Premier Explosives Limited (PREMEXPLN) Q3 FY23 Earnings Concall Transcript

Premier Explosives Limited (NSE:PREMEXPLN) Q3 FY23 Earnings Concall dated Feb. 13, 2023.

Corporate Participants:

T.V. Chowdary — Managing Director

Srihari Pakalapati — Chief Financial Officer

Analysts:

Vishal Mehta — Stellar Investor Relations — Analyst

Aman Vij — Astute Investment Management — Analyst

Niraj Mansingka — White Pine Investment Management — Analyst

Abhishek Poddar — HDFC Mutual Fund — Analyst

Gursharan — GMA — Analyst

Parag Kulkarni — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Premier Explosives Limited Q3 FY’23 Earnings Conference call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Vishal Mehta from Stellar Investor Relations. Thank you, and over to you, sir.

Vishal Mehta — Stellar Investor Relations — Analyst

Thank you, Faizan. Good afternoon, everyone. I, on behalf of Stellar Investor Relations, welcome you all to Premier Explosives Limited Q3 and Nine Months FY’23 Earnings Conference Call. We shall be sharing the key operating and financial highlights for the quarter and nine months ended December 31, 2022.

We have with us today the senior management team of Premier Explosives Limited, Mr. T.V. Chowdary, Managing Director; and Mr. Srihari Pakalapati, Chief Financial Officer.

Before we begin, I would like to state that some of the statements made in today’s discussion may be forward-looking in nature and may involve risks and uncertainties. Documents relating to the company’s financial performance have already been emailed to you. Now I invite Mr. Chowdary to share his initial remarks on the company’s performance for the quarter.

T.V. Chowdary — Managing Director

Thank you, Mr. Vishal. Good afternoon, everyone, and thank you for joining the call. We’ll begin call — begin the call, the company’s operational performance during the quarter followed by the key industry updates. The recent uptick for missiles and rockets, I’m pleased to inform that some of the DRDO developed technologies which are transferred to us have productionized and we received production orders from BDL, who is the lead integrator for these projects. And in addition to this, as I’ve shared earlier, we have received several design and development orders for export purpose. Out of it, four numbers we received supply orders and productionization has stared and the delivery for export was affected in the last quarter of the current financial year.

We always continue to move on our growth track. During the quarter, we have generated cash profit of INR3.3 crores with out execution in run rate exceeding and given the nature of our cost structure, the operating leverage of our business will help us to generate better cash flows. This will be utilized towards strengthening our balance sheet. The changing business mix with the increase in contribution of defense segment will augur well for our overall margins.

On the order intake front, there has been good progress and let me take you through the new orders — order of big issues during nine months of financial year 2023. The company has recently signed an MOU with Hindustan Aeronautics Limited in the field of manufacturing, assembly and testing, storage and transportation of explosives for bombs and missiles. Received new orders from Israel Aerospace Industries Limited for manufacturing and supply of warhead with total value of $537,500, which is equal to INR4.3 crores, and expect to be delivered by May 2023. Production and supply of booster rocket motors for a total value of $688,000, equivalent to INR5.5 crores, and deliveries are expected by March 2023.

The company also received an advance amount of $24.4 million, that is INR19.4 crores towards the development of production lines and procurement of raw materials for the orders received from overseas entity for supply of rocket motors. During the quarter, the company has received an order from VSSC, that is Vikram Sarabhai Space Center for production and supply of three sets of PSOM-XL Motors for their PSLV launch vehicle for a total value of INR3.45 crores, and it will be executed at exhibited at Katepally and we have already exhibited four PSOM-XL Motors from Katepally and [Indecipherable] and this order is to be executed within a period of eight months.

There are some of our notable updates on quarterly order. We are extremely pleased to report that our current outstanding order book as on December 31, 2022 stood at approximately INR575 crores. This translates into three types of our financial year ’22 revenues. In mention to the rocket motors and warheads, production of [Indecipherable] against new orders is going on. This is expected to give good boost to revenue in the fourth quarter and financial year ’23-’24.

Coming to the defense industry future, and the defense industry is like we have been mentioned and like you may also be aware, defense sector has a strong manufacturing ecosystem. Recently organized defense expo in October 2022, which offers the Indian defense sector, particularly to showcase its chance to present its rules, technology and solutions to the government. Along with participation from 63 nations, the last edition of this expo saw an unprecedented gathering of over 600 exhibitors, both physically and online, and experienced use of this expo 2022, which saw 450 on MOU, TOT agreements to advance India’s growing defense industry networking. Efforts are being made to improve manufacturing capabilities.

