Centum Electronics Ltd (NSE: CENTUM) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Nikhil Mallavarapu — Executive Director
K. S. Desikan — Chief Financial Officer
Analysts:
Unidentified Participant
Jyoti Gupta — Analyst
Rupesh Tatiya — Analyst
Chirag Kachhadiya — Analyst
Nirali Gopani — Analyst
Sreeram Ramdas — Analyst
Ankit Gupta — Analyst
Pranav Shrimal — Analyst
Harsh Mehta — Analyst
Jay Jesrani — Analyst
Anshul Saigal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Centrum Electronics Limited Q4FY25 earnings conference call hosted by Nirmal Bang Equities Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Jyoti. Thank you. And over to you, ma’ am.
Jyoti Gupta — Analyst
Thank you, Anushka. Good afternoon everyone. On behalf of Nimalbung Institutional equities we welcome you to the Q4FY25 earnings call. With the management of Centum Electronics Limited we have with us Mr. Nikhil Malabarapu, Executive Director and Mr. K.S. desikanth, Chief Financial Officer. Without further ado, I would now request Mr. Nikhil Malavarapu sir to start with his opening comments after which we can open the floor for question answers. Thank you sir. And over to you, sir.
Nikhil Mallavarapu — Executive Director
Thank you Jyoti. And good afternoon everyone. Warm welcome to all of you to our earnings call to discuss the performance of the fourth quarter and financial year 2025.
Let me first mention a special thanks to our host of today’s Con call at Nirmal Band. Now let me start by briefing you on the key performance highlights for the quarter and the year under review after which our CFO Mr. Desikan will take you through the financial highlights. In the fourth quarter under review, we delivered a strong performance with consolidated revenue from operations growing by 24% year, year on year and 31% sequentially. This robust growth was primarily driven by a strong performance in our built specification of BTS business especially with our domestic defense and space customers.
Additionally, our EMS business maintained a solid momentum and contributed meaningfully to the overall growth. EBITDA and EBITDA margins at a consolidated level grew well driven by higher billings in the BTS segment. Looking at the full year, consolidated revenue grew by 6% year on year. However, it is important to note that certain contracts accounted on a net basis rather than on gross basis. And on a gross basis, these contracts were valued at approximately 82 crores resulting in a gross revenue growth of 13% year on year. While standalone revenues grew by 18% year on year. The subsidiary revenues declined due to softness in certain customer segments for the full year.
While margins in our core business improved, we faced some headwinds from our Canadian subsidiary. We are taking decisive actions to address those challenges. In our French engineering services business, we’ve initiated certain cost optimization measures and are shifting focus towards defense and aerospace customers as we believe this will enhance both utilization rates and profitability going forward. Our total order book position stands at 1736 crores as of 31st March 2025. On a standalone basis itself, the order book increased 2,330 crores, up from 1,118 crores at the end of the previous financial year and this was driven primarily by the strong order inflows in the BTS segment for defense and space customers.
On the balance sheet front, our working capital has increased at the consolidated level to 87 days prior to primarily due to higher billing in quarter four. As you may also know, we successfully raised 210 crores from our marquee investors via QIP during the last quarter which reflects a strong confidence in our company’s future growth potential. The fund utilization has been for debt reduction 115crores out of which we’ve already repaid 110crores, while the remaining funds are strategically allocated towards capex and general corporate purposes. In conclusion, I’m happy to report to you a strong turnaround in our performance in the fourth quarter.
With a very healthy order book and many strategic initiatives on cost optimization underway, we are confident of a much healthier FY26. Lastly, before I hand over the call to Desikan, I’d like to take a moment to reflect on a very important milestone as you may have read in our board outcome, Mr. Desikan, our long serving CFO has decided to superannuate Desiccant has been an integral part of Centum for the last 25 years. His journey has been nothing short of extraordinary and he has been a key driver for our financial strategy and discipline, but also a pillar of strength.
Through many transformations the company has undergone, his contributions have placed Centum on a solid financial footing and built the strong foundation we stand on today. While we will miss his presence and guidance, we are happy that he leaves the company in a much stronger position with the right systems and culture in place and on behalf of the entire Centum family, I thank him for his unwavering dedication, integrity and service. Mr. Desikanth will be succeeded by Mr. Sundar Rajan Patasathi who has come on board as CFO Designate. Sundar brings with him 25 years of rich and diverse experience across sectors such as healthcare, automotive, energy infrastructure, water technology, HR services and Green energy.
A qualified Chartered accountant, Sundar was most recently the first global CFO at Agratas, a Tata Enterprise and has previously held leadership roles at Brics India, Sandoz, ge, Xylem and Edeco. With that I will now hand over the call to Mr. Desikin to take you through the financials for one last time in this role.
K. S. Desikan — Chief Financial Officer
Thank you thank you Nikhil for those kind words and thank everyone for their that support throughout my career. Now for the fourth quarter at a standalone level the revenue from operation was about 270 crores which grew by around 49% quarter on quarter and 60% year on year.
The EBITDA for the quarter was about INR 47 crores which grew by around 120% quarter on quarter and 175% year on year with one of the best quarterly EBITDA margins we have reported 17.37%. The net profit for the quarter was around 30 crores which grew by around 225% quarter on quarter and 240% year on year. For the fourth quarter under review. At a consolidated level, the revenue from operations grew by 31% quarter on quarter and 24% year on year to around 369 crores. The EBITDA for the quarter was 42 crores which grew by around 115% quarter on quarter and 132% year on year with EBITDA margin reported at 11.31%.
The net profit for the quarter was around 22 crores with PAT margin of 5.83% for the full year FY25. At a stand alone level the revenue from operation was about 750 crores representing a growth of 18.5% year on year. The EBITDA for the period was about 102 crores which increased by around 30% year on year with the EBITDA margins reported at 13.6%. The net profit for the period was around 53 crores which grew by 46% year on year. For the full year FY25. At a consolidated level the revenue from operations were 1155 crores which grew by 6% year on year.
