Axiscades Technologies Ltd (NSE: AXISCADES) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Sangeeta Tripathi — Investor Relations
Shashidhar S.K. — Chief Financial Officer
Arun Krishnamurthi — Chief Executive Officer
Alfonso Martinez — Chief Executive Officer and Managing Director
Sharadhi Babu — President-Defence
Anurag Sharma — President, ESAI & Chief Executive Officer-Add Solution GmbH
Murali Krishnan — Chief Operating Officer
Sampath Ravinarayanan — Chairman
Analysts:
Unidentified Participant
Koushik Mohan — Analyst
Jatin Jadhav — Analyst
Karthi Keyan — Analyst
Deepak Poddar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Access K8S Technologies Limited hosted by MUSG NTI. 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 touchtone phone. Please note that this conference has been recorded.
I now hand the conference over to Ms. Sangeetha Tripathi. Thank you. And over to you, ma’ am.
Sangeeta Tripathi — Investor Relations
Thank you. Moderator Good evening everyone and welcome to the Q4, FY25 and the full year FY25 results conference call of Access Cadiz Technologies Limited. I am joined today by our leadership team to provide a brief overview of the business performance financial results along with our strategy ahead. We have the task today. Dr. Sampat Ravinarayanand our chairman Mr. Alfonso Martin, our managing director and CEO Dashman, our chief operating officer Mr. Sashida SK our CSO Mr. Ardak Sharma, our president ESAI and CEO at Solutions along with Mr. Shardi Babu, our President of the films. Before we begin, please note that this call may contain forward looking statements based on company’s current expectations, beliefs and opinions.
These statements involve risks and uncertainties and the actual results may differ materially. Now I hand over the call to our CFO Mr. Sachidair S K Over to you sir.
Shashidhar S.K. — Chief Financial Officer
Thank you, Sangeeta. Good evening everyone and I’m delighted to welcome you all to this earnings call for Q4 FY25 and the full year FY25. I hope you all had an opportunity to review our press release and the investor presentation which are available under the investor section of our website. And the same are accessible in the BSE and NSE websites too. To begin with, despite challenging macroeconomic scenario in certain of our non core verticals, we are delighted to report that we have closed the financial year FY25 with a significant milestone of crossing 1000 crores in consolidated revenue.
While we are recalibrating our automotive, energy and heavy engineering verticals, our growth was led by our focus verticals of aerospace, defense and esci. The full year revenue for FY 2025 was at 1031 crores recording a growth of 7.9% over the previous year in rupee terms and 5.7% in constant dollar terms. While the reported EBITDA for the year is at 142 crores, a growth of 7% over the previous year. The adjusted EBITDA came at 156 crores, a growth of 17% over the previous year. Adjusting for non recurring and one time expenses incurred in Q3 and Q4, our PAT grew by 2.25 times over the previous year at 75.26 crores as against 33.41 crores in FY24 leading to a diluted EPS doubling from 7.74 rupees to 17.22.
The company since Q3 of FY25 under the guidance of our Chairman has embarked on major business transformation initiatives to turbocharge the business and achieve nonlinear product led growth both in revenue and margins in each of our core verticals namely aerospace, defense and esai. The company is also evaluating and recalibrating its non core businesses of heavy engineering, energy and automotive which are till date negatively impacted by macro factors and are growth and margin dilutive to the enterprise. As has been elaborated in our investor presentation, the company is deploying resources and cost for this transformation which is expected to be stabilized by Q2 of FY26.
These costs and investments are critical to ensure enterprise readiness to progressively achieve our aspirational target of achieving a billion dollar revenue by 2030. Coming back to our business performance in FY25 our core domains grew by 12% from 671 crores to to 749 crores driven by aerospace which grew by 13% to 322 crores and defense which grew by 16% to 303 crores. With production revenues from defense growing by 19% to 198 crores, our non core businesses of heavy engineering, automotive and energy together constituted 282 crores in revenue, a 3% degrowth over previous year. Automotive and heavy engineering together D grew by 7% to 238 crores and energy vertical at 43 crores grew by 30%.
On a small base, the core verticals continue to record healthy ebitda margins at 19.1% and it’s been diluted to 13.8%. At an enterprise level due to negative margins in the non core businesses, the reported EBITDA margin is at 13.8% for the year which is the same as in previous year despite the fact that the company incurred one time and non recurring cost of around 14 crores in Q3 and Q4 mainly in senior leadership settlements, legal cost and one time consulting for our automotive business. Adjusting for this, the EBITDA margin for the year is at 15%.
Considering only our core businesses of aerospace, defense and ESAI, our EBITDA margins are at a healthy average of 19.1% with aerospace coming in at 21.2%, ESAI at 23.9% and defense at 15% of the defense revenues of 3, 803 crores. If you only take defense production revenues which was at 198 crores, the EBITDA is actually at 22%. So the prototype revenues of defense at about 105 crores was very marginal and slightly negative from the point of view of EBITDA, we intend to improve our EBITDA margins by about 300bps each year with focus on nonlinear product driven growth in core verticals and realignment of non core verticals.
As stated, our core verticals are already yielding ebitda margins of 19%. With effective execution of product led strategy by FY28, the company aims to invert its current revenue mix of 80% service revenue and 20% product revenue which will be the key driver for nonlinear margin led growth with the aim and objective of achieving an average of 24% EBITDA in the next two to three years. With respect to business performance in Q4 of FY25 the company’s revenue was at 268 crores growing by 4.8% year on year and DE growing by about 2.4% quarter on quarter as the execution of some of the defense programs moved to the right.
