Centum Electronics Limited (CENTUM) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Centum Electronics Q1 and FI27 Earning Conference Call hosted by M&S Park Institutional Equities. This conference call may contain forward-looking statements about the company which are based on beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jazer. Thank you. I now hand the conference over to you, Jazer.

Good morning, everyone, and a very warm welcome to you all. My name is Juzar Haveliwala from Valorum Advisors. We represent the investor relations with Centrum Electronics. On behalf of the company and Valorum Advisors, I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year, 2027. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainty, which could cause actual results to differ from those anticipated. Such statements are based on management deals as well as assumptions made by information currently available. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Nikhil Malavarappu, Joint Managing Director, and Mr. Sundarajan Parthasati, the Chief Financial Officer. Without any further delay, I request Mr. Nikhil to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Jazeera, and thank you, and good afternoon, everyone. Welcome to our earnings conference call to discuss performance of the first quarter FY27, and let me extend a special thanks to our hosts at Vendors Park for today's call. Let me start by taking you through the key business highlights for the quarter, after which our CFO, Mr. Sundararajan Patisati, will take you through the financial performance in greater detail. We have started FY27 on a steady note, with revenue growth in our standalone business and continued strengthening of our strategic positioning across high-reliability electronics. At the outset, I would like to highlight that the first quarter was somewhat muted compared with our expectations for the full year, both in terms of growth and margins. This is primarily a function of the quarterly variations in project execution and revenue phasing, particularly in our bid-to-spec business. Based on the momentum we are seeing across our businesses, our order pipeline, and customer engagements, we are confident that the stronger execution expected in the subsequent quarters will enable us to deliver against full-year growth objectives. As we mentioned consistently, we encourage investors to look at our performance and outlook on a full-year basis. During the quarter, standalone revenue grew 11% year-on-year to 205 crores. While we closed the quarter with a standalone order book of approximately 1,800 crore, representing a robust 31% year-on-year growth and providing strong visibility for future growth. One of the most significant developments during the quarter was the successful completion of the restructuring and exit from our overseas subsidiaries. As many of you would recall, we initiated this strategic exercise last year with the objective of sharpening our focus on our core India business and ensuring more disciplined capital allocation. During the quarter, the French court approved the acquisition of substantially all operating business and employees of Centum TNS Group, SA, and certain subsidiaries to the successful bidders, which were MBDA and SII. Following the transfer, these entities ceased operating activities and were deconsolidated from our financial statements, effective 4th of June, 2026. Subsequently, the French Court converted the process into liquidation judiciary and appointed a judicial liquidator on 2nd July, 2026, to oversee the remaining wind-down activities. Importantly, with the operating businesses now transferred and restructuring process substantially completed, we do not expect any further liabilities in relation to these subsidiaries. This allows us to put this chapter behind us and move forward with a much sharper focus on our core India ESDM platform with greater management attention and capital directed towards our standalone business. Sundar will take you through the accounting impact of these developments in greater detail. Let me now move to our operational performance and business highlights. Our business specification, or BTS, business continues to have a strong underlying demand environment. Revenue in the quarter was impacted by the project execution schedules, but our order book remained healthy and grew approximately 40% year on year. Looking ahead, we expect continued strong order intake through the year across several of our key programs, particularly in the areas of space. Radar, electronic warfare, and air navigation. This gives us confidence in the growth trajectory of the BTS business as we move through the year. Our electronic manufacturing services, or EMS business, also continue to perform well with the revenue growing 20% year-on-year and autobook expanding 23% year-on-year. We are ramping up well with our semiconductor equipment customer, and the demand remains solid and is in line with our expectations for the current year. And importantly, based on customer engagements and opportunities we are seeing, we believe there is visibility to surpass our current expectations over the next one to two years. More broadly, we continue to see increasing opportunities across industrial automation, electrification, and grid automation. During the quarter, we received a Strategic Partner Award from a leading global industrial and energy conglomerate. We value this recognition as a strong endorsement of our engineering capabilities, execution track record, and longstanding customer relationship. This also reflects an important area of focus for Centrum going forward. We are increasingly working with global customers who are implementing localization strategies in India while simultaneously responding to growing global demand for advanced electronics. We see an opportunity to leverage our engineering capabilities, manufacturing scale, and high reliability expertise to become a deeper partner to these customers as they localize and diversify their supply chains. As part of this strategy, we have initiated the NPI process for a number of electrification and grid automation products. These programs are expected to start contributing meaningfully to revenue growth over the next two years and provide another important growth avenue for our EMS business. Across our other focus areas, we are tightly integrating our engineering services and EMS teams to deliver differentiated design-led manufacturing solutions, enabling customers to seamlessly transition from product design to high reliability manufacturing. This approach strengthens our value proposition, enhances customer engagement, and supports improved margin profiles. We have made encouraging progress in building this capability and are optimistic about securing our first DLM program wins in the coming quarters. Our objective remains to move further up the value chain by combining our design and engineering expertise with advanced manufacturing capabilities. In summary, with a robust order book, strong expected order intake, Expanding customer engagements and a healthy opportunity pipeline across both BTS and EMS, we believe Centrum is well-positioned to capitalize on these structural opportunities. With that, I would now like to hand over the call to our CFO, Mr. Sundar Rajan Patasarathy, who will take you through the financial performance for the quarter in greater detail.