India has recently emerged as a major defense exporter, especially with the development of a strong defense industrial environment and exports to more than 75, after seeing an eight fold increase in defense exports over past five years. In ’21- 22, India’s defense exports reached a record high of INR14,000 crores. This achievement was made possible with the government initiatives to increase the export of military equipment to friendly foreign nation. Further, the Government of India is targeting to cross INR19,000 crores mark for defense exports by 2033 and well on course to attain the target of INR25,000 crore worth of exports by 2025.

Now coming to the industrial explosive segment, the costs of raw material which have increased by approximately 200% in the past year — in the previous year are finally stabilizing and this also holds true for the coal mining industry. We could see several — some reversal trend in some of the raw material prices. The domestic coal output is increased to 1017 metric tons in in ’23-’24, and will further likely to increase by 9% to 10% in ’24-’25, in light of the anticipated rise is coal consumption or into economic expansion.

Now I request our CFO to share the financial performance.

Srihari Pakalapati — Chief Financial Officer

Thank you sir. Good afternoon, everyone. The results presentation for the quarter has been uploaded on the stock exchanges and on the company’s website. I believe you all may have gone through the same. Now I would present the financial results for the quarter and nine months ended 31st December 2022.

The revenue from operations for Q3 FY ’23 stands at INR37 crores as compared to INR50.8 crores in the corresponding period last year with a de-growth of 26.6%. Our operating profit for Q3 FY’23 stands at INR5 crores as compared to INR4 crores in the corresponding period last year. The operating margin for the quarter stands at 13%.

In Q3 FY’23, we reported a net profit of [Indecipherable] crores compared to the same in Q3 FY’22. The revenue from operations for nine months ended — I mean nine months FY’23 stands at [Indecipherable] compared to INR139 crores in the corresponding period last year, which is translating into an 8% growth year-on year. Operating profit for the nine months stands at INR18 crores as compared to INR17 crores in the corresponding period last year, which shows a flattish growth. The operating margin of 12% in nine months FY’23 — net profit in nine months FY’23 stood at INR4 crores comparted to INR4 crores in nine months FY’22.

Now coming to the order book. The company’s current total order book stands at INR575 crores, out of which explosive business comprises around INR1.08 crores. Defense segment is at INR335 crores, which is around 58% of our total order book and the present segment, that is the operations and management is around INR132 crores. The order book retains a strong growth over the [Technical Issues]

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Aman Vij from Astute Investment Management. Please go ahead.

Aman Vij — Astute Investment Management — Analyst

Yeah, good afternoon, sir. First question is on the order book for space. If you can quantify that? And also if you can talk talk about — typically we are as of now providing mostly motors to the rockets, so what is the typical percentage cost of a motor of the total cost of a rocket? And these are the question on the space side, if you can talk about the same.

T.V. Chowdary — Managing Director

Sorry, can you repeat what exactly percentage for rocket motors on a overall order.

Aman Vij — Astute Investment Management — Analyst

No, no, I was talking about percentage of the cost of motor as the total cost of the rocket, just to understand if a rocket cost, example $50 million, so what is the typical cost of a motor in that?

T.V. Chowdary — Managing Director

This is a bit difficult to say because the cost is has three division, rocket motor basically. one is rocket motor and a missile has three. One is rocket motor, second is warhead and then guidance system, electronics and all those things, seekers. So, our this domain remains as on-date with the rocket motor and then warhead in some cases, but is seeker is definitely — seeker and then those portions are the costliest parts of the motor. And percentage, I won’t be able to tell, probably the BDL can tell this part.

Aman Vij — Astute Investment Management — Analyst

And sorry, what is our order book as of today in this space division?

T.V. Chowdary — Managing Director

In defense we have [Indecipherable]

Aman Vij — Astute Investment Management — Analyst

Yeah, that I know, sir. On specifically to ISRO or space, I was talking about that.

T.V. Chowdary — Managing Director

Space requirement?

Aman Vij — Astute Investment Management — Analyst

Out of this order book, how much is for space/ISRO.

T.V. Chowdary — Managing Director

Right now it is only INR3.45 crores.

Aman Vij — Astute Investment Management — Analyst

Okay, so the new orders which you were talking about at the start, that is not into the order book.

T.V. Chowdary — Managing Director

Yeah. This new order which we received was INR3.45 crores. Old order we have executed.

Aman Vij — Astute Investment Management — Analyst

Okay, sir. My second question is, sir, two, three years we used to talk about — we had bid for ammunition, I believe grenade. So if you can update on that order?

T.V. Chowdary — Managing Director

RFP is still lot opened and finalized and in the meantime parallelly, we are working with, as I mentioned in my initial notes, we are working with ARD on a DCPP program for development of ammunition. So, whereas that RFP is still not opened commercial.