The EBITDA stood at around 97 crores which increased by 12.6% with EBITDA margin at 8.37% and net loss for the year was around 2 crores. With that we can open the floor for Q and A session. Thank you very much.
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 touchtone 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 Rupesh Tatya from Intelsense Capital. Please proceed.
Rupesh Tatiya
Hello sir. Thank you, thank you for the opportunity. My question is, I wanted to understand which are the programs in Indian defense ecosystem you are present in? I mean, I don’t think we have ever talked about it. So if you can give some color about whether you’re presenting Sukhoi qr, some missile programs, some what are the naval programs? Some color on that would be really helpful.
Nikhil Mallavarapu
Understood. So very quickly, as you may have noted from our earnings presentation, Defense, space and aerospace account for more than 50% of our overall revenues.
And this comes from all the three different service offerings that we provide. So we have certain projects which are in the build to spec domain where we are responsible right from the design to manufacturing of the products. And in the standalone entity on this part, our customers are typically the public sector units, drdo, ISRO and also hopefully in the coming future directly to the TRI services as well. And then similarly we also do in the EMS part of the business where we are manufacturing products to customers designs and in this part of the business is largely export oriented to global customers.
And these again span different applications and different programs. And we are a strategic supplier and integrated into the global supply chain of these large global OEMs. And then the third is also on the engineering services front. We engage with again the global OEMs on designing parts of their global programs and R and D pipeline. So to answer your question in terms of more specifically, which programs that we are engaged again on the build to spec side of it, our strength lies broadly in two domains here. So first is Space Systems. So space has been an area that we have been involved for long, well over 23, 24 years.
And we have moved up the value chain from being a niche microelectronic component supplier to now delivering full satellite payloads. And to that end we have certain programs that are ongoing for defense applications where we are designing and manufacturing and delivering payloads for electronic intelligence applications and a few others. And then apart from this, coming to radar is another area that we have strong presence in. We build various subsystems for some critical programs, one of them being the VLSR SAM program. We have an important contribution to that which we just won a significant order in the past year apart from that also on land systems has been an area that we have been present in.
We have been on board many different missile programs manufactured by bdl. And in addition to that also on tank electronics we have a strong presence on the different tank platforms including the T90 where we have indigenized various Russian imported items. These are a few. And then in addition to this on the EMS part of the business, we are also on board several different programs, both again on a global level as well as in India itself. In this, the key ones that you would hear about is on the Rafale itself, the Rafale fighters, where we are again building critical electronics for the platform, for the radar and the electronic warfare system of the platform.
And in addition to that we are also exporting electronics to customers Middle east, which are again more on missile programs, not necessarily for India, but for global requirements as well. So these are just a few examples of the points, but yeah, it is clearly an important part of our overall business.
Rupesh Tatiya
Thank you for that detailed answer, sir. So in one of the slides you have given your standalone order books plate, right? So BTS is 664 crore and EMS is 665 crore. So this 664. In all of this, is it fair correct understanding that we will create prototype, we will give it to one of the DPS use or directly to the ministry, then we’ll get a part number, then there will be some production, you know, in future.
Some of it is already production and then some of it is, you know, production in future, two, three years. Is that a fair understanding on this 664 corrode of order book on the BTS side in standalone?
Nikhil Mallavarapu
Yes, yes, that’s, that’s, that’s right.
Rupesh Tatiya
Okay, and then final, final question sir, is on standalone between EMS and dts, can you give some idea about the relative gross margin?
Nikhil Mallavarapu
I’ll maybe speak a little bit more. At probably the EBITDA margin level, these are clearly different margin profiles basically because the build to spec obviously involves the whole design and associated value add that goes with it.
So your typical EBITDA margin for build to spec can be in the range of 20% or so. And whereas on the EMS side of the business it’s more built to print and that is typically in the 10 to 12% level or so. And in terms of gross margin it can vary again depending on contract to contract. But typically normal industry benchmark on the EMS side of the business is material cost percentage of somewhere in the range of about 75 odd percent. Whereas on the, on the Build to spec side of it, it can be much lower than that, maybe closer to 1550% or so.
So that should give you a high level picture of this.
Rupesh Tatiya
And maybe just to conclude this one 75 crore BTS revenue, is it fair that it will grow at a high rate in next 34 years and we can hit let’s say 300, 400 crore revenue in 34 years?
Nikhil Mallavarapu
Yes, that’s the objective. I think with the, with the increase in the order book that we’ve experienced in the past year, we feel that we are on the right trajectory to do that basically.
Rupesh Tatiya
Okay. Okay, thank you. I’ll come back in with you. Sir, thank you for answering my question.
operator
Thank you. The next question is from the line of Chirag Acharya from Ashika Institutional Equities. Please proceed.
Chirag Kachhadiya
Hello Nathalia. Congrats on this kind of more common. A couple of questions. In the beginning of FY25 you mentioned that if EMS likely described the group of the FY25. So this time which vertical you see that in FY26 will use the lower. And second if I look at your EMS Auto Group in FY22 to 25 it shows a muted kind of code, even slightly negative. Okay. So on along with that you mentioned that we internal New guinea category.
So from which industries those clients are coming and when you expect that those new planet will start being the quarter.
Nikhil Mallavarapu
Thanks Chirag for the questions. Could, could you kindly just repeat again the first question? I. I got your second question which was with regard to order book on. On the EMS part of the business and which customers or segments that we’re growing. But could you repeat again the first, first part?
Chirag Kachhadiya
Yeah. So if you look at the FY25 senior performance and clearly shows that EMS has its in terms of growth and margin and all. So for FY26, which vertical you accept to lead this role in terms of growth and this addition to the order book question.
