EBITDA reached 144 crores surpassing the entire FY55 EBITDA within nine months. Reported pack is at 72 crores with pack after removing the labor code impact at 79.5 crores.
operator
Sorry to interrupt sir, your voice is breaking sir while speaking. Hello sir, we are not able to hear you as your voice is breaking sir.
Shashidhar S K — Chief Financial Officer
So are you able to hear me now?
operator
Yes sir. Yes, loud and clear.
Shashidhar S K — Chief Financial Officer
Yeah. For the I’ll Talk about the 9 months performance now. For the 9 months of FY26 revenue grew 16.2% year on year to 886 crores while EBITDA reached 144 crores surpassing the entire FY25 EBITDA within 9 months. Reported PAT is at 72 crores with adjusted PAT after removing the labor code impact is at 79.5 crores which again exceeded the full year FY25 PAT of 75 crores. EBITDA margins improved to 16.2% from 13.8% at 240 basis points uplift year on year demonstrating our continued focus on portfolio optimization, delivery productivity and cost discipline. EBITDA margins for F3 for the three growth domains were at 21.4% as against 18.7% in the same period of previous year, an improvement of 270 basis points.
Our annualized revenue per employee at 0.54 crores improved 38% or 3.39 crores which was in the previous year. Our other verticals of heavy engineering, automotive and energy with a combined revenue of 194 crores for nine months and constituting 22% of revenue continues to be impacted by macroeconomic and customer specific headwinds and is in the process of being recalibrated. The diluted EPS for nine months which is not annualized was at 16.73 which grew by 55% from 10.13 in the same period of previous year. Our balance sheet remains robust with a net worth of 730 crores and a net debt of just about 6500 crores as on December 31st.
This quarter further solidified our transition towards a solutions and product led business model. Under the Power930 vision, the ratio of product versus service revenues pivoted to 3961 as against 3367 in the same period of previous year. Our new infrastructure, the fully operational Devanhalli Hero Land facility and the progressing Devanahalli Atman complex is already acting as a growth multiplier enabling advanced manufacturing systems integration and new product development for global OEMs.
We are encouraged by DE wins in Q3, growing global customer engagement and a healthy order pipeline which strengthens our visibility for Q4 and beyond. As we enter the final quarter of FY26, our financial foundation is stronger. Our revenue mix continues to improve and we are building a more resilient and globally competitive access cadence capable of delivering long term value for all the stakeholders. Thank you and we now open the floor for questions.
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 their 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. We take the first question from the line of Bala Subramanian from Arihan Capital. Please proceed.
Balasubramanian A
Good evening, sir. Thank you so much for the opportunity. Sir, my first question. I am looking at this geographic revenue side. US has grown more than 50% year on year and Abacus more than 30% year on year. While Canada and Europe are like. It’s like flat range. Flat range. Could you please explain despite having tariffs with us how like we have executed and how are the customers accepting that tariff levels and how we are managing. Managing. What is the arrangement between with us and customers? And we have.
Sampath Ravinarayanan
We are not impacted by tariffs per se. The activities we do.
Balasubramanian A
Hello. Hello.
Shashidhar S K
Are you able to hear us?
Balasubramanian A
Yes, sir. Yes.
Shashidhar S K
There’s a background noise.
Sampath Ravinarayanan
There is a background noise. Somebody has to mute. And we are not impacted by the terrace as it is. We are. Europe is very steady for us. There is a growth, a lot of growth happening in Europe. But the US also is doing quite well at this stage. Overall the percentage will remain the same. We don’t see any major shift. Overall Europe will remain very strong for us. Continue to remain very strong for us. We hope that they will maintain that 1/3 US, 1/3 of Europe and 1/3 of India. That ratio will kind of more or less continue.
And so that is what. So there won’t be any impact. And with the European Union fta, we’re hoping European Europe can do better. It’s going to be slightly better. And with our strong presence in Europe and because we are traditionally having a very, very strong presence in Europe, Europe will continue to be a very strong hold for us and the US because fuel barrier, new hyperscaler orders and a lot of things happening in east side. As you know that these are 100 of revenues come from us. If there is a lot of traction on ESI currently and we are getting a lot of momentum with the new facility. So US will continue to grow on ESI segment. Europe will continue to grow on aerospace and defense segment. That’s all I want to tell you. Okay.
Balasubramanian A
Okay, sir. On the different side, nearly 40 percentage of revenue share is there. I’m looking at the data gross margins nearly 43.5% and EBITDA margin 26.2 and EBIT margin 25.6. But if you look at some of the defense competitors are anywhere 35 to 40% kind of range. Just want to understand how do you look at defense margins and our depreciation level also nearly 10 million in this quarter we are doing massive capacity expansion. On that defense side, how do you look at depreciation and capex side over next two to three years side?
Shashidhar S K
Yeah, so. So essentially, you know, with respect to your question on gross margins and of course it depends on the quality of the programs as what we are executing in some quarters, of course, you know, it will be the programs of what we execute may be much more lucrative in terms of margins. And of course, you know, in terms of the capex it is still work in progress and. Now there’s a lot of background noise. So with respect to CapEx, the CapEx cycle will continue for fall of FY26 and the better part of FY27 and FY28 and the, the depreciation, you know, I would say will of course be as per the, you know, I would say the, the, the, the company laureates and what is there.