Aman Vij — Astute Investment Management — Analyst

Okay, okay. Sir, so correct me if I’m wrong, but solar industry, you had won orders for some grenade. So we didn’t bid for that order, our bidding was for separate product, you can talk about the same.

T.V. Chowdary — Managing Director

Solar industry, it is not into this grenade ammunition as far as I know, but if they are there, cannot. But you may be talking about some multimode grenade.

Aman Vij — Astute Investment Management — Analyst

Yes, yes, yes.

T.V. Chowdary — Managing Director

No, consciously we did not participate in that tender. So they are alone in that and we are not impacted as on date.

Aman Vij — Astute Investment Management — Analyst

Okay, but in our portfolio with ARD which you are talking about, we have this option of grenades also? Is it multi mode or is it a different?

T.V. Chowdary — Managing Director

See, the multimode grenades, as far as I know, they are like any hand grenade. What I’m talking the grenade is grenade ammunition, which is fired from a grenade launcher. Its a launch ammunition, that 40 millimeter, 30 millimeter which is fired from a gun or multi grenade launcher or a under barrel gun launcher. That’s the ammunition which we have participated and waiting for it to be awarded.

Aman Vij — Astute Investment Management — Analyst

Okay, and if you can talk about what is the opportunity in this category, the grenade launcher grenades basically?

T.V. Chowdary — Managing Director

Now, the opportunity is good in the grenade ammunition. Right now that is being imported and then some quantity is being made by ordinance factories, but there is a good demand and RFP quantities are also good.

Aman Vij — Astute Investment Management — Analyst

Okay, and when do we expect any orders come from order from this category?

T.V. Chowdary — Managing Director

I think it may happen in the next financial year, probably in the middle of financial year because we have to go through the qualification process and all those, then only it will be — after all technical qualifications then only it will happen. But apart from that RFP, our facility, we are also planning for many agencies who want to outsource to us for manufacturing, that is also we are planning and the discussions are going on. So we are not just dependent on only on the RFP.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. And last point on this. How many players have bid for this, if you can quantify the imported amount? just to understand what is the opportunity.

T.V. Chowdary — Managing Director

It’s a little difficult to say. Its not a open information we have to get from — I think three or four agencies have participated in this, including us.

Aman Vij — Astute Investment Management — Analyst

Okay. Next question is on the presentation, you have talked about — we are supplying propellants to the missile program basically of the fixed missile program. So, sir, typically just wanted to understand, you mentioned last call we have INR100 crore order book combined of this fixed programs per year. But, sir, isn’t this number to less because my understanding is these fixed programs, the amount of orders that is expected is much, much more so. So since we have very-high market share in the products which you have mentioned, so why is order book only INR100 crore per year and not more? If the propellant cost as the cost of total missile very small, is that the reason we have only INR100 crore order book instead of much bigger number?

T.V. Chowdary — Managing Director

So where did you get thisINR100 crores?

Aman Vij — Astute Investment Management — Analyst

Last time an analyst had asked you this question. So out of that fixed programs we have what is the order book expected, so you mentioned additional INR100 crores per year.

T.V. Chowdary — Managing Director

Which program, ISRO program?

Aman Vij — Astute Investment Management — Analyst

No, no not ISRO, this missile programs, Slide number 20. Slide number 20, we have six missile programs, Akash, MRSAM, Agni, Brahmos.

T.V. Chowdary — Managing Director

Okay, okay. See these are — in these programs, the hardware and everything is coming as FIM, because Akash or MRSAM, Astra are these programs. So our portion is only the propellant and it is linked with the numbers taken for assembly DDM. So the PDL right now the quantities which are happening there it is that Akash program which was really going in a big way, that is almost now tapered down, it is tapering down. So that quantities have reduced. Other quantities to come and take over tit may take time. So that’s why we have a indicated a trigger effect.

Aman Vij — Astute Investment Management — Analyst

And we are as of now only doing propellants, we are not into the motors in this missiles as of now, right?

T.V. Chowdary — Managing Director

We are doing both. These projects — this is — BDL is making the hardware and all those and they are dependent on us for propellant. Whereas other programs and all those others, we are including the hardware, we are supplying exports to Israel and other countries, including hardware we are supplying, entire rocket motor, not just propellant. Similarly, the new projects like NGRAM and others, this includes the hardware also in our scope in rocket motor assembled.

Aman Vij — Astute Investment Management — Analyst

Yeah, you talked about your are developing motor for Astra missiles also. Is it Astra MACH 2 dual pulse motor are are only talking about Astra MACH 1.