If you look at the yearnd auto group, it’s really muted. So is it a strategic call that we are not taking the contracts in that subsidiary which is located outside India to manage the margin, reduce the cost and all
Nikhil Mallavarapu
understood? Yeah. Okay. So. So at a high level. First of all I think as you rightly pointed out we’ve seen strong growth in the EMS business in, in the past year and we especially when you look at it on a gross revenue basis and we expect that growth momentum to continue. And basically at a standalone level both the EMS and the BTS part of the business should grow.
For us at a blended rate of somewhere in the range of about 25 to 28%. So you may have a little bit higher growth coming from BTS in the coming year and maybe slightly lesser in the ems. But we do expect also a healthy growth rate coming in on the EMS business. To answer your question with regard to the view on order book, I think broadly speaking there’s two factors there. One is, you know, we have a with new existing and new customers on typical basis, the order horizon of the firm purchase orders from our customers will vary depending on the way the supply chain situation looks.
Now over the past, if you go back to 12 or 18 months ago, if you remember, there’s customers still giving us a longer horizon of firm purchase orders. And so we’re seeing that firm purchase order horizon slightly reducing because the supply chain is a lot more stable now. But we do have customer forecasts which are not included in this order book that is being reported. So with the customer forecast that we have, first of all, the visibility is clearly much more and stronger compared to just looking at orders. The second thing is also that as I mentioned, we’ve onboarded a couple of important growing customers for us and those customers are in the final stages or various stages of qualification because typically when we receive an order or when we are awarded a business, we go through a prototyping and new product introduction phase which is delivered to the, to the customers those are qualified, goes through various types of stress testing and all of that and once they’re cleared is when we start getting firm purchase orders.
So with couple of these customers, as I mentioned, we already have the forecasts for them, but those firm purchase orders are expected to come in in the coming quarter or two which, you know, which will, which will help us increase the revenues even in the current year. And to answer the question which sectors these are coming from, we have a couple of different ones there. One being in semiconductor equipment where we have an important customer that we’ve added and another one is in biometric solutions. So these are there enough. And this apart from that, of course, our existing customers itself in the aerospace and defense side of it, we’ve continued to add new part numbers and also some increased volumes on existing part numbers.
So I would say broadly these are the key sectors of growth that we can expect in the coming financial year.
Chirag Kachhadiya
I just want to follow up a subsidiary revenue between DRND and BCFO FY25.
Nikhil Mallavarapu
Sorry, can you, can you repeat again? Subsidiary revenue
Chirag Kachhadiya
bifurcation between RND and BTS and the OVERC Subsidiary.
Nikhil Mallavarapu
Maybe if you could support help with that.
K. S. Desikan
Yeah. Subsidiary revenue for FY25 was 406 crores of which 187 is the BTS and 218 is the engineering services and Chirag. Just to emphasize the point going back to your question on EMS revenue, you know the order book coming down.
I think the important point to note is that with the stability in supply chain which Nikhil explained the existing custom forecast is there and which is not included in the order book situation. But I can tell you that the demand for from the existing customers are robust and it’s good. So what is happening is while you see the order book being lower than the previous year, the forecast portion has increased because of the stability in the supply chain.
Chirag Kachhadiya
This 187 share BTA 7 in the subsidiary, the loss or the underperformance in the subsidy can be 100% attributed to this BTS revenue of 187.
K. S. Desikan
So Nikhil, do you want to take that?
Nikhil Mallavarapu
Go ahead, go ahead. Or maybe I’ll just give a qualitative thing. Maybe you can add it later.
K. S. Desikan
Yes, please.
Nikhil Mallavarapu
At a high level. At a high level, a major part of the loss in the subsidiary is attributable to our Canadian subsidiary which is of course doing the BTS part of the business. But I must clarify that, you know, even in the, in the BTS for the subsidiary, as Desiccant mentioned, we did about 187crores or so of revenue inbuilt to spec in the subsidiary. Of that I would say, you know, maybe around 70 crores or so of that revenue.
70 to 80 crores of that revenue in the current year was from the Canadian subsidiary which is where a big part of the loss is coming from. The remaining build to spec part remains in France and that is a profitable business that we continue to operate. Having said that, I think we also have seen some revenue decline in our French subsidiary on the engineering services side. And that has resulted in I guess a degradation of the margin compared to the previous year. But in absolute numbers the bigger part of the loss is clearly being contributed by the Canadian part which is where we are taking some very clear measures to fix that in the short term.
Chirag Kachhadiya
Thank you. I will come back in the Q5. Thank you.
operator
Thank you. The next question is from the line of Currents annual from Nivisha. Please proceed.
Unidentified Participant
Hope I’m audible.
K. S. Desikan
Yes.
Unidentified Participant
Yeah. First of all, congratulations for a great tenure at center. And yeah, so on the question but I have two specific questions like you’re working on the satellite constellation for. So just wanted to confirm is it related to the SBS Phase 3 program and also if you could highlight the opportunity in that specific program for Centum and Opportunity as a whole as well.
Nikhil Mallavarapu
Yeah, so first of all, I think the programs that we are already executing, which I, which I mentioned earlier in terms of, in terms of the electronic intelligence and all of that are you know, for defense applications, not specifically under SBS program, but for different applications.
But apart from that, SBS is a new program. I’m not, not able to speak too much in detail about that at the moment, but I can say that there will be contributions going from Centum clearly on this program and some of it is expected. Broadly speaking, this program will be a big part of it will be driven by ISRO and also on with private sector participation and we will be looking to contribute our part in terms of the payload electronics for these programs. I’ll stop with that.
Unidentified Participant
Understood. Also second question regarding the performance of the subsidiary we have been talking about in this falling last one as well.
So then generally trying to understand how are we looking at this, you know, segment as a whole and you know, if, if things are not looking good in the long term, do we any, any plans to sell it, sell it off or diverge the business in a. In a longer term, anything as we are, we are looking at the subsidiary segment, if you could highlight.