Balasubramanian A
So actually I’m trying to understand whether we can able to reach a 33 kind of margin.
Sampath Ravinarayanan
Basically we are looking at, see we are not going to be anything different from the rest of the industry because we are working on the same programs, almost similar programs as our competition because we are sometimes winning against our competition. So all of us are in the same page as far as margins are concerned. Our own heads are also not that different at this stage. So what we are looking at is that because the margins may look slightly in the lower side because a lot of warranty work is going on in defense, lot of new programs are.
New wins are happening which requires initial investment or initial timing. So as the program matures with the margins will keep on increasing. So definitely there is no difference between one company to other because they are all winning in a competitive way. And so I think it’s fair to expect in and around 30% plus minus 40 as far as EBITDA is concerned on a mature programs and proportional operating margins. So currently most of our wins are from the new programs. And so initially there will be a little bit of impact, but as we progress then the margins will keep on increasing. That’s what.
Balasubramanian A
Okay, last question.
operator
Sorry, Mr. Balasubrin.
Balasubramanian A
Yes.
operator
I would request you to join back the queue as there are several participants waiting for their turn.
Balasubramanian A
Okay, thank you. Thank you sir.
operator
Thank you. A request to the participants. In order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. We take the next question from the line of Jatin Jadhav from Sir Capital. Please proceed.
Jatin Jadhav
Hello. Am I audible?
Sampath Ravinarayanan
Yeah, please.
Jatin Jadhav
First of all sir, congratulations on such an amazing set of numbers. My first question is on the lines of sir, where are we based on the development of the seeker for. For the different types of missiles which we were trying to address. And just a follow up on that question, what kind of seeker are we building? Is it an RF speaker or a infrared image recognition speaker? So that’s the first question.
Sampath Ravinarayanan
Sir, we are developing the RF speaker for bigger missiles including for Brahmos and Kusha etc and we had a very successful trial last week. And so it has been kind of in RF side has been done and proven and customer demo has been with all the RF functionalities has been completed on 4th of February. So now what is remaining? You see mechanical housing, total integration improving. We hope that one level it will be done by March and then it will go through the talents and certifications. So that may take another three months time. If everything goes well, by God’s grace, we will be qualified.
All ours will be the first seeker to qualify in everything, every aspect and the new new type of seeker. So we hope to complete the whole process by Q2 basically and this is for Brahmos and a similar speaker will be available for. And Brahmos will Be floating a new RFP by Q2. By that time we have to be ready and that new RFC for the next future generation of Seekers and we should be ready by that time.
Jatin Jadhav
Got it sir. So second question was on the recent update you mentioned regarding the Mission computer for the LCA Mark1 first of all amazing work done. So I wanted to understand. Let’s say we if we can apply this mission computer on any platform, is it platform agnostic? Of course certain changes will be required and the follow up was the software which. Which is used by the Mission computer is also developed by us and deployed.
Sampath Ravinarayanan
The mission computer algorithm is provided by. The Defense Labs whereas the display processes the basic software. Then the AI algorithm is provided by us. Technically it can be used for other platform also sir. And so it’s platform agnostic. Currently this is. This is going to be in the all the pages and the same thing is applicable to Sukhoi and every other platform also. So we will be hopefully the first choice partners as continuing as far as CMC is concerned.
Jatin Jadhav
Okay, got it sir. Thank you so much and I’ll get back into the queue. All the best.
Sampath Ravinarayanan
Thanks. Thank you. Thank you.
operator
Thank you. We take the next question from the line of Nirali Gopal from Unique pms. Please proceed.
Nirali Gopani
Hi. Thank you for the opportunity and congratulations on a good set of result. So my question is on the guidance that we give out. So we still maintain the 40 growth in the core business in 26, 27 and followed by 70% in FY28, right?
Sampath Ravinarayanan
Absolutely, absolutely no change. 26 we are all set. We are one quarter away but we are expecting a very, very good result followed by Q3. So we will stick to that core increase of 40 percent and similarly 27 we have, we have reviewed today also again that the entire order book, execution details etc. We are firmly on track again on the core increase of 40% plus. So we are very much committed to that and we are on track as far as 28 is concerned. A lot of dependency on the facilities but we are having a three pronged approach.
Of course current business has to grow in the similar pattern then inorganic we are looking at few acquisitions immediately and then we are also looking at facility based growth. So it is. We are very. And we have packed a good pipeline and I’m very confident about that also 28 or so. But currently let us focus on 27. We are very firmly on that. Okay. I can assure you about it. Okay.
Nirali Gopani
So just the question because when you see EPS growth of 40, 50% and when the core business is growing at such a rate the bottom line should grow ideally much faster. Right. Because this is a higher margin business. Am I missing out on something or are we seeing any pressure on margins on any of the segment core business?
Sampath Ravinarayanan
No, the margins of the overall percentage has come down because of the non core activities. If you look at it, our core we have increased the percentage point by nearly 270 points last year. Right now it is at averaging the 21.4. And because our non core and other activities and so that is cooling down even in code our services are lower margin solutions products and all these things are at 25, 26 margin whereas services is at 18.5 margin.