T.V. Chowdary — Managing Director

We are not developing the motor, propellant is our development areas. Astra rocket motor and all by other agencies from DRDO.

Aman Vij — Astute Investment Management — Analyst

Okay, in this slide, sir, Slide 18, you have mentioned production and the TOT Astra motor — in-production under TOT.

T.V. Chowdary — Managing Director

Yeah, the first production order has come. But like you have mentioned that, it depends — execution depends upon the hardware to be supplied. Medial is still is in the initial stages for Astra. MRSAM, yes, we are getting continuously and we are regularly producing and delivering them, but Astra is still it has to pickup.

Aman Vij — Astute Investment Management — Analyst

But are we developing two-stage and three-stage motors for missiles?

T.V. Chowdary — Managing Director

For Astra you are talking?

Aman Vij — Astute Investment Management — Analyst

Any missile, sir. The advanced motors — advanced missiles where there is two-stage and three-stage.

T.V. Chowdary — Managing Director

As I mentioned to you you about LRSAM gear, we are with hardware gear.

Aman Vij — Astute Investment Management — Analyst

Okay, okay. Sure, sir. Final question, sir, on the defense side.

T.V. Chowdary — Managing Director

All export orders of rocket motors, all are with complete rocket motor, including hardware and everything.

Aman Vij — Astute Investment Management — Analyst

Okay, okay. And how much is export order out of our total rocket motor order so that just to understand the type where we will be providing both hardware and propellant very only propellant?

T.V. Chowdary — Managing Director

With hardware, we have the order book, I mean, the order book includes hardware exports is about INR100 crores. These are all complete rocket motor, it’s not hardware or it’s not propellant, its completely assembled rocket motor is exported.

Aman Vij — Astute Investment Management — Analyst

Sure, sir, and do we expect further orders in this where we are both the complete rocket motor?

T.V. Chowdary — Managing Director

Yes, yes. Only part of the development only got converted into a production orders. Now, there are other line which are — we have completed the development and demonstrated performance and all those, now they are converted into production orders.

Aman Vij — Astute Investment Management — Analyst

Last question from my side on the defense order book, which we have a INR330 crores, sir. We were expecting to execute much more than INR70 odd crores we have done in nine months. So was there any delay in, say, December quarter normally is a good quarter for defense. So do we expect very high ramp up in Q4 or do you think only next year we’ll be able to execute most of this defense order book?

Srihari Pakalapati — Chief Financial Officer

No. Actually we are expecting the billing to happen in Q4. Most of the billing is expected to happen in Q4. A lot of clearances and permissions are yet to come. So I think that will become — clearance and permission means — no, see these export orders, particularly they are shipped. So availability of ship and then containers because you require the ship which carries explosives. So unless we it bill it, it will appear in the papers. So we are expecting that to be completed in the fourth quarter.

Aman Vij — Astute Investment Management — Analyst

So you expect maybe like big portion — so defense at the start of the year we had target of maybe around INR150 crores for the full year, but we have done only INR70 crores. So do you think Q4 we will be able to make up for the lost or do you think next year only we can target this INR150 crore kind of run rate in defense?

T.V. Chowdary — Managing Director

So we expect some good numbers, we cannot say those exact numbers, but we can get — you can expect a good number to happen in Q4.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. Thank you for answering the questions.

T.V. Chowdary — Managing Director

We are finding a little difficulty in hearing. I think lot of strain we have to put on understanding the question. Is it possible to improve it further?

Operator

Sir, should I reconnect your line. [Operator Instructions] The next question is from the line of Niraj Mansingka from White Pine Investment Management. Please go ahead.

Niraj Mansingka — White Pine Investment Management — Analyst

Thank you for the opportunity. Just wanted to know LRSAM, MRSAM, NGRAM orders…

Operator

Mr. Mansingka, please use the handset mode.

Niraj Mansingka — White Pine Investment Management — Analyst

Hello. You can hear me better right now.

Operator

Sir, are you able to hear, Mr. Mansingka.

T.V. Chowdary — Managing Director

Its not clear. Your voice is very clear, but his voice is not so clear.

Niraj Mansingka — White Pine Investment Management — Analyst

I’m totally in the handset mode only, so I don’t know what to do. Should I connect again or should I wait?

T.V. Chowdary — Managing Director

I think maybe you can speak slowly, probably will be…

Niraj Mansingka — White Pine Investment Management — Analyst

S basically, we were expecting — we had 100% suppliers for MRSAM, LRSAMs and Astra, and we are not seeing much scale-up in your defense revenues. I know you said that Q4 you will be reporting the numbers, but can you say from a industry perspective, when do you expect a scale-up of MRSAM and LRSAM in the orders for your side?