Nikhil Mallavarapu
Yes. So the subsidiary as I just mentioned, you know, broadly two parts to it. One is in France where we’re doing engineering services and some work and then the second piece which is our Canadian subsidiary where we’re doing passenger information systems for rail application.
Big part of the loss is being contributed from the Canadian subsidiary and we are in various, I would say in advanced stages of discussions with our customer basically to explain to them that we are not able to sustain taking these type of losses. And so we are exploring couple of different strategic options that would enable the, you know, I would say a transition to happen in a smooth way with the customer and the ongoing programs, but to be able to plug our losses in a short term. So there will be something that, that we are doing and we are targeting to have this completed by September or sooner and that’s what I mentioned in the last call and then we continue to work towards that.
Coming back to our France engineering services business here the focus is remains on operational improvement. So in the short term as we mentioned, taking cost optimization measures and improving utilization by focusing on improving our sales is the focus for the short term, at least long term we will reevaluate at a later stage.
Unidentified Participant
Understood. One last question. We talked about the differential between the gross and the net basis revenue that we were accounting for. Would it, would that effect be continuing in the current financial year? Would it, Was it just related to the last financial year? Just clarity on that.
K. S. Desikan
So it will not, it will not continue. It is only for the last year. In FY26, the confusion between gross and net accounting will not be there.
Unidentified Participant
Understood. Thank you so much and all the very best.
K. S. Desikan
Thank you.
operator
Thank you. Before I take the next questions, ladies and gentlemen, I would like to remind you that please limit your questions to duper participants. The next question is from the line of Nirali Gopani from Unique pms. Please proceed.
Nirali Gopani
Yeah, hi, thanks for the opportunity. Nikhil, my question is on the growth side. So you said that you expect the BTS and the EMS revenue to grow by 25 to 28%.
So assuming the console revenues grow somewhere above 20%, so what gives us this confidence? Because in FY25, also on the gross variant, we were expecting growth of 18 to 20% which came somewhere around near 13%. So how confident are we of achieving this kind of growth in the coming 12 years?
Nikhil Mallavarapu
Yeah, I think as I mentioned, you know, there’s two things. One is on the build to spec side of the business, with the order intake that we’ve had, I think the demand side of it is relatively secured. Similarly, on the EMS side of the business as well, we have a clear plan and visibility of which specific products and customers will be driving this growth based on either firm orders or customer forecast that that we have received from them.
So firstly on the demand side, I think we have a reasonable visibility. The point where we maintain a close watch is obviously on the delivery side of it. And on that front, I think the key is in the coming year to focus on some of these new product qualifications that we are moving quite aggressively on. And so, you know, as that progresses and comes to maturity in the short term, we feel the ability for us to meet the revenues are quite strong. So in summary, we do feel confident that we should be able to grow at a pretty healthy rate in the coming year.
Nirali Gopani
Great to hear that. And if we solve the Canadian subsidiary problem, say by September quarter for the full year, do you feel on a console basis an ebitda margin of 10% which you were guiding earlier, possible in this year itself?
K. S. Desikan
Yes. Yeah, I think, yeah, that should be definitely possible at a console level.
Nirali Gopani
That’s it from my side. Thank you so much.
operator
Thank you. The next Question is from the line of Sriram Ram Dass from Green Portfolio aif. Please proceed.
Sreeram Ramdas
Hello, can you hear me?
K. S. Desikan
Yes,
Nikhil Mallavarapu
yes,
Sreeram Ramdas
hello, can you hear me?
Nikhil Mallavarapu
Yes, we can hear you.
You can go ahead.
Sreeram Ramdas
Hi, yes. You were doing a project for RAW Agency, right? The satellite. So what’s the progress? Where are we with it?
Nikhil Mallavarapu
Sorry, I’m not sure where you were told we were doing something for raw. Just saying that we make electronic intelligence based payloads. We don’t disclose for confidentiality reasons. Who is the customer? So the electronic intelligence program that we are executing is progressing well. We’ve delivered the first set of engineering models for the customer and it’s been well received and we are progressing on to the subsequent part. And we expect this year that we will have some substantial revenues and billing from this program as well.
Yeah.
Sreeram Ramdas
Okay. Okay. So Is this the 187 crore project or is this some other project you’re talking about, sir?
Nikhil Mallavarapu
Yeah, it was a totally a 300 crore project program. It’s split into two different orders. Yeah, yeah. Okay, got it, got it. And last question. What is our order bidding pipeline? If you can share some numbers, the pipeline of orders is healthy. I mentioned this in the past. You know, we’re roughly looking at something in the range of about 2,000 crores of booking in the next three to four years. That’s, that’s what we’re targeting. Of course this clearly depends on the timelines associated with government procurement processes and so on which you know, have some uncertainty associated with it.
But our target and visibility is to try to book something in that. In that range.
Sreeram Ramdas
Okay. 2000 crores in three to four years.
Nikhil Mallavarapu
Yes, we talk. You’re talking very specifically about the build to spec side of the defense and aerospace business. Yes, Ems.
Sreeram Ramdas
Okay. So like pipeline, do we have any pipeline like the orders that we’re bidding for, not the potential order book in three or four years, but the like a pipeline of orders that we’re bidding for. That’s what I was looking for.
Nikhil Mallavarapu
Yeah, I mean I can’t, I can’t disclose very specifically that, but yeah, I mean this is all what we’re saying is based on pipeline of specific opportunities we’re building on.
K. S. Desikan
I would probably add saying that, you know, we are as we maintain we should be able to grow the revenue by around 20% consolidated and our pipeline is sufficient enough to cover that growth rates.
Sreeram Ramdas
That helps a lot. Great. Thank you so much. That’s all from my side. Thanks.
operator
Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital, please proceed.
Ankit Gupta
Thanks for the opportunity. Nikhil, if you can give the split bit of BTS order book of for 664 crore out of which how much is for space defense and in defense how much is for you know Army, Navy and Air Force
Nikhil Mallavarapu
typically don’t give very specific breakups in terms of the, of the order book.