Nirali Gopani
So sorry, sorry to interrupt but by my question was on your EPS statement that you have mentioned in the presentation where you say that EPS will grow at 4050 because in the first nine months only the EPS has grown much faster than that. And if you grow the core business at this rate then the bottom line growth should be much faster than 40 50% that you have mentioned. And hence the question.
Shashidhar S K
You see the 50% is the minimum conservative number which we are talking about and you would have seen the nine months you have grown by 65%. So essentially the ratio downwards of EBITDA no is not. Is about no at the moment it’s about. Just about no. One second.
Sampath Ravinarayanan
See I will tell you. Currently we have our packed. Our EBITDA is going to be fairly good for this year and our pact we are expecting to close. Whatever ratio I’m giving will be that and that will be a good number basically because we have based on. Because today the labor at this thing because that has reduced from provisions and some ESOP provisions we are making for the companies overall with all the growth there is no pressure on the margin per se but extraordinary at this thing like expenditures such as ESOP and employee costs and then this especially in the labor this will probably make us correct to around 45% growth on EPS. Okay.
Shashidhar S K
Yeah. So so basically as I said from from EBITDA line to the you know, PBT line is about 78 as what we have. And so essentially the conversion will be much much higher as compared to the conservative number. If you are putting splitting out.
Nirali Gopani
Perfect. And just one last clarification. So in the aerospace.
operator
I would request you to join back the queue.
Nirali Gopani
Yeah, that’s it. Thank you.
operator
Thank you so much. We take the next question from the line of Kaushik Mohan from Ashikagra. Please proceed.
Koushik Mohan
Of numbers. So I just wanted to understand the clarity on the. I’ll just continue on the same last question. Can you give me understanding on the EPS? Because last quarter last year we did around 17.63 on the EPS and this here we are telling around 40, 50 percentage. But when we look at exactly what the Q3, Q3 we did around 6.52. And Q1 we did around 5.42 and 4.88 in Q1. So almost around last year EPS is already achieved. So if the growth is considered then. It have to come around 25 to 26 rupees. Is my understanding very clear on this part?
Sampath Ravinarayanan
Absolutely, absolutely. You are on target. We are looking at the Same numbers around 25, 26 EPS. You’re looking at that. Okay.
Koushik Mohan
Okay, perfect. And also sir, on the next year front. So in one of the meetings, in the recent Bangalore meetings you also mentioned. That we’ll be having a very good attraction on the top line as well. As on the EBITDA level. So what, what will be the EBITDA. Level growth that we can expect from this year to next year?
Sampath Ravinarayanan
This year to next year again we are Targeting conservatively about 45% growth in EBITDA and minimum, that is our bare minimum growth and we are on target for that. It could be more but in under one I’m just giving a band of 40 to 50%. But currently we are well on track for the same. We are looking at. I don’t want to give numbers but you can compute that. Basically we are on track. Basically next year also we are looking at the number ups number. You know we have got you my this thing. So you said 25.
You keep a 45 on the top of 25. So approximately we will be able to reach that easily. Yeah, yeah, I’m very confident and we are working towards it. In fact that’s our primary number we are targeting. So we are back working our EBITDA path and all the revenue numbers and order books, everything based on optimizing the whole thing. That’s all that will be done for next year.
Koushik Mohan
Got it. Thanks.
operator
Thank you. We take the next question from the line of Rutuja from Alte securities. Please proceed.
Unidentified Participant
Hello. Hello.
Shashidhar S K
Definitely gone.
Unidentified Participant
Yeah. Thanks for the opportunity. So how much is the current order book and can you give clarity on the composition of the same?
Shashidhar S K
You’re talking about the order book, right?
Unidentified Participant
Yeah.
Sampath Ravinarayanan
Our forecast visibility I would say because we are all program based. So we don’t call that as another book because depends on the number of number of items they are going to order. For example, so we are qualified either we are the first vendor or second vendor in most of the program. So I will call it as a forecast feasibility. Based on that we have a currently around 3300, 300, 3400 course as our forecast visibility at this stage. And we have enough two numbers to close for next year comfortably as we planned. And the as far as pipeline is concerned we are very robust pipeline so we are comfortable.
And basically in terms of growth areas it will continue to be defense as a number one growth area for us and followed by ESAI and aerospace will be moving more towards the manufacturing for the next year. So the growth will be good robust but overall we’ll be able to manage the growth we are talking about. So it will be Defense first, the ESI next and the aerospace. That’s how I see that.
Unidentified Participant
Okay, and what sort of programs are you looking for to be part of in the future in defense space especially?
Sampath Ravinarayanan
See we are as we are. We don’t want to call it as programs as we have a three pronged approach. We are a very different company in defense compared to my cover competitors. We are the only companies we work on a three activities. One is on the DRDO PSU side which is program based under MOD which is BID based. Okay. And then there is a co based which is not program based, it’s offset based. So we are working on all the three and our main focus is on the OEM offset base is going to be our main focus area for growth, main driver for growth in the future.