The Company’s reported EBITDA was at 37 crores at 14% and adjusted EBITDA was at 45 crores at 16.8%. The company has been able to significantly reduce its finance cost from 56 crores to 32 crores with repayment of borrowings from QAP proceeds. The Company’s net debt is just at about 15 odd crores excluding lease liabilities with gross debt standing at 189 crores and cash bank and liquid investment at 174 crores. The company has a healthy balance sheet with shareholder equity standing at INR 656 crores as against 592 crores in the previous year. To conclude, we are highly enthusiastic and committed on our path ahead.
Our focus on scalable product led growth underpinned by significant investment in infrastructure and leadership positions us for sustained long Term growth. This strategy will enable us to unlock substantial value for our investors and stakeholders. I now invite our CEO, Mr. Alfonso Martinez, to provide his views.
Alfonso Martinez — Chief Executive Officer and Managing Director
Thank you, Sasidar and good afternoon everybody. I’m really happy and pleased to participate in this, my first quarter presentation as a group CEO. Complementing sasid’s presentation and speech, I would like to highlight the transformation of the company that we are currently driving. This transformation is going into three axes as mentioned in the presentation. First is people. I’m very pleased to announce that now our new management team is in place. We have all the precedents in place. We added veterans on the industry in a leadership position for the last 30 years. And this is already starting to boost our relationships with our clients.
An amount of progress is being done in that respect. This will lead no doubt to an impressive growth. We are also starting to train our existing sales force into a new way of selling, new way of engaging with the clients. Second axis of the transformation is moving from traditional services to products and solutions. This is key for the margin expansion that we are forecasting. And third, the investments in key assets with very high return. And this is already, as we will discuss later in the presentation of our Chief Operating Officer leading to a new area.
As a golden rule for next year, I would like to say we have three key objectives. First is a minimum growth of EBITDA of 50% excluding ESO cost. That’s the very, very first target. Second, the profit after taxes will increase proportionally. And third point, we want to increase the quality of our revenues. With that at least 300 basic points of EBITDA percentage improvement. This will lead to all the future. But for this year, these are the three parameters that we are targeting and as a golden rule, we will achieve. Now I would like to lead my president to present you the different verticals.
Unfortunately, Mohana Krisnan, our new president for aerospace is not present. He’s in a very important client meeting today. And I will take this part. Starting by aerospace, I will say that our target for fiscal year 26 is at least 35% growth in revenues. That will change the path of growth of the previous years. Deepening engineering expertise now empowered with artificial intelligence. Moving from traditional service to really disruptive solutions. Some of our services are already ongoing this transformation with extratacular results. Also we are building manufacturing and supply chain solutions. This action is particularly driven by Mohana Krishnan that brings with a strong background in these areas of manufacturing and supply chain, our current HERBAS engagement.
Our number one client in aerospace, we as a strategic supplier Are long term settled with debt. We are about $40 million of jury revenues. And this is a long term established. We are also discussing to expand this partnership from these areas into new fields. I’m also forging new partnerships with the OEMs and tier ones of aviation. As you can know, India has become the center of gravity of commercial aviation. And that’s a very, very important point in our strategy. Said that I led the word to Sari Babu in defense. He will explain you the keys of these vertical please.
Sharadhi Babu — President-Defence
Thank you, Alfonso. Good evening everyone. This is Shi Babu, President of Defense at Access K. And as you heard, we have created a very strong base for with a stellar performance at 303 crores. And we continue our focus on defense production and also very specific focus on new product development especially in the areas of radar, electronic warfare, missile systems and unmanned warfare systems. And we right now we are on a very strong growth path. And we expect the growth be at a rate of about 75% moving forward. And also a similar focus on the bottom line also.
And our order books are now reaching about crores. And we hope this emergency procurement also will actually have some success for us. And then going forward we’re looking at a very, very strong defence growth. And also we are having a very strong practice going on at the OEMs. And there are many programs coming up at the OEM level. Overall we are looking at addressing the entire DRDO and also the MOD practice and also the OEM programs. And with that I would like to hand over the session to Mr. Anurag Sharma who is the head of our Electronics, Semiconductors and Artificial Intelligence.
Thank you.
Anurag Sharma — President, ESAI & Chief Executive Officer-Add Solution GmbH
Hi, good evening everyone. I am Anurag Sharma. I am president of EFAI which is. Which is basically Electronic Semiconductor and Artificial Intelligence wing of Access Kinetics. Now you will. I would like to tell you that why three? What is the combination of these three? So this is the combination of electronic, semiconductor and artificial intelligence is the one which is churning out the fastest and most innovative products across the globe. And this is the space where we already belong. And we are. We have a very robust pipeline. In terms of the order book, we are close to 600 crores plus of order books. With us we are doing a growth of 60%, more than 60%. And speaking more specifically on the products, we have lot of focus on products. Products are not new to us.
We have been doing products but now we are offering complete system level products. And for that we have taken a new initiative. We have started a product development center in Fremont in California. Where we have multiple products which are being conceptualized, developed, tested and then manufactured across the globe. We also have started a lot of sales reinforcement in Europe with our headquarters being in Germany and we are trying to set up product sales ecosystem across various channels resellers and so the idea is that our both products and solutions shall reach to maximum clients. We also have our company edited solution in Germany where we are doing a lot of wiring harness development and also specific products like Microdata center and also solutions like thermal management.
So all these initiatives are we say a view to increase our presence in this sector across the globe and increase our revenues. So with that I would like to give the mic to my colleague and COO, Mr. Murli Krishnan.