But at a high level I would say space applications of. I would say in the range of somewhere in the world 40 to 50% of that of that part and the rest is non space or more defense side of the business. And this, this cuts across different applications. So yeah, so the 40 to 50%, you know split that you have given for the space, this is entirely for ISRO or for some defense application that we have been working on for some time now. It’s not only for ISRO even. We also work with DRDO on certain defense programs.
Ankit Gupta
And any update on the emergency procurement which has been announced and you know the space orders, the space satellite orders that we have been you know with some news reports have been coming that the, the procurement timelines have been tape on significantly. So you know if you can give some updates on and on the ground situation that you are seeing for our company. And overall,
Nikhil Mallavarapu
yeah, I mean we had actually had to release a release note to the stock exchanges shortly after a lot of these articles have come out. I mean we confirmed that we have not received any firm request or anything of that sort right now in terms of the expediting SBS3 or anything like that.
So we have no specific comment as such on, on that. But having said that, yeah, there is this clearly a need for some of the emergency procurements and we’ll have to just wait and see how things turn out eventually.
Ankit Gupta
But any talks, of course you wouldn’t have called the firm orders. It will still be in discussion. But have you seen some urgency from the government side for this?
Nikhil Mallavarapu
Certainly, I mean I think.
Ankit Gupta
Sure. Okay, thank you. All the best.
operator
Thank you. The next question is from the line of Pranav Srimal from PNC Wealth. Please proceed.
Pranav Shrimal
I hope I’m audible. Most of my questions have been answered. The order book that we have, what would be the timeline?
Nikhil Mallavarapu
So this varies again from business to business. Typically our BTS order book is executable over a, you know, somewhere between two to two and a half years in terms of time Horizon. Whereas the EMS order book is typically less than 12 months. I mean at this stage at least. And on the engineering services side also, you know it can be even shorter than you know 10 to 12 months, maybe less than that. I would say so that, that’s, that’s broadly how the, the order book splits up and maybe at a overall basis something in the range of about 15 months or so.
15 to 15 odd months. I would say 15 to 18 months is what we could look at.
Pranav Shrimal
And coming to the Canadian, how much is the loss that we have accumulated on our book?
K. S. Desikan
Yeah, yeah. So for the year the loss was something like 2.8 million euros. And we have been having around two and a half million loss for the past two years as well.
Pranav Shrimal
Approximately five point something million total loss in our book.
Nikhil Mallavarapu
Euro. Euro.
Pranav Shrimal
Okay. Okay. What is this? And this loss can be carry forwarded for. Do we get any certain tax benefits there
K. S. Desikan
in Canada? Yes, like, like India or like France.
These losses are accumulated and can be offset against the future.
Pranav Shrimal
Okay sir. And do we see any short term vision of the becoming profitable post? The talk that we are having with the customers
K. S. Desikan
as Nikhil was mentioning, the focus right now is to stop the bleeding in Canada. So the bleeding is basically because we have manpower there which is the main cost and we don’t have sufficient revenues to cover that. We are exploring different options, talking to the customers, you know, multiple options. So to answer your question, the focus is on to stop the bleeding more than looking for profit in Canada.
Pranav Shrimal
That’s it from my side. Best of luck sir.
operator
Thank you. The next question is from the line of Sai Vijay from Cap Stocks and securities. Please proceed.
Unidentified Participant
Hello sir. Am I audible?
K. S. Desikan
Yes.
Nikhil Mallavarapu
Yes please.
Unidentified Participant
Thank you for the opportunity. My question is regarding the two DRD orders received last year. Could you share how much revenue has been recognized from these contracts so far?
Nikhil Mallavarapu
Again, we don’t give specifics about every order that we execute. If you’re again referring to the program which I just mentioned in terms of the space based electronic intelligence program there we have deliver the engineering models but we are still in the progress of completing the flight models and all of that.
So we still initial period of delivery or the first part of the delivery in terms of engineering models.
Unidentified Participant
Okay. And my second question is on a consolidated basis, what is the revenue growth expected? I think you mentioned about 18 to 20, right? Or 20 to 25. I’m a little confused about that. Could you just clarify on a consolidated basis?
Nikhil Mallavarapu
Yeah, on a consolidated basis what we’ve been going for is 18 to 20%. And that is basically driven by a higher growth rate contribution from the standalone entity which is at over the 25% level. Whereas at the subsidiary level, you know, will be roughly Flat to maybe.
Yeah, roughly flat, I would say.
Unidentified Participant
Okay, thank you very much, sir. And all the best to the entire team.
K. S. Desikan
Thank you.
Nikhil Mallavarapu
Thanks.
operator
Thank you. The next question is from the line of Harsh Mehta from Perpetual Capital Advisors. Please proceed.
Harsh Mehta
Hello.
K. S. Desikan
Yes,
Harsh Mehta
Hello.
Nikhil Mallavarapu
Yes, please go.
Harsh Mehta
Congratulations on the good set of numbers, sir. My first question is, could you clarify whether your company is involved across the entire satellite value chain, specifically the ground station, satellite launches and satellite manufacturing, or are you focused on one parts of the value chain?
Nikhil Mallavarapu
Yeah, yeah. So we, we are absolutely engaged on the different parts of the value chain in space from the launch vehicles to the satellite, even within the satellite, the satellite bus and satellite payload.
And we are on board both of those pieces. So we cut across various aspects of the value chain perhaps a little bit in terms from a revenue perspective. Major part of it comes from the satellite itself and a little bit lesser from the launch vehicle and ground. Ground equipment at this stage.
Harsh Mehta
Right. So now that the Indian government is planning to invest around 900 crores in the domestic ground station network to monitor satellites over the Indian airspace, do you see this as an opportunity for Centum to grow their revenue in these areas of the satellite also?