And of course DRDO is stable currently most of our revenue comes from DRDO deal that public things and item number one. But we were, we are also looking at we have got some interesting bits going on. RFP is going on with government of India and hopes we should win some of this. And basically in all the three we have a very very good chance as I said and in DRDO we are baseline is assured because for the growth it is assured because it’s all long term. We have five year visibility in most of the programs so we are firmly on track. So other two, yes, we are negotiating on the item number three and item number two, we need to see some of the bits are going to be known by Q1 Q2 of next year.
Unidentified Participant
Okay, thank you, thank you,
operator
Thank you. We take the next question from the line of Deepak Podar from Sapphire Capital. Please proceed.
Deepak Poddar
I’m audible sir?
Shashidhar S K
Yeah, please.
Deepak Poddar
Yep. Thank you very much sir for this opportunity. So just wanted to understand first up you mentioned about very robust Pipelines, can you quantify it? What’s the pipeline we are looking at in terms of order and what’s your current order book?
Sampath Ravinarayanan
Current article they mentioned last question so you can take it from there. So pipeline wise we are looking at around nearly booking. What is the thing? Our CGO confirms it is around 14000 crores as of today the pipeline and this includes the bits we are submitted and the contract relationships we are signing especially with far OEMs long term visibility of all these things we are discussing put together qualified pipeline which is being vetted and so on. I want to again don’t take it as a guidance or anything. This is a pipeline. There is a fair chance of converting this but currently we are very confident about this. And this is for a period of next four years.
Deepak Poddar
And the general conversion ratio, I mean what’s the conversion ratio?
Sampath Ravinarayanan
As I said OEM should have a pretty high conversion ratios because they’re all like relationship based. And as the discussion closes we will 100 convert them government in DRDO the conversion rate will be 50 because there will always be one strong competition because there are two winners. There will be about four bidders India to go. So we are 50% conversion ratio in in mod. It is a roll of the dice. It could go anywhere. But we are working on some interesting programs and we are qualified overall. I can say good chance of 50 60% conversion
Deepak Poddar
overall overall. Okay. And on on the margin front. So what’s the differential we see between product solution versus service margins as we embark on a journey towards 80% kind of product solution and do we aspire? I mean any aspiration we have over the medium term, I mean next five, six years to reach any aspirational EBITDA. Margins that we might have.
Sampath Ravinarayanan
Basically we see a degrowth in services. Services keeps on declining in terms of margin and we struggle to get 18.5% EBITDA this year for the core services and non core it is very poor services margin are going down. Products and solutions margins are increasing and they are hitting at 30%, 25 and above. So move faster. We move from services to products and solutions we are better off. As far as your question is concerned, target next year will be about 20%. 20% this year will be closing at 17% average but next year it will be 20%. That is what we are aiming at. 20% margin the following year will be much better. Okay,
Deepak Poddar
20%. Does that include your other income as well?
Shashidhar S K
No, it doesn’t include the ebitda. Does not include other income.
Deepak Poddar
Okay. And Also I will, I was trying to understand more on the aspirational part. I mean next four, five years, do we have aspiration to reach 25% or something on those?
Sampath Ravinarayanan
Yeah, yeah, yeah, of course, of course. Once we flip the 80, 20, you make the map into the average products and solutions are at 25. At this stage. It is growing. Also the margins in the products and solutions area are increasing. There is a definitely there is a good margin available in the product system as compared to services. Okay, so we are aspirational. Yes, we are, we are looking at the, we want to be the among the top margin companies in the country. So we are looking at 25 if we call it as aspirational. But in order to achieve that, we should have a. We should completely move to products and solutions. Okay, understood.
Deepak Poddar
And any ESOP cost we had. Mr. Deepak, it’s just a data point. I mean, I’m done.
Shashidhar S K
Yeah. So. So the, the current P and L includes an ESOP cost of around 5 crores. So this is going to go up in the coming year because there is a lot more outlay which is being planned for you, sir.
Deepak Poddar
So 5 crores in third quarter or overall?
Shashidhar S K
No, no, for all the names of the current financial year. So Operator, there’s a lot of disturbance in the background. Can we ask everybody to. Ask everybody to mute please?
operator
All right, sir.
Deepak Poddar
And what was this. Number for third quarter?
Shashidhar S K
No, no, we take a charge of around 2 odd crores every quarter, as I said. You know, we are currently finalizing an ESOP plan for the senior leadership and that’s going to get enhanced from next financial year, which we will kind of say talk about the first quarter of next year.
Deepak Poddar
Okay. It will get enhanced in FY27. So what’s the ESOP cost you are looking for? FY27.
Shashidhar S K
You see, as I said, the, the ESOP list is still being finalized. We do not want to look at comment on that. So we will kind of, I would say have a clarity on this in the next financial year. Q1.
Deepak Poddar
Sure, sure. Okay, okay, okay. I think that’s very helpful. Service you all the way, man. Thank you so much.
operator
Thank you. Before we proceed with the next question, a request to the participants. When the management is speaking, please mute your lines. The next question is from the line of Drew Shah from Ambika fincap. Please proceed.