T.V. Chowdary — Managing Director

The present numbers indications are around 25 numbers per month of MRSAM, LRSAM and Astra as 20 numbers per month. It is like that. LRSAM, MRSAM is already going on a debt level right now, we are supplying. But Astra is yet to come to that level. And this is the — these are the qualities which will come. Earlier in Akash the quantities were more, we were almost delivering 50 to 60 numbers in a month.

Niraj Mansingka — White Pine Investment Management — Analyst

Okay, so do you expect more scale-up for MRSAM, LRSAM because…

T.V. Chowdary — Managing Director

I don’t think it will go more than that, that 25, 20 numbers level only it will remain. And about NGRAM and other things, we are yet to know about the actual potential when it comes to full-scale production.

Niraj Mansingka — White Pine Investment Management — Analyst

Okay, got it. And so going forward, say next two years, which are the areas you see a large revenue growth in reported revenues for your firm?

T.V. Chowdary — Managing Director

Not this alone, its like, our turnover and order book and all are dependent on many other things.

Niraj Mansingka — White Pine Investment Management — Analyst

Yeah, yeah, we are aware of that. So wanted to know from the current whatever understanding you have?

T.V. Chowdary — Managing Director

We have export orders for almost 120, 130 numbers per month rockets alone, not just propellant casting, but full rocket motors. So that keeps us busy. In fact, that keeps us busy both of our plants, PDK and Katepally.

Niraj Mansingka — White Pine Investment Management — Analyst

Okay, the second question was on the services revenues are not reported this quarter. Any reason why the services revenue have not come in?

Srihari Pakalapati — Chief Financial Officer

Sorry, services? No, it was reported, defense and space services. Whatever revenue is there is came from the defense services only. The defense billing has not happened as expenditure.

Niraj Mansingka — White Pine Investment Management — Analyst

Okay, so the defense billing was coming in a continuous range over the last…

T.V. Chowdary — Managing Director

Sorry, I didn’t hear.

Niraj Mansingka — White Pine Investment Management — Analyst

The defense revenues are getting written on perpetual — permanent trend, but this quarter it has been significantly low. So what has changed that and the defense approvals are yet to come for acceptance of the orders?

Srihari Pakalapati — Chief Financial Officer

Actually, as per the accountings as per our this thing also, it is only our — we can cash it only in one sector, that is high-energy materials. Further — I mean information purpose we used to have the differentiate — we should differentiate between these two. But from now we wanted to add a commercial and non a commercial only.

Niraj Mansingka — White Pine Investment Management — Analyst

Okay. So I’ll come back to the queue. I have few questions, I’ll come to the queue.

Operator

Thank you. [Operator Instructions] The next question is from the line of Abhishek Poddar from HDFC Mutual Fund. Please go ahead.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Thanks for taking my question. Sir, regarding the order inflows in defense and explosives, how should we see sir in ’24 and ’25, and even this year if you can guide, how much order inflows are you expecting?

T.V. Chowdary — Managing Director

New orders what we are expecting at least further increase of INR100 crores in terms of this. This is built under various RFPs we are participating and. export and all those. That’s what is conservative target.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay, this INR100 crore is for this year, sir? Additional headcount for this year only, sir, ’23?

T.V. Chowdary — Managing Director

No, ’23, ’24 additional turnover. We will maintain about INR50 crores to INR700 crores order book continuously in ’23, ’24.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay. So you’ll get more orders and you will execute, but your order book will increase at least INR50 crores to INR700 crores.

T.V. Chowdary — Managing Director

In spite of the execution.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Execution. Sir, could you give a number of how much order inflow will be there in ’24 and ’25, some sense of it, sir? And if you can give a — a broad range if you can give, sir?

T.V. Chowdary — Managing Director

Yes, that’s what. With regard to further because so many things are in pipeline, now how many will come in this year because defense industry goes different way. It is not like a commodity industry where regularly every month there is an offtake or something. So order placement depends on various things which is very difficult to predict. But, yes, like I told you at least an additional INR100 crores or INR150 crores should come there.

Abhishek Poddar — HDFC Mutual Fund — Analyst

AS broader book build will happen, sir, for INR100 crore, INR150 crores, right. And, sir, this defense order book of, let’s say, INR350 crores that you have today, what is the execution timeline for this? How many years it’s going to be executed in that order book?

T.V. Chowdary — Managing Director

Most of them are in two years times.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay. So we can assume that about INR180 crores to INR200 crores of execution per year in defense can happen?