Nikhil Mallavarapu
There’s many different programs ongoing in terms of the overall, you know, the buildup of space infrastructure.
And we continue to actively monitor all these opportunities. So as a player who’s been in the industry for long time, I think we are confident that we will continue to grow in the overall space business.
Harsh Mehta
And so can you also mention some of your competitors in the satellite payload business?
Nikhil Mallavarapu
I typically don’t give specific names of competitors over here, but as far as addressing the requirements in India in terms of the technical capabilities that we have, especially on the payload side, I would say we have a very strong capability and very few other private sector companies would be able to demonstrate.
So we are quite, we have a quite unique, differentiated capability both in terms of design and IP as well as manufacturing capabilities as far as this course.
Harsh Mehta
And sir, lastly, what led to the decline in other expenses? It’s down 11% for the whole year compared to last year.
K. S. Desikan
This was due to a specific cost reduction initiative that was undertaken in the subsidiary because we knew that the revenues are not growing, rather it is coming down. So we specifically look for some kind of a restructuring plan. You will see not only in other expense, also in the manpower expenses and other expenses.
Both it was a specific cost reduction measure. So is this going to be temporary or is it a permanent change for the company for the future? The revised levels will be continued and our Endeavor is to control it at this level and not to allow the increase.
Harsh Mehta
Okay. I’m. Sir Centerman recently signed an MOU with Indra Systems from Spain. What’s the update on this mou?
Nikhil Mallavarapu
That the MOU was with regard to a specific opportunity for space debris tracking radar. And you know, that was an opportunity that we have bid on. But there has been no progress in the specific RFQ in the past couple of quarters.
Harsh Mehta
Right. And sir, the space based surveillance which we talked about earlier also. Has the government accelerated this program after what happened in Telgram?
Nikhil Mallavarapu
As I mentioned earlier, I’m not able to comment anything specifically with regard to this program. Thank you.
Harsh Mehta
Thank you.
operator
Thank you. The next question is from the line of Nirali Gopani from Unique pms. Please proceed.
Nirali Gopani
Just one small clarification. What is the effective tax rate that we should work with?
K. S. Desikan
It will be 20, 26%. 26 to 27%
Nirali Gopani
on the console basis, right?
K. S. Desikan
Yes. Because there is no profit in the. The taxes only on the standalone profit.
Nirali Gopani
Okay. Okay, perfect. Yeah. Thank you.
operator
Thank you. The next question is from the line of Chirag Kachadia from Ashika Institutional Equities. Please proceed.
Chirag Kachhadiya
Yeah, I have a question on CAPEX front. What CAPEX are we looking for? Upper 26 and 27.
K. S. Desikan
Chirag. Did you ask CapEx for the year FY26?
Chirag Kachhadiya
Yeah.
K. S. Desikan
Okay. We are planning to invest about 40 crores. That again, only in the standalone essentially to, you know, augment the capabilities and increase the capacities both in the BTS segment as well as the EMS segment.
Chirag Kachhadiya
So the equipment which we are going to procure can be interchangeably used for BTS and ems, right?
K. S. Desikan
Yes.
Chirag Kachhadiya
Thank you.
operator
Thank you. The next question is from the line of Pranav Bastawala, an individual investor. Please proceed. Sorry to interrupt. Mr. Pranav, I would request you to unmute yourself and then speak.
Unidentified Participant
Yeah. Thank you very much. And Nikhil, rightly you pointed out we are going to now lose Mr. Desikan. And I must say that what a journey. Just to be in brief, that from 2001 to 2025 and on 30, 35 crore company now we are seeing 1150 crore turnover. And where it will lead to nobody knows. But that is the kind of a journey this organization has.
And he’s one of the pillar of this particular journey. Thank you very much, Mr. For your contribution to this company. The investors are very, very happy and we will miss you a lot.
K. S. Desikan
Thank you. Thank you Mr. Pranav for your kind words. Thank you so much. Thanks for all the support. For all this. Yes, I know you entered in probably 2002 in Centum electronics and you have been a long term supporter with your valuable inputs and guidance. Thank you so much. Please continue to do so.
Unidentified Participant
Yeah, thank you. So lot of questions have been asked but just want to say that we are people are asking about defense and aerospace.
This is one of the sectors and which last time also in the AGM also it was raised that Indian contribution is rising. Presently exports are 75% and 25% from the domestic which is again going to rise. So my question is that is fine but what about the other applications as for example we are talking about semiconductor, are we looking at nuclear also which is also likely to be a very very big opportunity over the next five years. Already government is doing lot in nuclear space and another space area where I know that Centum has been doing lot of research and doing lot of work with ISRO that is safe but when we look at it nothing much greater in terms of the value has been happening.
So what is likely scenario in next five years and what is the kind of contribution we are looking in space, both military and not military part what’s where center is likely to be and are we going to have some kind of collaborations or JVs in different spheres like even semiconductor is going to be a bigger opportunity even in India at a later date. And so in nuclear or semiconductor or any kind of other industrial applications where you would like to see apart from defense and others. Thank you.
Nikhil Mallavarapu
Thanks. Thanks Pranav. First of all thanks again for to recognize as you rightly did Desikin’s tenure and as he mentioned I think we continue to rely on your support and feedback as things progress.
Coming to your question in terms of sectors clearly defense is an area that we are bullish on so so we continue to have various initiatives on that front to be able to continue positioning ourselves to go up the value chain and be part of larger programs and key programs at the national level and space as well. While I mentioned defence, what we see is even for space a big target application is in defense or military applications itself. And so we continue to leverage and build and grow our space capabilities in the coming years. But perhaps with still military or defense oriented application we are still not seeing a huge firm demand in terms of non defence applications but we continue to monitor and see that especially in India apart from these two sectors.