Drew Shah
Congratulations, sir, on a very good set of numbers. I just have one question, sir. In last three weeks we have done a two press release on order wins on Esai. Can we just quantify the Scope because right now the order wins is around one and a half to $2 million. But what is the scope eventually after three to four years down the line. I’m assuming this is just a pilot.
Shashidhar S K
Yeah, this is the pilot. We are going to scale up for the production. That’s where our new facilities we are going to use all our US customers apart from design, we are also going to deliver the box builder. So there we are expecting the large. Order pipeline from them.
Sampath Ravinarayanan
Last week the one of the world’s leading company came visited us inspected the facility. So we are expecting this is a pilot. So we are increasing a multifold increase in the once the facilities have accepted certified, etc. Last week the trials and inspection went very well. Yes. And so hopefully all our leading PSI.
Shashidhar S K
Customers, their son interest. There are a number of customer visits have been planned February and March.
Sampath Ravinarayanan
These two pilots.
Drew Shah
Sorry, sorry sir.
Sampath Ravinarayanan
Yeah. These two particular customers we are engaging in a bigger way and I also had a meeting with one of the customers, one of the hyperscalers in US last week who showed interest in diversifying and engaging with more activities with us. And the facilities come out well. And apart from the acoustic lab, we are asked to set up the home kind of home automation kind of thing with multiple sensors such as my millimeter sensor fusion, a large lab that can test multiple sensors for elderly living and home automation for a hyperscaler who is doing one of the companies which they now bought which is more into the home and hospital in the sense but they make senses for that.
So basically I had a meeting so it looks multiple ways as you know, the other guy who’s a phone manufacturer and they visited and we are looking like a bigger engagement with all these things we can’t quantify. But it will be as I said this whatever you got could be a tip of the Albert and it could be much bigger in the coming days. So but I just want to keep you informed by that time we finish all this pilot and everything will take about six months to one year. Don’t expect something great happening in FY27. Maybe the order book will be there, but 28 onwards the facility will start doing much more.
Drew Shah
Okay, but sir, this would be more like a CDMO contract site. So the margins will not be what we are doing right now at 24, it will be much lower, right?
Sampath Ravinarayanan
No, no, it’s higher. For example, I’ll tell you because in the testing we are also making the flex boards and this particular one customer we are talking about has to change its device every year. So we have to make this device and give it to all the OEMs every all the manufacturers every year. So it is year on year change. So it’s recurring. Plus the margins are very very good as well as defense margins are even more in certain cases.
So we are looking at a fairly decent margins. Competition is not much and we are okay with this thing in ESI and the defense will have similar margins. So far we are at 25, 26. In fact pizza is slightly higher than difference as far as we are okay. So we are at 26, 76, 26 and off in EBITDA and at 25 in difference at this stage. But we hope to improve that at the coming as we progress.
Drew Shah
Okay, fair enough sir. Great sir. Thank you so much for the opportunity. And all the best for the future quarters. Thank you.
Sampath Ravinarayanan
Thanks.
operator
Thank you. We take the next question from the line of Poojan Shah from Molecule Ventures. Please proceed.
Poojan Shah
Hi sir. Thanks for the opportunity. My first question pertains to the different segments. So we are quite bullish on the segment called QRSM from our customers. And we were expecting in Q4 that order will able to inflow. So are we on track? So what are you hearing from your key customer? Is it. Is it on time on track or it is now bit delayed? Can you just give a sense about that,
Sampath Ravinarayanan
sir? Care Sam. We are expecting anytime our order to be closed sir here shortly. Anytime should come maybe two weeks. Within two weeks. That’s not our.
Poojan Shah
Hello.
Sampath Ravinarayanan
Please go ahead. Yeah, yeah.
Poojan Shah
Understanding the hyperscaler so we understand that right now the the amount is too too small but just wanted to understand the context in like in. In how many years it was able to scale up from a 1 million to let’s suppose to get a certain amount of comfortable size. We have been expecting from hyperscaler. So I understand ESA might be understand the long time cycle and overdue but just wanted to understand your predictions on hyperscaler and how we will evolve with this.
Sampath Ravinarayanan
Basically we are talking about currently two customers. You might have guessed. Okay. And the one one which can grow up very well is because they are shifting all their manufacturing to India. They are India is becoming one of the largest consumers. So there are multiple manufacturing lines coming up. And what we are doing is an important every station of the product. We are providing the test kits in every station which is to be changed every year. So currently we are doing for one or two items for one line. So basically imagine that it goes into most of the lines and around the world.
So the numbers look Good. And but we need to prove lot of things to do that. If I we can go from current level to 100x or 50x if we go do it right. I don’t want to speculate but at the same time it is. It can go up how big it is up to our capability and our this thing accommodation is less. Maybe two or three maybe one more person in India and around the maximum three, four around the world. So we need to see how we are doing as far as other person is concerned. I believe we are the going to be the exclusive person for last one lab we are already getting ready another lab is the growth will be slower but still we will have good numbers there. Basically again we can say 10x20x are possible in that.
Poojan Shah
Got it. And just a bookkeeping question is telling. The steel is split between the product and service business for defense.
Sampath Ravinarayanan
Currently defense is almost totally into products and solutions. We have reduced the services services very less currently in defense. Currently our services are only a very little portion in Isai and almost aerospace. Full aerospace. But as he said defense is almost totally converted into a product and solutions. Got.