Murali Krishnan — Chief Operating Officer
Thank you Anurag. Good afternoon ladies and gentlemen this is Murli Krishnan, Chief operating officer of Access Cadets. We have seen vision in our Chairman’s statement which is there in our investment presentation. We have a vision to become a billion dollar company in 2030. We call this as Power930. As a COO I take the responsibility to carry out this vision.
This vision is also coming up with a high EBITDA of 24% and this question is going to be driven by flipping our product versus services. Revenue from today at a level of 20% product we are going to move to 80% product and solutions based organization. So in order to enable this I do three things. First, enable the organization to deliver the AOP with the right processes, with the right resources. Two, transform the organization for the future and three, provide world class facilities and resources to take up our power 930 vision. This infrastructure is going to come up in two places.
One, he’s called us DAC Devanagalli Atmalurbar Complex at Bangalore which is a 20 acre facility. This is going to come up in three phases. Phase one is going to handle radar and electronic warfare solution development, manufacturing, testing, maintenance. Phase two is for missile complex, missile MRO as well as missile manufacturing. While missile MRO would happen at Bangalore we also are planning to set up another facility at Hyderabad to establish our presence in missile manufacturing. Phase three would come up with MRO, speed shop and supply chain facilities for aerospace and defense customers. We want to construct these facilities in three years time.
First phase will come up in this financial year itself. This facility of phase one would cost 250 crore and the first phase one yay of it would cost 120 crore which would be mostly through internal funding. We are also looking for strategic partnership for the infrastructure development which is through a Company called AAIPL Access Aerospace Infrastructure Private Limited.
With this I request our chairman to say the concluding remarks on our speeches. Over to you sir. I think he’s.
Murali Krishnan — Chief Operating Officer
Thank you Mr. Lee. My colleagues have covered all the aspects. I set the goal for the company brought in the team of capable leaderships leadership team who can deliver the goal. However, I’ve tasked myself with the following. One is to create a robust silo or funnel that leads to a pipeline and wins to achieve the power 390. So I’m tasked myself with that. Creating that silo contacts everything that leads to the this goal. So which has to be done in the next two years so that we can deliver on the third, fourth and fifth year the goals while the AOP keeps going on.
Second is as Murali mentioned ensure our DAC map projects are completed on time. For that we need resources and funds. So my job is to organize that without any dilution. So the land is owned by a company, one of our group companies I should have known called a IPL Access Aerospace Infrastructure Private Limited. We are trying to leverage or bring some strategic partnership into that. And I feel this this is one of the options as we also mentioned that 1a we are splitting the whole approach into three phases. One year we are pretty much covered.
So rest of the things we have to organize so we have time to organize. Okay. The third thing is fourth the long term partnerships and relationships to achieve this hope to get the more the work from for the work as well as us for the completion of back and back projects. So this will also have a sustainable growth and achieve the 930 in a sustainable way. So with this I will be. We are ready to take the question. So I’ll hand it over to Sangeeta who can just organize the questions. Thank you. Thank you all.
We can start with the Q and A.
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 N1 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. The first question is from the line of Kaushik Mohan from Ashikagu. Please proceed.
Koushik Mohan
Hi sir. Thanks for the opportunity and great set of results. Can you just understand this one time. Cost on the P and L that we have it on more clarity basis.
Shashidhar S.K.
Yeah. So Kaushik, thank you for the question. See essentially as what I explained in my speech we went on a complete transformation initiative from Q3 onwards. And one of the major parts of this is kind of complete overhaul of the leadership team and essentially the cost, major cost with respect to the 14 crores which I mentioned pertains to it not only was in India, it was also across globally where we had to kind of do a kind of a voluntary separation for our leadership, including the previous CEO and various other leadership positions across the globe.
So that. And also we had to incur certain one time legal cost in the course of a few exits, so to say. And then we also took a specific consulting, you know, from Zino with respect to our automotive business which you know, I would say especially for ADD solutions in Germany, all of this amounted to 14 crores which in a way are non recurring in nature which will not repeat next year.
Koushik Mohan
Got it. And sir, the second thing, currently in this quarter we have achieved around almost around 16.8% EBITDA margin. And we are talking about the target. Of power 930 where we are talking. About a 24% EBITDA margin. So what are the key levers which. Will play out in this specific margin. Increase and how is that plan towards achieving that? And also can you relate this with the 8020 rules that we are talking about product as well as the solutions?
Shashidhar S.K.
Yeah. Before I hand it over to Alfonso and Murali to kind of state detail on this, I would like to say that while our kind of a blended ebitda is at 13.8%, you would observe that the three main core businesses where the future growth is going to come is already at a 19% EBITDA. If you look at aerospace, that’s at 22%. And if you look at E5 that’s also at about 23% less. And if you look at only the defense production, that’s already at 22%. So the approach is to take it from here and drive it towards the product line approach.
And I will ask Alfonso to kind of say, and also to Murali if they want to delineate on how this entire drivers are going to work out.
Alfonso Martinez
Yes, exactly. As Sashi said, it is mainly driven by our focus. Our focus in aerospace, defense and ESI will bring this margin improvement. You see, as I said, we are running there around 20% in combination this year. But specifically also the trend is only at 15% and we will expect for next year, for fiscal year 26 an expansion of that EBITDA margin very clearly. So it’s a combination of keeping improving the balance between Core and non core and of course also increasing the quality of our revenues and we are very, very much secure on that.
I don’t know if you want to complement Murali or more or less. This is.