I think yes as we mentioned semiconductor equipment is something that we continue to look at which we’ve added a customer that can be big, big driver and contributor to growth for the coming years. In addition to that, industrial applications is an area that we’re also exploring more and various aspects of industrial applications. I think we’re looking at the nuclear specifically still, I guess at the early stage, which we. Which not much to say about that as yet, but we are seeing some clear opportunities as far as industrial equipment for renewables, grid automation, electrification and so on.
So that’s an area that we have been in and we also see seeing more indigenization with the increased capex at the national level for these kind of products. Industrial is certainly an area that we will be in and we will continue to grow. And then I also talked about the biometrics area, which again is something that we feel can be a revenue contributor of something substantial as we go forward. We’re building a good partnership with a global OEM on that front and we feel that can also be a good opportunity. So these are, I would say the areas that we’re looking at.
Automotive has been an area that we’ve also been pursuing, especially on the EV side of it. And you know, we’ve started, we’ve added certain customers the past year. We’ve seen this I guess be relatively muted, but we still continue to explore and look at that and feel we can play an important role overall electrification in automotive side also in the future.
Unidentified Participant
So Nikhil, just to add one question that see we are very good in payloads. We can now build lot. Okay. Sorry ma’ am. Okay.
operator
The next question is from the line of Harsh Mehta from Perpetual Capital Advisors. Please proceed.
Harsh Mehta
Hello. Hello.
Nikhil Mallavarapu
Yes please. You can go ahead.
Harsh Mehta
Yes, sir. Sir, I wanted to know what has been the historical utilization of your engineering team in France over the last five to 10 years and how has this changed recently and what is the current level of activity?
Nikhil Mallavarapu
Yeah, in the past I would say it has been at reasonably good level. In the past year, however, that has slowed down a little bit more specifically in two sectors. One is automotive, which I don’t think would come as a surprise to many people. That’s been a sector, especially in Europe, which has had an impact.
And the second one also, in fact, as far as some of the engagements and programs and customers that we have, space actually was something that had picked up quite well for us in FY23 and FY22 or FY23 and FY24, but has slowed down significantly in the past 12 to 18 months. Some of our key customers there have had even in the past year announced significant layoffs and resizing of the team to be able to manage the slowdown in the activity and demand that they’ve seen there. So these have been two sectors that have in a sense impacted us also.
And that’s where we are looking to double down and strengthen again the engagements with our defense customers in Europe because that, that is an area that there is investment and growth happening and will continue to happen over, over a medium term.
Harsh Mehta
And sir, could you. So could you also describe what is your order selection criteria? We typically have different modes of engagement. I’m assuming your question is with regard to engineering services or the subsidiary specifically or are you talking about more generally? I wanted to know about both the part of the business.
Nikhil Mallavarapu
Okay. I mean they vary obviously in terms of each service offering.
Typically in the build to spec kind of business, our typical order size has now increased to a 30 to 50 crore kind of annual revenue, either annual revenue or border value. Whereas on the EMS side of the business, you know, we, we want to target a customer that can get us to at least 100 crore revenue per year kind of rate. Obviously that happens over time with multiple different part numbers and so on, but that’s the objective. And on the engineering services side of the business that again varies depending on the model. We have certain time and material or consulting type of engagements and then on the other hand some service center work unit kind of engagements and so on.
Here again, you know what we look for is how to grow with the customer to be able to get to a 5 plus or 3 plus million revenue range with several customers and with some of our top customers how to increase that to you know, 7 to 10 million dollar kind of engagement over the coming years. That’s. Yeah. Thank you.
Harsh Mehta
Thank you so much sir.
operator
Thank you. The next question is from the line of Jaisrani from Mount. Please proceed.
Jay Jesrani
Hello. Am I audible?
K. S. Desikan
Yes, please.
Jay Jesrani
Hello. Yes, yes. Congratulations again on a wonderful. I’ve though not interacted as much as PRANAV but last 10 years you’ve been fantastic in terms of giving us clarity and openness in terms of approach towards understanding the company gone through the tough times.
Unfortunately you’re not going to see the great times but I hope you’re associated with them in some way or the other because you have complete knowledge on the company. Nikhil, just taking your question. I just want to know whether China one plus one is still a talk or it just defense which is the talk last time and we had interacted during COVID time you said that a lot of prototypes are being done where you want to get to the 50 or 100 crore orders. But it takes two to three years of investment to create those prototypes to get into the floor and get into manufacturing.
Are we any close to any of the orders on such type of companies because of China plus one? And second is what is the current employee strength and how much do you see growing in next two years? Do you see manpower being very important, bench strength to be very important to grow this business? Thank you.
Nikhil Mallavarapu
Thanks, Jay. So just to answer your question, first part of the question which was with regard to the China Bus 1, absolutely. We continue to see that as a team and we have added those customers. In fact, I touched on it also earlier on in the Q and A where we are in advanced stages of qualification with the customers and we expect this year itself for there to be good order inflow and revenues coming in from some of these new customers that have been pursuing this China plus one approach.
So, you know, we absolutely continue to see that and it exists with both some of our existing customers as well as new customers that we have in various stages of the lifetime. So that’s, I would say the point on the first, the second question, can you just restate that again please?
Jay Jesrani
Typically from the employee standpoint of you because the demand will grow and you need to, yes, you need to grow the employee. Do you need a good bench strength or you need to invest in employees from force to train to a certain level? What is the current employee strength and where do you see it in next two years?
Nikhil Mallavarapu
Yeah, first of all, very important for me to just clarify that employees cost and strength is something that needs to be looked at again separately at the standalone level and at a subsidiary level.
Mainly because at a standalone level we are at the end of the day delivering a product. Whereas, whereas in, in the subsidiary we are delivering a service. And so manpower is, you can say the, what you’re billing is basically the time of our engineers that are working on the projects and so on. So, so that’s the first thing. So with, with that in mind, I think, you know, with talking about the standalone part of the business.