Poojan Shah
Got it. Got it. Thank you so much.
operator
Thank you. We take the next question from the line of Rohan Mehta from CCOM family office. Please proceed. I would request Mr. Rohan to unmute and then speak.
Unidentified Participant
Hello sir. Am I audible?
Sampath Ravinarayanan
Yeah please.
Unidentified Participant
Thank you for the opportunity. So could you give me an update. On the potential divestment of the non core business and are we on track for a resolution by March end?
Sampath Ravinarayanan
Yeah, very much on track. Absolutely. And I don’t want to just think but I hope the timing will be maintained. We are very much on track. Okay. Definitely by next investor call you should be able to share all the details. Okay, perfect.
Unidentified Participant
Thank you so much. That’s all from the front.
operator
Thank you. We take the next question from the line of Mayur Parikha from Wealth Managers India Private Limited. Please proceed.
Mayur Parkeria
Good evening sir. Thank you for taking my questions and congratulations to the entire team for continuously delivering quarter after quarter and sticking to the directional where we are going in terms of narrative, in terms of numbers and in terms of capabilities and our execution. So great.
Sampath Ravinarayanan
Thank you.
Mayur Parkeria
Yes, great execution sir. I just had two questions. One is you know one of our slides talk about the headcount breakup and in that is the industrial breakup of around 30 is what we say is the engineering side is that because the core is 60 and support is 9.
Sampath Ravinarayanan
So that 30 is the non core as we project it. Right. We have roughly around non core. This will be part of the diversity.
Mayur Parkeria
I understand. So sir, if we understand we have been looking for over now, 3 4/4 that number has actually started to already gradually scale scale down substantially it looks like. Is it. Will it be because even one year before the numbers and now so while the core may have remain rising and maybe we may be adding people but on the non core side is the numbers have already started to come down. Is that is it efficiency driven or we have started to scale down there?
Sampath Ravinarayanan
Yeah, we are not filling the attritions for sure and anyway we are kind of because we are in the assets that we are in the face of doing this hiding this thing. So we are not we are going little clear on the manpower not adding or adding anything at this stage. So anyway as I said we’ll give you a clearer picture by the next investor call which would have been more by that time. Okay. It’s a very important goal for us internally so so that we start the next year on a very good note. That’s what is very important personally for me. This. I kept it as my target for this particular financial year. So hopefully we should be able to.
Mayur Parkeria
Okay, right. Right sir, wish you all the best for that. So last question on on the Capex side sir. For the benefit of every all of us it’s a slightly because you know it’s very difficult to understand because the segments are defense and aerospace and what we are doing at the even esi. So on the new facility if you can help us understand the scale and the capabilities which access is building over the next 12 months to 18 months so that you know we can fully understand what what we’re trying to do in the various segments in terms of radar or missile or you know in terms of arrows, you know.
So just to reiterate maybe just.
Sampath Ravinarayanan
I got your point. See we are doing three facilities as you know dal which is definitely Aeroland, then dap, which is definitely Atman complex. Then there is math missile Atman complex in this last one complex, eight acres. We got the land, we are building the facility. It will be toilets for all missile electronics integration electronics means all the foreign OEM electronics we are trying to build. This will include figures onboard electronics, then data links for the missiles etc and we are going to do it in collaboration with some world magazine and also we’ll do for indigenous missiles.
We are working on certain programs and this will be a complete facility. This will be in two parts. One will cater only to foreign OEMs only for India. It will have fairly good capabilities for missile Integration mostly completely for missile electronics. Okay. And it will be a cold assembly facility without the rocket motor or final ammunitions etc. It will be doing the final cold assembly if it is integrated will take about two years time. But will be one of the finest facilities outside the public sector. Once it is ready. It’s very unique and that is what we are trying to do Hyderabad.
So that is finest and largest. I. I would say both. Both. I would say both so far at. At this point after as we speak the definitely in the segment we are operating we’ll be the resting. We’ll be addressing all the aircraft based missiles and so on. So I think we are on a good target about that. That. Okay. And the art surface after kind of results basically that will be our main main focus on the Hyderabad facility. And as far as Bangalore is concerned it is for about two to three activities. Mainly radar. You want to have a one of the best radar facilities.
Again this is on a three pronged approach. One is to build our own large radar integration for larger radar which is both airborne as well as grounded us to build it. So we are probably building arguably one of the biggest radar facility in India in the terms of height and capacity etc. So it can go up to 65ft or whatever it is with all the necessary hangers etc. This will also cater to the maintenance of the radars because India has lot of radar which is very old, 30 years, 40 years, 50 years. We are looking at retrofitting and maintenance of all the old radars and so on.
That is another second thing and third is performance based logistics and support for foreign volumes, foreign radar. So that is also there. So this, this is specific facility mostly catering to the radar. And the other part will be aerospace manufacturing mostly into tooling and certain parts and final inspection, supply chain management etc. That is on the second part of the attack facility. So we’ll have radar space. Third one is simulators and mostly for the aircraft simulators we are trying to work with the world leaders like Indra where we are trying to get mostly for the defense aircraft simulators.