Shashidhar S.K.
Yeah, thanks Alfonso. I think you are right. So once we focus on products and increase the share of our products, their EBITDA margins are improving, are going to improve also the uniqueness of the product. So if we are the only supplier and if our products are innovative and unique, the margins are going to be higher. That is the way we want to go forward. 80:20 is the is the way where we will increase our EBITDA. So chairman may please add it. You want to have any comments on this?
Sampath Ravinarayanan
No, no, I’m fine. As we said that this is a goal. We have said as explained, we are already at 19.2% in the core verticals. And difference is also if you take only the defense product solutions without taking out the one time development cost, it is at more than 20%. So we should be fine if we keep the focus and that’s what we are planning to do. Thanks for this sir.
Koushik Mohan
I’ll come back in the queue.
operator
Thank you. Before I take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Jatin Jadhav from Sahasra Capital. Please proceed.
Jatin Jadhav
Am I audible?
Shashidhar S.K.
Yes.
Jatin Jadhav
First of all, thank you so much for this opportunity and congratulations on a great set of numbers. I have two questions. One is sir, can you again briefly explain me the phase one, phase two and phase three in brief. And so my second question was regarding phase two. If I heard it correctly, you were trying to build a facility for missile missiles, MRO and manufacturing. I wanted to understand what kind of missiles are we targeting to manufacture for the defense for the defense clients and what kind of MRO facilities are we trying to build over here for existing missile systems or probably future missile systems.
Shashidhar S.K.
I will take the questions. Basically phase one is meant for all the electronics, strategic electronics that will cover unnormal electronics also. But that will cover in the. So that also includes radar, electronics, warfare, strategic electronics and E5 electronics. So that should cover pretty much our strategic electronic group and E5 group. So that will have manufacturing facility and high level test facility including Anakite Chamber, etc. Which the very rare availability in India. And it will also have a large hangers for maintenance, radar assembly, etc. So that means radars are widely Used for example. I’m just giving an example.
Some of the Abacs use large radars that can come in and then tested. This will have white hangers to be test all these things. Those. This is phase 1A. So this will cover radar, electronic warfare, all the other strategic electronics and normal electronics manufacturing, testing, assembly and so on. And so the phase, the phase two we talked about is missile. Missile has two parts missile. We maintain the launches. When we say missile maintenance there are two parts. Launchers and missile transportable test sensors where the missile can be assembled. The four components of missile can be assembled at the war zone or wherever it is.
So these are some of the ecosystem we are building. And also we are building the ground systems. That part may happen in Bangalore but the main the missile part missile. When we say missile manufacture this is more like an assembly. Some parts we are planning to manufacture including airframe including rocket motors and even the munitions for missile at some point of time. Warheads and then the nose cone, the front part and of course Nitra electronics, that’s onboard computing etc. So this will happen in the whole integration will happen in Hyderabad. We are targeting to manufacture more.
We are focusing on smaller missiles which is more into air to surface and so on. I don’t want to reveal too much but this will be the focus on the middle side and third is MRO Speed shop and manufacturing will be focused on dual use that will be mostly for both aerospace and defense. There are many aircraft, for example Boeing aircraft are used for. Boeing 737 is used in defense as well as your Airbus is used both in the. So there are cases where there are a lot of dual use aircraft and helicopters. So we’ll be doing maintenance of the parts, both the avionics and engine parts and some kind of some part of airframe and manufacturing and supply chain for this.
This will be phase three. So except the missile related activities, missile assembly everything will be in Bangalore which will be deviantly Atmadbar complex missile complex that will be in Hyderabad that will come up in a six acre facility which are yet to buy. We are in the negotiations with the Telangana government. Are talking to the Telangana government. Not here. We are already. We have the acquired the land and we are starting off the work. We are in the plan approval stage at this stage.
Jatin Jadhav
Okay, thank you. Thank you so much sir. I’ll get back in the video. Thank you.
operator
Thank you. The next question is from the line of Karthi from Suyash Advisors. Please proceed.
Karthi Keyan
Good afternoon. Thanks for the opportunity sir. I just wanted to understand the visibility for the revenue growth guidance that I’ve given 35% for Aeros, which is 60% for defense and 75% for each side. I hope I got those numbers correct. Just wanted to understand how much of this is contingent upon maybe order whatever or customer approvals to go ahead and how much of this is, shall we say, routinely on that.
Shashidhar S.K.
So I will. Alfonso, would you want to talk about aerospace first? Followed by Shirley Babu on Defense and then of course Anurag, who will explain about. Hi.
Alfonso Martinez
Yes. On Nairo Space we have a base of revenues that is secure with our current customers. Luckily, both customers are in a good shape and the revenues that we make this year is nearly secure for next year, plus some expansions. So that’s securing a part of the growth in aerospace also. The rest is coming from the pipeline of opportunities that we have now. It’s a pipeline we started to build in the basically when I joined. And then we are now weighting the pipeline and with the secure revenues plus the weighted pipeline, we are nearly 90% of the secure on the revenue increase.
There is always, you know, we are starting the year and there is always some deals to be won along the year. And I hope that we are putting a lot of hope in the Paris. Airshow in which we will participate. We may have announcement of some important deals that will come in the aerospace side. So basically it is an estimation that we are pretty much secure and we are very confident on getting this 35% growth of revenues in aerospace. They also maybe. Barbara, you can complement the retail side.
Karthi Keyan
One quick question. How much would be the two customers contribution?