T.V. Chowdary — Managing Director

Yes.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Right, understood. And, sir, on the explosive side, we have seen that there has been a big increase in global explosive prices, almost 2 times increase and that kind of led to large increase in the order book for your competition. We haven’t seen similar kind of a growth in our explosive business. So is it that the volumes have not kept in pace or what has happened in that side?

Srihari Pakalapati — Chief Financial Officer

No, even in our case, you can see 60% growth in the previous year.

T.V. Chowdary — Managing Director

Actually, like we explained in earlier con calls, two years back based on the prevailing raw material prices and margins and all those, we were not very aggressive in fuel explosives area. So, that has paid off. In fact, that contained our negative growth in this area in terms of profit. Now the new tenders and other things will happen next year. So based on the current things, I think it may — our participation maybe a little more aggressive.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay, because sir, if the explosive prices have gone up by almost 2 times and if your growth is 60%, so that would mean that volumes are little down. Is that the case or…

T.V. Chowdary — Managing Director

Coal India, particularly Coal India we can see that we we are not there in Coal India for bulk explosives and all those. Because that has helped us because raw material cost was so and then — so our concentration was more on defense and all those rather than straining our sources. But now things have changed. Like, Mr. Srihari was explaining about last quarter this sector has — segment has contributed, and we are hoping that in the next financial year that might give extra 10 and our participation will increase.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay, sir. Could you give what is the volume you’re doing — expected to do this year in explosives and what volume growth should we assume next year?

T.V. Chowdary — Managing Director

We are doing — bulk explosives we are doing about 8,500 — 8,000 to 8,500 tons. Because we have only two location orders in hand and we are doing it. 8,000 to 8,500 tons that we are expecting because the [Indecipherable] is coming with the new tenders in coming year In June, So we — let us see if we get some good things.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay, I understood. And, sir, in the Slide number 4, if I look at the revenue breakup, for Defense and Space services the revenues have come down Y-o-Y to only INR2.8 crores. Any clarity there why that has happened?

Srihari Pakalapati — Chief Financial Officer

Because defense spending, as we explained in press, the defense billing is to happen in Q4. Most of the billing is deferred to the Q4. So I think that will be compensated in Q4.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay, okay, so some shipment probably hasn’t happened, but the execution of work has been completed.

Srihari Pakalapati — Chief Financial Officer

Almost to cargoes and most of the cargoes is ready and we are waiting to further dispatch it, most of it.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Understood. And sir, just the last question on the defense side. If I look at the missile programs order inflow expectation, there is expectation of large orders for Akash and QRSAM and MRSAM in next two years. So you did mention your order book will go up to INR650 crores including defense next year. That is only an increase of INR100 crore. Because of this large programs, would you expect large order inflow to come to us?

T.V. Chowdary — Managing Director

Yeah, it has to, because we are the only vendors for these. As on-date, we are the only vendors for these programs for clients. So whatever increase we get-in that it comes to us.

Abhishek Poddar — HDFC Mutual Fund — Analyst

So if I just take a number, Akash ship missile order inflow expectation is in the range of INR6,000 crore, INR7,000 crore for the first one and…

T.V. Chowdary — Managing Director

Right now, Akash missile is no more in the such large numbers presently. I think depending on the export orders received by BDL or other agencies, again Akash program will pickup. But as on-date, it is unlikely because I explained it is tapering. Okay, it is other programs, MRSAM, QRSAM, Astra. These are all now — and in all these programs we are the single vendor.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Sir, Akash prime was supposed to come is what we understand from the media reports and all.

T.V. Chowdary — Managing Director

Yeah, this is only in the initial stages. It has not yet come to full production. Right. And sir, let’s say, assume if they get a INR6,000 crore order for Akash prime, how much allocation will be to us? I think. I can’t just answer this question because not very sure about the contribution of ours and all those things. Maybe I think some 15% or something we may get. I’m not very sure.

Abhishek Poddar — HDFC Mutual Fund — Analyst

You said 15%, sir.

T.V. Chowdary — Managing Director

Yeah, that’s what. That’s also just — just to adjust other than the corrected.

Abhishek Poddar — HDFC Mutual Fund — Analyst

Okay. Thank you, sir. All the best, sir.

Operator

Okay. Thank you. [Operator Instructions] The next question is from the line of Niraj Mansingka from White Pine Investment Management. Please go ahead.

Niraj Mansingka — White Pine Investment Management — Analyst

How much was the defense revenues for the quarter?

T.V. Chowdary — Managing Director

Sorry.

Niraj Mansingka — White Pine Investment Management — Analyst

How much was the revenues reported for defense for the quarter?

Srihari Pakalapati — Chief Financial Officer

For the quarter. Absolutely, no billings.