So those simulators will be manufactured and they will be supported in India. As you know we already done a very successful implementation of darn air simulator and it has been running very successfully in in Air Force and possibly we will get probably a repeat order. Some more simulators are expected. So that will be. These are the three activities we will core activities will be taking up in the facility. As far as Dal is concerned it’s purely for ESAI mostly for east side and and certain system integration activities where we are building the acoustic lab, we are building the laser lab, we are building IR infrared.
Somebody asked about infrared speakers. So we are not only building for infrared seekers but also we are looking at infrared countermeasures basically. So it will be a laser IR the acoustics and then MM radar kind of small, the sensor fusion. All these things will be covered. This is targeting a design and certain level of designs activities. So with this we will probably arguably have in private sector the most comprehensive R D and support under manufacturing facility for these items in India. That’s our goal. We should be definitely the first choice outside public sector for all these products. That’s our goal and we hope to achieve that in the next 12 to 4 24. Okay, great.
Mayur Parkeria
Great service you all the best. Thank you for a detail. Thank you.
operator
Thank you. We take the next question from the line of Jatin Jada from Sahasra Capital. Please proceed.
Jatin Jadhav
Thank you for the opportunity. Again most of my questions have been answered. But sir, regarding the missile facility you mentioned, it’s very interesting that you mentioned that you will be catering to all types of missiles which are used on the aircraft. So just for a further understanding what what kind of work will be will we be doing on these missiles? Will be. Will we be upgrading them, testing them, maintaining them. Could you throw a little bit more light on that please?
Sampath Ravinarayanan
See testing is going to be done in Bangalore only. We are looking at as you know government is very keen to all the future missiles to be made in India. Now they are mandating from effective from 2025, 26 post operations. The missiles have to be made in India most of the missiles. So they are going to reduce the dependency of foreign imports. Even if it is foreign aircraft. The armaments slowly have to be made in India. So we are looking at first of all as you know that just I’m giving you an example of number of foreign aircraft.
You will be knowing there are 128 Jaguars, there are nearly about 36 plus 29 Rafas. There are about 50 garages and there are going to be 287 Mistral. That is sorry it is going to be lighter combat helicopters which is going to be there made by hei. All of them are requiring missiles at this stage and all of them are planning to use foreign missiles at this stage are already using and so Sukhoi of course and these foreign missiles will be slowly replaced by Indian missiles of the same type. Same type maybe same OEM will supply to those things but completely made in India.
So that’s a plan. Government of India has an ambitious plan and we are dying to be part of it. That’s what we can say at this stage. We are doing everything in our listing to get a small piece of action in this. That’s the whole theory about this path. Okay So I would say that and it is not about maintenance. It will be the upgrades and data links. Those kind of things will be that miserable maintenance per se will be done in Bangalore. Maintenance test equipments etc will be done but this will be more of new missiles or as you know missile shelf life is about 10 years and the maximum six to 10 years. So they keep on replenishing the missiles. So that’s what we are targeting.
Jatin Jadhav
Got it. Sir, my last question was on the mission computer.
operator
I would request you to join back the queue as there are several participants waiting for.
Jatin Jadhav
Thank you.
operator
Thank you. Before we proceed with the next question a request to the participant. Please limit your question to two per participant. Take the next question from the line of Jai Johan from three Netra asset managers. Please proceed.
Jai Johan
Good evening and thank you for the opportunity. I’m audible.
Sampath Ravinarayanan
Yes you are please.
Jai Johan
I just had a few Questions on the Q1 FY20 call management guided that FY26 core domain order book itself is around 1260 crore with no major dependencies on execution. And I you know as we have read 9 month FY26 and we executed about 690 crore implying roughly 570 crores still pending. I just wanted a clarification on how much of this remaining 570 crores scheduled for execution in Q4FY26 and which major defense, aerospace and ESI programs constitute. You know this remaining FY26 executable order book.
Sampath Ravinarayanan
We are finally the numbers we are going to execute out of this 1260 we may end up keep executing remaining about 300 crores right now because the remaining 200 facility dependence is there. So we are pushing it to the next year. But this is more than enough to meet our target numbers. As you know probably will cross thousand crores in core if I do this Approximately more than 1050. That is our target which is compared to last year’s 750 it will be still be 40 plus percent increase. So we are carrying forward the left out to the next year.
So that’s what you are adjusting is as far as esi. The majority of this is defense and the aerospace will be completing almost most of the order book this year and the ESAI is the one which we are pushing for the Next year also because the facilities are ready to be fully functional and certified. So to answer you out of 1260 we are moving around 200 to the FY27 and keeping that 1 0, approximately 1060 to be completed this year. So that is compared to last year 750. That will be a 40% plus increase in the core activities.
Jai Johan
Which major, you know, programs constitute this remaining order book for defense.
Sampath Ravinarayanan
We have answered many times this whole thing. So I just want to go back as we are in almost all the major programs today, both in aircraft and results. We are targeting that. And of course as I said we have a three pronged approach. We are not only program dependent, we’re also doing some of the NOD work and we are also looking at foreign VMs.