Alfonso Martinez
The two current customers? Yes, yes. That’s nearly a similar revenue to this figure. So if it is a 35% increase, you can make the match very easily. In the current customers we are spending about 10% basically.
Karthi Keyan
Sure.
Alfonso Martinez
Coming from the pipeline with new customers. When I say new customers in Airbus, that is very big. You know, Airbus is a full ecosystem. You know, we have one current customer in Airbus, but Airbus is a very big group and we are expanding into new areas as well.
Karthi Keyan
Sure, sure, I heard you. Thank you.
Shashidhar S.K.
Thanks. Covering the defense part, the defense growth is coming from the much of our defense production where we are, as you know, we are already we are part of the lca. So. And also the AVAX program and also multiple our both the radar and DW are going on multiple platforms. So production is from different all these programs. And also we have the MOD programs we have. We are implementing a large land systems defense program in the coming Year and also we have the OEMs. The thing has opened up with various activities happening and the new procurement from defense has triggered a lot of OEM programs.
So the much of activity is also happening on the OEM global OEM programs. So it is spread across all these three areas.
Arun Krishnamurthi
And also I just want to clarify the question was little wrong that defense is 75% and Lisa is 60%. That that’s all. Okay, thank you.
Shashidhar S.K.
And also the counter drone systems where we are in the forefront and we have already supplied 100 systems to the defense. So we are expecting repeat orders. And also the new programs there are lot of things, you know the counter drone is the most wanted system across the defense now. And then we are at the. We are leading this entire program supply of these Condor drone systems to the Indian defense.
Karthi Keyan
Right. So if I may clarify what would be production revenue in FY26? You did 190 roughly in FY25. So.
Shashidhar S.K.
Production revenue is this year. FY25 was around 196 crores. Yeah, you’re talking about now probably doubling it in FY26.
Karthi Keyan
Okay, thank you.
operator
Thank you. The next question is from the line of Nishid Shah from Ambika Fincap Consultants Private Limited. Please proceed.
Unidentified Participant
Yeah, hi, this is Dhruv. Your congratulations on a good cell number. Just. I have just one clarification. On the defense side, the deal we announced. Could you hear me? Can you hear me? Hello.
Shashidhar S.K.
Yes we can.
Unidentified Participant
Yes sir, I just had one clarification. On the defense side, the deal we announced on the test bends is any revenues included in the growth which we are seeing 75%.
Shashidhar S.K.
Yes. Which deal you are talking about? You’re not able to.
Karthi Keyan
The MBDA deal which we announced in January for the test bench is. Have we included any revenues from that?
Shashidhar S.K.
Sir, I. Babu, can you answer this?
Sharadhi Babu
Yes, yes, we have. We have revenue feedback program in FY26. Yes sir.
Unidentified Participant
Okay. That’s it. That’s it. Thank you so much.
operator
Thank you. The next question is from the line of Deepak Podar from Sapphire Capital. Please.
Deepak Poddar
I’m audible sir.
Shashidhar S.K.
Yeah.
Deepak Poddar
Thank you very much sir for this opportunity. So just wanted to check, I mean our 9,000 crores kind of a target in next four, five to six years basically. So that kind of equates to about 40, 45% kind of a CAGR over next five, six years. So just wanted to understand. Do you expect this growth to be evenly phased over the years or do you expect it to be front ended, back ended? I mean what Sort of thought process you have on that.
Shashidhar S.K.
Yeah, I’ll take this question. This year 1t0 beginning this right now, this will be a normal year. The AOP will be met. As CEO mentioned we are looking at a 50 EBITDA growth and proportional this year. And because we are 60% should be ready. So some traction other than the AOP figure something towards will come next year. But the third, fourth and fifth year. Fifth year I think we will ramp up faster because by that time most of the DAC will be completed. Math will be completed. All the third phase will be almost on. So all the lines of revenue streams will be ready.
So I think it’s still a vision but I would say that very much possible.
Deepak Poddar
Okay. And this year we are targeting 35% growth at the company level.
Shashidhar S.K.
This year we are not looking at revenue per se. The revenue will be 33% I guess. But I am saying profit after adjusting to with because we have a cost, huge cost on ESOPs. After adjusting our EBITDA still can be around 50% growth from the current level and path will be proportional and EBITDA margin will be at least at 17% so average. So you can do the math. What should be the revenue and what should be.
Deepak Poddar
And what is the FY26 ESOP cost?
Shashidhar S.K.
They expect around 50 to 60 crores.
Deepak Poddar
Around 50. 50 to 60 crores.
Shashidhar S.K.
Yeah.
Deepak Poddar
Okay. And what is the tax rate? I mean, I mean this tax rate. We have seen something.
Shashidhar S.K.
Yeah.
Arun Krishnamurthi
So we have now moved to the new tax regime. Of course as you know we have global operations and each of the, you know I would say our global operations have a different no tax rate. But in India we have moved to the new tax regime at 25.82%.
Deepak Poddar
So 26% is effective taxes we can expect at the country level. And what was the one time provisioning cost in fourth quarter? It’s just the last question.
Shashidhar S.K.
Yeah. One time provisioning. I didn’t get you one time cost in fourth quarter.
Deepak Poddar
You’re just one time cost in fourth quarter. What was the out of this? 14 crores. What was the cost in fourth quarter?
Shashidhar S.K.
The fourth quarter was around 9 crores. 9 crores. Let me correct myself.
Deepak Poddar
7 and a half. Okay, that’s it from all the very best. Thank you.
operator
Thank you. The next question is from the line of ASTA from PK Advices. Please proceed.