Jay Jesrani
Yes, more on the standalone. Yeah, yeah,
Nikhil Mallavarapu
yeah. Where we continue to see the growth. Yes, we will, we will, we will.
We have a program at different levels where we need to keep adding. I think we have a pretty good program in place especially from the technician level to be able to, to scale up the resources as we grow. But we also have a strong program around productivity to make sure with the existing resources itself we are able to do more where we continue to spend a lot of time, especially on the management and indirect middle management, you can say level engineers that are part of the new product qualifications and so on. That’s going to be a critical area, an area where there is a lot of demand for.
And so we do look at, you know, ensuring that we are investing in people and the resources a little bit ahead of when we actually need them.
K. S. Desikan
Just to add Jai Jasrani, I think you know, on the manpower your point is absolutely right. You know, today more than the business, the challenge or the point is on talent management. And I think you know, the employee retention and attrition are being closely monitored. Plus like what Nikhil said, the middle management, we have identified the high potentials and then you know we are putting them through training programs.
So there. And plus also the productivity measures that Nikhil was talking about. So there are a lot of focus on the talent management which definitely will guide the growth for this company. And from my side I think. Thank you so much, Mr. Jai Jasrani. I think for your kind words and also the specific inputs you have been giving from time to time. It may not be continuous but they are all taken very seriously and discussed internally and then actions taken upon. I’m sure you. Thank you.
Jay Jesrani
Thank you. I appreciate that. Thank you.
operator
Thank you. The next question is from the line of Anshul Saigal from Saigal Capital Advisors llp. Please proceed.
Anshul Saigal
Good afternoon. Thanks for taking the question. Are contributions from India is about 29% just now as we get into the next few years, where do we see this contribution going? Will it remain in the same proportion or will it rise?
Nikhil Mallavarapu
Thanks for the question. I think important to note that I think already in the last three to four years it has been increasing and that’s a combination of the make in India push that we’ve seen in the different sectors that we experience. So I don’t want to put a very specific number at the moment but we will see probably a little bit higher contribution from India.
But having said that, we continue to have a very healthy pipeline of export customers, especially on the EMS part of the business and we will continue to develop and grow those customers for us. So you will not see a complete sort of 180 in terms of major change of going from 30% or 29% to 70% or something like that. But we will see a gradual increase in terms of India as part of our overall revenues and it’s. It is what we are actively pursuing also.
Anshul Saigal
Sure. And I would assume that most of this business is bts if not all.
Nikhil Mallavarapu
Yes, yeah, most of the, most of the domestic business is contributed by our business. But we do also have some EMS customers that we deliver for globally but also for their demand in India.
Anshul Saigal
Right. And is it fair to assume that this 29, given the trend in recent years can go to as much as say 35, not really 70, but say 35. Is that a possibility in the next three years?
Nikhil Mallavarapu
Yeah, I mean certainly. Yeah.
Anshul Saigal
Okay. Which also then raises the question, given that maybe.
Nikhil Mallavarapu
Let me just clarify that. When I say certainly, I’m meaning it is, it is clearly a possibility.
And as I mentioned earlier, the, the what we are looking at in terms of the contribution from build to spec as well as some of the growth that we are seeing, the EMS of business for domestic customers, we should see an increase on the domestic contribution.
Anshul Saigal
Sure. Thanks. So that then raises the point that this being a higher margin business, this will mean the mix change will kind of add to margins and so say in the next three years, Mr. DeSican just mentioned that next year it’s quite likely we’ll be at about 10% consolidated EBITDA.
So say next three years, where can this number be? Can it be like 11 to 12?
K. S. Desikan
Yes, definitely. I think that that’s our goal to improve that from 10 to probably around 12 in the next two years.
Anshul Saigal
Okay, great. And also given the standalone growth numbers that you mentioned, say of around 28 odd percent, what could be the, I mean in the next three years, this 1150 crore revenue, is it likely that it will double given this kind of a run rate
K. S. Desikan
as we have been maintaining, you know, we are targeting 18 to 20% CAGR for the next three years.
Anshul Saigal
18 to 20% CAGR. Okay, that’s very helpful. Thank you very much.
K. S. Desikan
Thank you.
operator
Thank you ladies and gentlemen. We take as the last question and would now like to hand the conference over to the management for closing comments.
Nikhil Mallavarapu
So thank you all for participating in the earnings conference call. I hope you were able to answer your question satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our investor relation managers at Valorum Advisors. Once again, just in closing, I would say that we’ve continued our path of revenue growth as well as margin expansion.
We have a clear plan around that and, and we’re working towards that. Please don’t look at us as a quarter by quarter company. Please continue to look at us as a full annualized company because we do have some lumpiness in our revenues But I think we are on the right path and we continue to focus on these opportunities and converting them. And one more time I want once again place on record our deep gratitude for Desikin and all that he has done for the company. He has been a mentor to me and to many of our business unit heads.
His wisdom, his steady hand and calm counsel have been invaluable. And for our chairman as well, he’s been more than just a finance leader. He’s been a trusted partner through the thick and thin. So thank you again Desikin and maybe some last words from you also please.
K. S. Desikan
Thank you so much Nikhil for those kind words. I think. Anyway, as you rightly mentioned, I’ll be here till the 31st of August. So another quarter to go probably I’ll be along with Sundar meeting this investors. But I think it has been an excellent support from Rao and from Nikhil without which I don’t think I could have completed 25 years in this company.
I’m very happy and proud about my exciting journey here and I think many shareholders with whom I have been associated for a long time have been very supportive. And thank you so much the investors and thank you Rao and thank you Nikhil. And but that that important remark that you made, Nikhil, that is we should be looked at as a year to year company and not a quarter to company, quarter to quarter company. I think that’s a very, very important remark. With that note I thank everyone and thank you so much.
Nikhil Mallavarapu
Thank you
operator
on behalf of Nirmal Bank Equities Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your line.
K. S. Desikan
Thank you.