Thank you, Mr. Nikhil, and good afternoon, everyone. Let me now take you through the financial highlights for the first quarter of Financially Ad-Medicine, President 27. At the standalone level, revenue from operations for the quarter stood at at least 205 crores, registering a healthy growth of approximately 11% year-on-year. EBITDA for the quarter stood at 23 crores, which translates into an EBITDA margin of 11.28%. Profit before tax stood at 18 crores, while profit after tax stood at 14 crores, with a back margin of 6.59%. While margins during this quarter were impacted by relatively lower contributions from the BTS business, we expect the revenue mix to improve as execution on key BTS programs accelerate over the coming quarters. Before I move to the consolidated performance, let me briefly touch upon the accounting impact of the overseas restructuring. During the quarter, following the approval of the French Code and the transfer of substantially all operating businesses and employees to the successful bidders, the overseas entities were deconsolidated, effective 4th of June. Consequently, the financial statements reflect a one-time profit on deconsolidation of these 94 crores. While the remaining entities are now under liquidation proceedings. These developments provide greater transparency into the performance of our continuing operations and sharpen our focus on the core India business. Coming to the consolidated financial performance, revenue from operations for the quarter stood at INR 204 crores, representing a growth of approximately 14% year-on-year. EBITDA stood at 24 crores, with an EBITDA margin of 11.56%. Profit from continuing operations after tax stood at INR 11 crores, and including the one-time gain arising out of the deconsolidation of the overseas subsidiaries, the consolidated profit after tax for the quarter stood at INR 106 crores. Our overall performance continues to reflect the resilience of our core India operations, well supported by healthy execution across both our PTS and EMS businesses. Robust order inflows and sustains demand. We have an order book of approximately $1,800, up 31% year on year. Thank you. We're on your growth. Happy for the coming years. Confident in the strength of our business fundamentals, with a focused India ESGM platform, a healthy order book, expanding customer engagements, and a strong opportunity pipeline across both BTS and EMS businesses.

Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sai Vijay with Capstock Securities. Please go ahead.

Good afternoon, sir. Thank you for the opportunity. So my first question is regarding the BTS segment. So given the higher project lifecycle of over two and a half years, our order book has almost doubled since FIS24. So can we expect an accelerated revenue recognition going forward for the BTS segment?

Thanks for the question, Jay.

The simple answer is yes. With the increased order intake that we've had, we expect to have, you know, clear, strong revenue growth in the BTS business this year and the coming years also. Like I mentioned in your call, so there is a high level of quarterly variations, but on a full year basis, I'm very confident.

I'm sorry, sir, but your voice is breaking.

So I was just explaining that we do absolutely expect that there will be a healthy growth of the revenue in BTS segment as a result of the increased order book. We have some quarterly variations because of the lumpy nature of this business and the contract, but on a full year basis, we expect to have a strong growth in revenue.

All right. So just one doubt regarding the advances, around 210 crores of advances that we currently have, how much of it

is coming from the BK segment?

So, I would say, the majority of that is coming from the BTS segment, which is given. Thank you very much, sir. And congrats on the result.

We'll get back on.

Thank you. Our next question comes from the line of Pratik Srivastava with Neresh Wisdom. Please, great.

Yeah, again, congratulations on a great set of numbers and great progress in the BPS segment. My question is about the semiconductor equipment. This has been referenced in the call also many times. I just want to understand, you know, what this semiconductor equipment, can you just give more details on this semiconductor equipment? Again, who are the customers? Have you signed any large global here in that? So just want more details on this semiconductor equipment, sir.