Unidentified Participant
Hello. Am I audible?
Shashidhar S.K.
Yes, you are.
Unidentified Participant
Yeah. Thank you for giving me the opportunity to ask the question. So first I want to ask you. We saw the slowest growth in the in this year in FY25 compared to last 3, 4 years. What was the reason? I mean what happened? We saw 13% growth in aerospace which was again slower than compared to previous years. And sir, in the similar line I want to ask you what was the revenue growth in automotive segment?
Shashidhar S.K.
The automotive segment, you know talking about the revenue growth as such. You’re right. The core businesses is, you know is where the actual growth happened. And most of the, you know I would say management bandwidth as well as, you know I would say our efforts were getting into ensuring that we reset the non core verticals and we were exposed to the macro factors especially in automotive. Just to give an example, the acquisition which we did of LED solutions in Germany I would say Volkswagen was a mine customer which there was a huge degrowth there. So we did not achieve the objectives.
That was the issue there. And also with respect to the acquisition that we did in energy of efcogen is yet to hit critical mass as a result of which the non core verticals I would say impacted the overall growth in terms of the business. And as to the automotive vertical, the total automotive revenue of 91 crores. 90 crores as against 104 crores which we recorded in FY24.
Unidentified Participant
But even aerospace grew only by 13%.
Shashidhar S.K.
Whereas if I see from FY22 to 24 it has grown pretty well. Yeah.
Shashidhar S.K.
So because we, you know I would say we had some new programs which we started implementing.
Sangeeta Tripathi
That is written. Okay, that is clear because there is a complete lot of orders were held back as a result.
Shashidhar S.K.
Yeah. So just to. Just to elaborate on what Dr. SRN just now stated. If you look at the period from FY23, if you look at FY22 which was the period of COVID the revenues dropped by 50%. So when the COVID the growth came back, it came back with a vengeance. So that kind of stabilized in FY24 and onwards.
Unidentified Participant
Going forward should I expect 13 to.
Unidentified Speaker
15% growth as my aerospace growth?
Shashidhar S.K.
So I think.
Unidentified Participant
I’ll take the question madam. This year we are expecting as my. Our CEO on behalf of Mohan said 35%. If I can give the figures approximately we did about 300 around $38 million in aerospace. We are targeting about $51 million this year approximately. Okay. So we can expect and we are looking at a similar or better growth next year because we’ll be adding products and solutions to this. Okay, got it. So my next question would be is. It possible to set.
operator
I request you to return to the question queue as there Are several participants waiting for their turn?
Unidentified Participant
Sure. Thank you.
operator
Thank you. Before I take the next question, ladies and gentlemen, to incorporate all questions, I request you to limit your questions to one question per participant. The next question is from the line of Nirvana Laha from Batrinath Holdings. Please proceed.
Unidentified Participant
Hi, thanks for the opportunity. My question is regarding the ESAI segment. So if I look at the revenues this year, they were flat. We are guiding for I think 60% growth in EBITDA next year. So can you please elaborate on what programs or what clients will help us drive this? Some details on where we can, you know, understand what tangible programs or clients will help move. This will be very helpful.
Anurag Sharma
Yes, of course. This is Anurag Sharma here. So you see that we have a, we are basically also doing a revision in our school where we are moving towards product driven growth. And in that context we have introduced some new products also in this year. And that is why we are very much confident of this growth which I spoke about. So we have, we already, we are doing certain type of products for our OEM clients in the semiconductor segment and we were doing high end electronic design and the PCBAs. But now we are doing our own system level product which directly go into the market.
So this is something which is a renewed strategy and very effective one and that will, that gives us the confidence to move forward. Thank you sir.
Unidentified Participant
Just to follow up that. So 60% EBITDA growth. Do you already. And I think we reported 24% EBITDA margins this year. So the EBITDA growth, how much of that will be driven by top line growth and how much will be driven by further EBITDA expansion? If you already have some plans around that.
Unidentified Participant
So you’re talking about ESI or you’re talking about the company?
Shashidhar S.K.
No, ESAI. ESAI is 125 crore revenue, I believe with 30 crore EBITDA. So 60% EBITDA growth that we are targeting. What will be the split between the revenue growth in ESAI and further EBITDA margin expansion?
Unidentified Participant
This is mostly coming from the revenue growth. So we are going to substantially increase the revenue.
Shashidhar S.K.
See we have added a lot of new logos earlier. There used to be 2, 3 logos which were kind of focused with respect to the entire ESIR revenues. Now we added, we are adding quite a lot of new logos especially in the US region which is going to take this forward.
Shashidhar S.K.
Yeah, if I may compliment, the revenues flow in ESI in the previous year has been delivery led. It’s basically the sales done many years ago. And we have Continued and what we have done now is really boosting the sales and the relationships with the clients together with a new product strategy. So by, you know, the continuity of the current revenue streams is there. But on top of that we are adding new OEMs, new clients, et cetera and new product range. That has not been done in the company for the last years. This is a new era now.
Unidentified Participant
Please go ahead. Additionally had only two silicon manufacturers which have brought in 80% of the revenues. Now we are adding about three or four more silicon manufacturers to work with number two, we have taken a strong China plus one strategy and the tariff plus one strategy. So that means that we are going wherever there was a replacement activities are required. That has boosted our order book the entire 60%. We can say is almost 90% of this covered with already an order book right now. It’s a good question of execution. There are. There is a robust pipeline and customer base.