Jai Johan
So yeah, understand and also you guided for approximately 1800 crore water book and visibility for FY27 in core domains. I just wanted to understand the source of this visibility. Like specifically just need to assume that large part of FY27 visibility is OEM led and long term programs. Because I think as for my understanding, MOD and deepest DSU orders are more lumpy and you don’t have long term availability for the same. Right?
Sampath Ravinarayanan
Yeah, you are right. And as far as next year is concerned again our target is about 40 45% growth in the core area. So we are looking at completion of. You know that now we discussed about the current core of 1050 or something like that. So you add about 40% to that. That’s what we want to execute the in the next year. As far as core is concerned we are on target for that and that should be anything else will be again facility dependent and travel forward with the following year. And that will be covered in our initial predictions detail on 3,000 crores.
So we are on track for that. And as far as breakup is concerned in the different side, the foreign volumes will start taking it in a big way in the next for the next financial year, much more than this year and programs will continue. A lot of programs are maturing and we are expecting a couple of wins in the next one month and going forward for the next and very interesting wins we are having in the next one month almost in the assigning stage. And so we are looking at about 400 crores within the next one month.
And for going forward for the program side and mod we cannot predict anything. It is again as I said role as a dice. But we are working on between you and us, we are working with the world’s largest A company or one of the Most prestigious a company for bidding some of the AI based complete drone management systems and whatever you call it as so that is one thing which is thick upcoming in a big way unbanned account. So can you explain Babu about this? And this is something which we are focusing as far as the mode is concerned.
I don’t want to reveal much but we are working with the number one company in the world and we have a partnership with them. So hopefully that materializes the paradigm shifts will be there in our whole area because these each orders are big multi thousand crore orders. So I don’t want to put this as a excitement or anything. We have keep our fingers crossed but defense is more focused towards it. Babu, can you just throw some light on what exactly the type of tokens. This is a unmanned combat system. So we will be. We are working with the biggest OEM to implement the the autopilot and also to entirely have the mission planning system and also the combat facilities on board the aircraft.
So this is a large program, one of the largest programs. So we are actively participating in this and also there are many more on a similar lines both with the automated autopilot and also with the munitions enabled on this. These are all our activities. These are the first and a. So that is going to be our big focus AI driven and all the inclusion combat systems, unmanned inclusion compared systems. That is the focus and we are sadly we have a very force good partnership and so but as I said see these are like you can treat the chances of 10 or something like that.
I don’t want to give too much of excitement because these orders are very very big and as I said but we have one thing going for us is the partnership. We have probably the best in the world. Okay. And more than best, it’s the most proven in the world. Okay. And. And we have a partnership with a U S company which is proven, battle proven and probably the. Arguably the leader in the combat systems. Okay. Okay. So I. I just don’t want to. So this is our roadmap going future as far as the mode is concerned.
OEM is fine. That could be. That’s going to be very good. And as far as programs are concerned happening. It’s all happening. And as he said money. Next to me is our president. He’s confirming that he’s expecting about 400 course in the next one month new orders for new programs. Okay. So that’s it. Thank you.
Jai Johan
One last question in the queue. There’s one last question, just an update. So basically your manager mentioned that the takan development for Indra was completed and customer approved. There’s a production order, you know, expected shortly. And I just wanted to understand the current status of that.
Sampath Ravinarayanan
Global President Alfonso. Madness.
Unidentified Speaker
Yes, hello. Yes, exactly. Well, you know we signed an MoU in Indra to be the preferred partner in India programs. Akan, it’s already almost finished the deal. We are closing the paperwork now. And we will announce very soon. You know, it’s in partnership between Indra and Centum and us. And the agreement is full now. We will give some details in the coming days. You know this is. But just I want to mention that this is just the first of a very big pipeline of joint opportunities between Indra and Axis cadres. You know this is in line with the Spain, Indra, Spain, India.
Relationships that are flourishing. You know that next week President of Spain is visiting Modi. Strengthening ties from the defense program. And Indra is the leading defense company in my country. It comes to the. So the relationship is excellent. This is the first project. And we have a huge pipeline of opportunities with them.
Sampath Ravinarayanan
Okay. Does it answer your question?
Jai Johan
Okay, understood sir. But I think you mentioned that the development was complete. What led to this deferment?
Unidentified Speaker
No, no. The development is undergoing now. We are doing. It’s in the development and research. And the program. I cannot give you more details on the program. Confidential. But now the initial phase now is development. We are taking not only the role for manufacturing. We are the developers of the part of the TAGAM system. And in very close cooperation and very good partnership with Indra.
Jai Johan
Fine. Okay. Go to doctor.
Shashidhar S K
Okay. Sumit. Yeah. With this we come to the end of the earnings call for the Q3 and nine months of the current financial year. We thank all the participants, our investors and other stakeholders who are on the call. Any queries which you may have, may please direct us. Direct the queries that our investor relations now say a person and you will answer that.
Sampath Ravinarayanan
And I will also invite all of you to come to Bangalore, visit our facilities. We’ll have one on one open house. Anytime you want. Please let us know. We’ll be very, very happy to host you and ask the question.
Shashidhar S K
Thank you.
operator
Thank you. On behalf of Access Gates Technologies Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.