Sure. Thanks for the question, Pratip. Yes. So first of all, this is part of our EMS business. So it is essentially where we are manufacturing various types of box builds and PCVAs that go into the equipment used in manufacturing semiconductors. So, if you talk about The processes such as photolithography or etching and some of these critical processes that actually enable the manufacturing of semiconductors, they are supplied largely by a few, very few, large global OEMs that supply these equipment to the foundries, essentially. And, um... In terms of where we are, we have a global OEM, one of these key global OEMs that we have added as a customer. And we have ramped up over the course of the last year, and we continue to ramp up in terms of new part numbers and products that we're delivering. On previous calls and so on, I had mentioned that our revenue, which was from this segment, which was practically zero in FY25. It was in excess of $10 million or over $100 crores of revenue contribution in FY26, and we expect this to get to the range of $25 to $30 million in the coming one to two years. And this is where we are seeing a strong visibility, and it's in line with our expectations.

Got it, sir. And since this is EMS and not BTS, what are the margins in this business, and what are the margins we are looking forward in future in this business, sir?

Yeah, with the EMS business, considering the sectors that we are addressing, these will be in the range of about 10%, if you start. They can vary slightly, a little bit up and down, depending on the customer and segment a little bit, but I would say not a huge amount of variation. Typically, this being a cost-plus model, 10%, 11% is a fairly benchmark beta margin.

And in future, can we use the learning from this and get more into sort of BTS sort of a model where the margins could be higher in this segment?

Yeah, so, you know, this is where I was addressing the point around the design-led manufacturing, where we are, while we have a BTS, we run our BTS separately. In the form of, you know, actually building products for defense and space and so on. We also had an engineering services team that was originally intended or created for this overseas subsidiary that we've had. But with that being basically behind us now, we are refocusing this part of our business to work very closely with our EMS team and our EMS customers to offer more, you know, end-to-end solutions or design-led manufacturing solutions. So as those progress, we do. I expect to have a higher margin contribution from those businesses.

Got it. Thank you. Thank you for answering my questions, sir, and all the very best.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, press star and one on the telephone. Our next question comes from the line of Darshan Gala with Gala Investment. Please go ahead.

Hi, sir. An audible? Yes, you are.

Hi. Hi, sir. You were just explaining how the margins would be much higher in the semiconductor part of the business. When can we expect those revenue to start meaningfully contributing?

So I didn't talk about higher margins in semiconductor. I said the revenue growth, we have a good visibility on semiconductor, but this is fundamentally EMS business. So the margin growth rate is 11%. Correct.

Sorry on that, but about the revenue, when can it start meaningfully contributing?

Sorry to interrupt you, management. Your voice is breaking.

Is this any better?

Slightly better, I can say, so it's still making.

How about this? Is this okay?

Yes, this is loud and clear. Thank you, sir. You may proceed.

Okay. Yeah, I was explaining to Darshan that the contribution of revenue from this business was zero in FI 25 and it ramped up to 100 crores in last year, more than 100 crores. We expect this to... Kind of double or triple in the next two years. So you will see that coming in this year as well as a further ramp up in the next year. That's what we see.

Thank you, thank you. I'll get back in the queue.

Thank you. Our next question comes from the line of Karan Samwal with Nivash Jai. Please go ahead.

Thank you for the opportunity. So, I wanted to understand something in the line what previous participants asked. So, semiconductor, we have already, you know, we have already rendered the semiconductor division in the last two quarters, maybe Q4 and Q3. So, should this, you know, execution remain stable and, you know, the customer tests our product in the real condition, and would there be a linear growth or there can also be an exponential growth as, you know, we also... Qualify the simultaneous. Other parts for the same question.

Let me make sure I've understood the question correctly. So your question was with regard to the semiconductor equipment, if these have been tested and validated in the, you know, the real environment. And then your second question was with regard to growth, whether you see that it's an exponential growth or linear growth. Is my understanding correct?

Yes.