We have some marquee customers. So basically these three things give us a confidence and the EBITDA growth is proportional. There won’t be a video BIPS growth now there is no basic point growth. The EBITDA will remain almost the same percentage but there will be. It will be a result of revenue growth. Revenue growth will be. Revenue growth will be there. Also there is a small element of ESA in with MITSA with everything is being. Thanks a lot.
operator
Thank you. Before I take the next question I would like to remind participants. Please remit your questions to one per participant. The next question is from the line of dhawal chains from Sequent Investments. Please proceed.
Unidentified Participant
Hello sir. So I just wanted to understand the contribution for from our core business going forward. Because right now what I see is out of the total contribution that we have in Aerospace is 31% defense is around 29 and ESAI is around 12%. So moving forward, how is this mix going to change? Is it going to be evenly split or is defense going to be more contributing to the core? Let me answer this question and I’m and I’m so Ravina is here. So this is around. We are expecting at 2028 we are expecting non core aside we are looking at 40% in different somewhat 30% in SI and 30% data space.
That’s a mix we are expecting at this point of time with the visibility among the core activities. Okay. Also one more aspect of it I might have missed out on. So I just wanted to know about the capex that we are doing for the the three phases that we are going to put in. So I See that we are going to put around 250 crores in the phase one with phase one a contributing 120 crores. So can I have the understanding of how you’re going to fund the phase 2 and phase 3 and what will be the total capex overall? Phase 1A in phase 1 we have divided it as phase 1A and phase 1 phase pretty much is that is 120 crore that we are already allocated.
45 from our internal goals. I’ve been allocating more internally this one. We always require external funding which our main focus is going to be on this dynamic partnerships for development of the whole thing. That’s, that’s what it is. Okay, I’m. We don’t currently have the entire capex that I mean the entire amount of what we’re going to plan in or is it going to come later stage?
Shashidhar S.K.
You see as, as Dr. SRN explained what we have on the radar and which is under development, where the plan is at an approval stage is the phase 1A where the capex including the building as well as the equipment is going to be anywhere between 100 to 120 crores of which most of it, our objective is that most of it should be through internal accruals. As I already mentioned the company is sitting on cash reserves. At the same time the generation of EBITDA in FY26 is also going to support that. So that is how the Phase 1A is going to be funded and onwards.
You know, basically as what Dr. Was explaining, we are working on partnerships where you know there can be a contribution from the, you know, the partner who we negotiate with the OEM which will take this entire CAPEX forward.
Unidentified Participant
Okay, okay, thank you.
operator
Thank you. The next question is from the line of Ruchita Cardgay from Iwealth management. Please proceed.
Unidentified Participant
Hello sir. Very good evening. So sir, my question was essentially on. The CAPEX part only. So on the phase one that we’re talking about, so the phase A I understood. Could you please reiterate like on the phase B, what would that be and by when do you expect the A and the B to come and how much revenue can each at the peak capacity contribute?
Shashidhar S.K.
It’s already started somewhat the planning approval etc. We hope to complete the phase one year by some of this year and moving by January 15th at the latest. So phase one is on track. Phase 1B as we conclude will have certain level of, we call as manufacturing shop and some kind of activities for supply chain and inspection equipment. And so these are this will come in that more towards aerospace to take care of some of the aerospace activities. More onto the one time development, one time manufacturing of aerospace parts. Just to explain to you, around 90% of the OEM spent that is, you know, you are going under ecosystem and their whole entire money with.
Unidentified Participant
Hello. Yeah, I think you can take the question. Yeah. Yes.
Shashidhar S.K.
So as explained, so there is phase one which is about one year away. So we are able to complete that and then we will move and start operations next year. And phase two and three which are for missiles as well as for the MRO and speed shop that will come in the subsequent. Yes, and about the phase one, if you could tell that what is the. Kind of peak revenue that we can. Expect in the phase 1. So this will be a part of our upcoming AOP and phase 1A is more related to radar. So we are expecting a, you know, just to add to what Bully said, we are expecting a healthy kind of an asset turnover here at least by 2 to 2.5 times is what you know, we can expect.
Unidentified Participant
Okay, and how fast can we ramp this up?
Shashidhar S.K.
Will start as soon as the facilities are ready and our plan says beginning of next year that will be ready. You know, sometimes, you know, today’s supply chain of equipment and so on is difficult to predict, you know, but we are very confident that beginning of next year and we have some client discussions also. So revenues will start to flowing early as soon as the facilities are ready. The pipeline is very big and we are more or less securing the contracts in parallel to the investment in the phase 1A. You know, so that will boost specifically fiscal year 27.
You know, it’s very difficult. These facilities are going to be already at the end of this year. So the impact will be in the subsequent years. The return on capital expenses is very high in everything we are planning. This is for phase one basically. Next phases are depending on the customer negotiations and the client partnerships that we are closing in this year. As long as we will be announcing the partnership, the investments will be also putting in to know of the community.
Unidentified Participant
Okay, understood. And with the ESOP cost, what Was that for FY25?
Shashidhar S.K.
The esophage for FY25 was kind of marginal. It was, you know, less than 5 crores. Let me say.
Unidentified Participant
Understood, understood. And then just, just to you know. A follow up on this. Yeah.
operator
We are so sorry but there are a lot of participants waiting for that all. Yeah, yeah. Thank you. The next question is from the line of Aman Rich from ASU Investment Management. Please proceed.
Unidentified Participant
Yeah, good afternoon sir. My question is on the different side. So could you give some more clarity that till last quarter or maybe 12 quarters back we were talking about 30% kind of production growth. But what has changed in last 12 quarters that we are now talking about 100% growth in our production revenue. And then if you can talk about some of the interesting programs which is coming up which is helping in this. Is this the Netra program. And if you can give any update and also on Counter drone and if you can give on these three programs.