Niraj Mansingka — White Pine Investment Management — Analyst

Yeah, that is why what my question was last time also when I was just on the call a few minutes back that we have seen a continuous defense order being reported. This quarter we haven’t seen. Even in Q3 of last year we saw defense order being reported. So what is that has changed because of this, the reporting is zero. I know you said there is a delay in acceptance by the government, but that is also an ongoing process. So just wanted to know from your side what might have led to zero reporting of defense revenues?

Srihari Pakalapati — Chief Financial Officer

The reporting of defense orders your are talking about, not the execution.

Niraj Mansingka — White Pine Investment Management — Analyst

Execution.

T.V. Chowdary — Managing Director

The reported revenues and zero for the quarter. Like, Srihari explained, the deliveries did not happen. Unless the deliveries happen, they don’t come into the revenue.

Niraj Mansingka — White Pine Investment Management — Analyst

So how much was the value of deliveries which did not happen for the defense for the Q3?

T.V. Chowdary — Managing Director

We have about, see — we have the stocks worth about more than INr50 crores at this point. Only inventory.

Niraj Mansingka — White Pine Investment Management — Analyst

Okay. Yeah, that answers my question. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Aman Vij from Astute Investment Management. Please go ahead.

Aman Vij — Astute Investment Management — Analyst

Thank you for the opportunity again. Sir, on this — on this ARD deal that RFP that we have a slide for. Sir, is it for one single-product or have we applied for multiple products?

T.V. Chowdary — Managing Director

Your are talking about ammunition?

Aman Vij — Astute Investment Management — Analyst

Yes, ammunition.

T.V. Chowdary — Managing Director

It is multiple products, different variants.

Aman Vij — Astute Investment Management — Analyst

Okay, okay. And on the. Second part, sir. The original bid which we had done, you had said that has still not opened or something like that. Any update on when do we expect any kind of either — when do we expect the orders, the information?

T.V. Chowdary — Managing Director

No, right now it is in the stage of NCNC technical trials. But those — samples, delivery, NCNC trials, they are delayed because of the present prevailing international condition, transportation and all those. So I think it may go to the end of calendar year ’23 it may go to roughly, because first they will do the technical evaluation of the samples, NCNC sample submitted, then only with qualified people only they will open the commercial piece.

Aman Vij — Astute Investment Management — Analyst

And what is the total amount of the orders, not one bid, but we see total quantum of that order which is expected to open up?

T.V. Chowdary — Managing Director

Your are talking about ammunition?

Aman Vij — Astute Investment Management — Analyst

Yes, yes, yes.

T.V. Chowdary — Managing Director

That RFP part, it goes to around 1 lakh numbers per annum.

Aman Vij — Astute Investment Management — Analyst

Sure, and this is for the Army, if I’m right?

T.V. Chowdary — Managing Director

Yeah.

Aman Vij — Astute Investment Management — Analyst

And, sir, any order is expected for the other agencies like MHA and CRPF?

T.V. Chowdary — Managing Director

There are other paramilitary, forces and police department. So there are all floating and they are sending the quires. So without waiting for that, like I mentioned to you, we are progressing in that development so that we can meet these requirements.

Aman Vij — Astute Investment Management — Analyst

So you expect other agencies orders to come earlier compared to the Army order?

Vishal Mehta — Stellar Investor Relations — Analyst

Yeah.

Aman Vij — Astute Investment Management — Analyst

Okay, and mid of H1 you said is other agency basically and army maybe end of FY’24.

T.V. Chowdary — Managing Director

Yeah.

Aman Vij — Astute Investment Management — Analyst

But you said it is only 1 lakh orders per year, right?

T.V. Chowdary — Managing Director

Yeah.

Aman Vij — Astute Investment Management — Analyst

So this amount then…

T.V. Chowdary — Managing Director

There are four different variants there also. It is between them around 4 lakh numbers per annum it comes.

Aman Vij — Astute Investment Management — Analyst

Okay, and we have bid for all these four variants? Do we have that…

T.V. Chowdary — Managing Director

Bid for all the four variants.

Aman Vij — Astute Investment Management — Analyst

And sir, this is developed totally in-house or we amortize with some…

T.V. Chowdary — Managing Director

We have a tie up with foreign OEM.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. And is it rough to assume like for solar the average cost was like 6,000 to 70,000 per SKU or per quantity. So this will be much more maybe like 7,000, 8,000 only per, say…

T.V. Chowdary — Managing Director

It’s not clear this.