Shashidhar S.K.
Sure. Mainly the defense program the production is coming from. As I mentioned in one of the previous answers, there is a ramp up in production. We are actually significantly contributing towards the production of the LCA, the SU30 upgrades and also in the Avax. And also we are having the direction finding the system is going on multiple platforms. So much of the production is happening in this direction. And also there is a nice expiry deliveries. In fact we have the orders, it is execution which is actually more where we are focusing and enhancing it. And also we are with the culmination of the new orders from the OEMs like the Marian Rafal and others are also expediting our oem expanding our OEM footprint.
Okay, so we already working with many global OEMs and there the expansion is happening on. You know, on an accelerated mode and in the mod. So we are number one we have a couple of. We have. We have. We are implementing land system project and also we expecting this emergency procurement to lead to certain quick supply of systems where we are expecting this emergency procurement. And also maybe there will be one more iteration also will actually contribute to our revenues.
Unidentified Participant
Clarification on the emergency procurement part. What kind of contribution do you think can come from that? And sorry, this 230 and AWACS. So these programs were supposed to come in FY27. So is it getting preponed or when you are talking about so many programs, all of them are coming in FY26.
Shashidhar S.K.
There are. There are some systems subsystems already. The. The production is going on and then deliveries are going on. Some of them are actually coming up in this year and start some quantities next year. And also the emergency procurement. There are 10 lines of items the Indian MOD has embarked upon acquiring in a quick succession. And we already fielded our equipment in four categories. And then at least we have very, very high confidence that we should be able to win one of them and know. And also the same will also repeat in a very quick succession down the line.
Unidentified Participant
Sorry again. What is the order? We are expecting from EP emergency to come in the next 12 years.
Unidentified Participant
Now I will not be able to disclose the values but we are hoping for a sure wings.
Shashidhar S.K.
Okay, thank you.
operator
Thank you. Thank you. The next question is from the line of Pankaj Parag from Molecule Ventures. Please proceed.
Unidentified Participant
Hello. I’m audible. Yes. Hello.
Shashidhar S.K.
Yes, you are.
Unidentified Participant
Yes, yes, thank you. Thank you for the opportunity. So my first question would be on the recent traction in the anti zone system. So what kind of a new opportunity. That we are seeing and are we. Developing any new system and except from the existing system in anti drones?
Shashidhar S.K.
Yes, we are actually expanding our anti drone systems offerings. We are in the counter drone systems. We are already in the man portable drone systems and now we are often at the handheld systems also. And also we have worked on the many vehicle mountain that we have offer the vehicle mounted systems also. And going forward we are actually creating our own internal portfolio of long range and programmable jammers and also and future add on integrate our own radars. So we will be offering a full suite of counter drone systems including all the sensors and the kill options.
Both the software sensors and soft kill, hard sensors and hard kill options, all of them will be part of our offerings. So it’s a pretty interesting portfolio of products and also very good pipeline coming up. And already we are in the forefront of countertown systems in the Indian context. And also we are expanding globally also.
Unidentified Participant
And sir, can you please elaborate some of the order in the counter door system in FY26 that may be converted into revenue? Yeah, the values we are not able to disclose. So I mean but I’m sure control systems will be part of our revenues. Okay. So we can safely assume that the order, the amount of the revenue will be substantially higher than FY25. I guess so. Yes. Okay. And my. Yes, please continue.
Shashidhar S.K.
Just to complement what Mr. Babu said. It is not only the products that we are developing, it also the recent success that we have last year in countertron systems here in India has drive the attention of some international companies that are looking us as a main partner to develop. So this will accelerate because as you can imagine developing our own products take some time. But what is going on is that now we are now about to announce very soon a very good partnership on these systems with the leaders companies, you know. And as you know I come from Europe and there we are experiencing a lot on drones.
And what we are, we are doing is partnerships with companies that are combat proven systems, you know. And that’s why we are putting a lot of bets on these contact drone and even drone system. So this is where we are super confident. I’m sorry this is defense. We cannot disclose the opportunities we are dealing with and the conversations we are having with the international OEMs and also the Ministry of Defence here in India. But we are super confident on a big boost on these revenues.
Unidentified Participant
Okay, and next question is on EFI segment. So we have a good jump in the quarterly revenue for this quarter in the ESS segment. And so you also mentioned 600 for order book. And so can you just elaborate the what is the portion of the chip to product division that we are trying to develop and how we are progressing there any new product addition in the pipeline or anything on that. So for ESA there are multiple products in pipeline starting from millimeter wave radar, drone controller as well as no other radar systems such as Provol radar and ground penetration data.
Unidentified Participant
Does this contain our order book of 600 crores?
operator
Hello. Sorry to interrupt. Mr. Pankaj. Due to constraints we’ll have to take this as the last question.
Unidentified Participant
Thank you.
operator
Thank you. Ladies and gentlemen. In the interest of time, this will be the last question and would now hand the conference over to the management for closing comments.
Shashidhar S.K.
Thank you everyone. Thanks to all our esteemed leaders and participants for your time and interest in our company. We appreciate this engaging session and insightful questions. Should you have any further questions or need any additional clarification, please feel free to connect with us. Thank you.
Shashidhar S.K.
Thank you. Thank you everyone.
Sharadhi Babu
Thank you.
operator
On behalf of Access K8 Technologies Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.