Aman Vij — Astute Investment Management — Analyst

Yeah, so, sir, 1 lakh orders which you are saying per annum, does this translate to roughly INR80 crores to INR100 crore per year, in amount, 1 lakh per…

T.V. Chowdary — Managing Director

He wants us to come in terms of… [Speech Overlap]

Aman Vij — Astute Investment Management — Analyst

Sure, sir. Sure, sir. My second question is, sir. This year, two Expo’s happened ammunition Expo also and Defense Expo, any — you talked about HAL tie-up in terms of…

Operator

Mr. Vij, the audio is slightly muffled. Please use the handset mode.

T.V. Chowdary — Managing Director

We are straining a lot to understand you, that’s the problem.

Aman Vij — Astute Investment Management — Analyst

Yeah, yeah, this should be — this should be better, right?

T.V. Chowdary — Managing Director

Yeah, please repeat the question?

Aman Vij — Astute Investment Management — Analyst

Yeah. I was saying this year two Expo’s happened, one is Defense Expo and one is ammunition Expo also, something of that sort. So we have already disclosed we are tied-up with HAL. But any other tie-ups related to Munitions specifically because that is a big opportunity and I think we are among the very few players in India. So any tie-up with Munitions India or any other for exports, which we did in these two conferences.

T.V. Chowdary — Managing Director

We have no tie-up with Munitions India, but we have several tie-ups, MOU signed with another agencies, Indian industry where we are the partners for providing the energetics materials and components and assembly and the other partner providing the hardware and other things. We have several.

Aman Vij — Astute Investment Management — Analyst

Okay, okay. Yeah, and we expect any orders from these tie-ups in this year, FY ’24.

T.V. Chowdary — Managing Director

We are expecting. We expecting those and will use to get converted into because a lot of on RFPs are in pipeline. Situation already submitted, different stages of maturity.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. That helps. Thank you.

Operator

Thank you. The next question is from the line of Gursharan from GMA. Please go ahead.

Gursharan — GMA — Analyst

Thank you for taking my question. Just wanted to understand the order position from the Israeli orders which you had mentioned earlier. How much of percentage have we concluded, supplied?

T.V. Chowdary — Managing Director

Development and all we have completed. We received the production order. So, like we have explained, now the inventories are produced and build-up. So supplies and all those will progress. We have not supplied anything, zero supply even as the production order. We have started loading in our [Indecipherable] so that whenever will be arranged because transportation is not in our scope. Transportation, shipping is their scope.

Gursharan — GMA — Analyst

So the entire order is still outstanding as well as filling is concerned, preparation has been done, but it has not been yet shipped? Is that clear?

T.V. Chowdary — Managing Director

Because we have to keep on producing and storing. This will accumulate till they are lifted.

Gursharan — GMA — Analyst

All right. So any further orders had they come in the last quarter after that INR100 crore order which had come in?

Srihari Pakalapati — Chief Financial Officer

No we we get normal orders on a continuous basis. So, but whatever is material we have disclosed to the exchanges.

Gursharan — GMA — Analyst

Right. Okay.

Srihari Pakalapati — Chief Financial Officer

Multiple orders. Small, small multiple orders.

Gursharan — GMA — Analyst

Right. Thank you very much.

Operator

The next question is from the line of Parag Kulkarni, an Individual Investor. Please go ahead. Mr. Kulkarni, please go ahead with your question.

Parag Kulkarni — Individual Investor — Analyst

Sir, one thing I want to know. Do we have any plans for the stock split or the stock bonuses in the future because my concern is that liquidity.

Operator

Mr. Kulkarni, certainly the audio is unclear from your line. Please use the handset mode.

Parag Kulkarni — Individual Investor — Analyst

Am I clear?

Operator

Please go ahead.

Parag Kulkarni — Individual Investor — Analyst

Yeah, my concern is about the liquidity of the stock in the market. How do you see any liquidity? So do we have any plans to come up with stock split or bonus stocks in future?

T.V. Chowdary — Managing Director

No, not at this moment, sir. Definitely, I mean whenever we used to that, we’ll definitely inform you, but not at this moment. We don’t have any thought, I mean, at least think about it in this moment.

Parag Kulkarni — Individual Investor — Analyst

Yeah, because what I see is the volumes hardly in 5,000, 7,000, 8,000 per day. That is hardly any volume for stock growth and in longer run for the investors the growth is really delay for in this way. We understood your concern sir. Definitely, we’ll look into that.

Operator

Thanks, sir. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr. T.V. Chowdary for closing comments.

T.V. Chowdary — Managing Director

Thank you very much, sir, for your interest in your company and then very valuable questions and suggestions. I think we’ll come out with better results in the next week. Thank you very much.

Operator

[Operator Closing Remarks]