Okay. So, yes. So, to your first question, absolutely, they are in production. So, this is, first of all, a very highly recurring business. You will have maybe certain variability that comes with longer CapEx cycles in the broader semiconductor manufacturing industry. But at least for the next two years or three years, there is a fairly strong visibility in terms of the demand in the industry. And as a qualified partner for these global OEMs, these products typically have very long product life cycles, and so we have a fairly good level of recurring revenue from this part of the business. Also, in the last year itself, for all the products that are already in production, we have gone through the full qualification process and requirements. That is behind us, and now it is in serial production. But we continue to add also new part numbers from these customers, and, you know, as and when we do that, they will go through their respective qualification processes and then go into production after. So I would say we are very well integrated and now in a fairly mature process in the supply chain. Your second question about growth, I think, you know, as we mentioned, this has already been a very steep and strong growth, you know, considering the fact that this was pretty much zero in terms of revenue in FY25, exceeding 100 growers in FY26, and as Sundar was mentioning, we expected to... to more than double, you know, going forward in the coming year and so on. So clearly a steep growth over these couple of years, and we expect, of course, that it will stabilize at a point in the next maybe one to two years, and then it should be fairly stable after that.

So, it would still be a recurring demand after 1-2 years, right?

Yes, yes.

Understood. And for the products that we are manufacturing for these semiconductor equipment players, who are we competing with in India or are we competing with players in other geographies? Where is the competition placed in position for the products that we are already manufacturing or will be manufacturing in the future for the semiconductor plant?

So, in terms of MS manufacturing, sorry

to interrupt your management, again, your voice is breaking.

Yeah, so I was saying that with regard to the competition, as far as PCBA and box build manufacturing for EMS type of business, We are the main supplier in India. We are the first major supplier in India. Our main competition is in Southeast Asia, basically in Malaysia. So there is nobody, I would say, in India that we would directly be competing as far as EMS business is concerned. Having said that, they are adding... There are other parts of the supply chain, and so there are other good companies that have been benefiting from the general shift that they are looking in terms of increasing their overall spend and sourcing from India.

So, also, are we in talks with some other semiconductor clients for similar products or we can't supply similar products to their competition basically, the customer's competition. How is the understanding over there?

First of all, in the EMS business, the design and the IP of the product belongs to the customer, so we are not allowed to sell the same product to other players in the space. Having said that, we are in some preliminary-level discussions with other customers also. Who are looking at India as a supply base for their, you know, as part of their sourcing and supply chain strategy. But that's still at an early stage. You know, we will update that as we progress.

Understood. Thank you.

Karan, Sergeant Trump, can I request you to come back for a follow-up, please? Thank you.

Next question is from Lan of Alok Shah from Shri PMS. Please go ahead.

Hello, am I available? Thank you.

Yes, sir, I had two questions. First is that can you throw some light that how India is evolving into the space industry and what are the opportunities that ISRO can give us in next two to three or four years? And my second question is the space-based surveillance program that was initiated during Operation Sindhu, I think. Where it is now, what is the opportunity we will get, and can you throw some light on that also, sir? Thank you. Thanks.

Thank you.

The space opportunity is quite an exciting one, I would say. We have been in the space now for over 25 years or close to 25 years, and Greg moved along the value chain from doing niche components to modules and subsystems to now building complete payloads. And our objective is to go further also into satellite integration and so on as we move forward. In terms of the broader ecosystem, I think there's been a lot of positive development in the form of startups coming with very good and innovative solutions. You all must have recently seen the success of the SkyRoute. Launch vehicle, I think, which is a major milestone for the country. So there is clearly a lot of innovation. There is clearly, from a demand perspective also, you know, a need coming in from various different end-use applications. As far as we are concerned, the major end applications that we are addressing today are largely for defense and military requirements, but there are also certain contributions that go into scientific missions and some communication kind of equipment also. And with regard to your question regarding the SBS program, this is moving well. We have started to book some good orders from this program, and we expect in this year that we will have a very strong order intake coming from this program, essentially. So we are quite positive about that, and, you know, apart from that, we are also executing a major program for payloads or electronic warfare-based payloads, not specifically part of SPS program, but very, very closely aligned with it. And we expect those also, once delivered, will have repeat requirements in the coming years as well.

Okay, sir. Thank you. Yes.

Thank you. Next question comes from the line of Harish Subramanian with Unifi Capital, Private Limited. Please go ahead.

Hi, good afternoon, Nikhil. Good afternoon, Sundar. My question was on the VTS segment where the order book has inched up over time. So, as far as the revenue mix is concerned, do you see it sustainably move? Beyond the 70-30 sort of a ratio, I'm much in favor of BTS in a sustainable manner. So that is the first question.

Thanks, Arish, for the question. So I think we may – fundamentally, first of all, we are seeing strong growth happening in both businesses. We may see in one year, maybe in the very short term, one year or two years, you may have slightly a little bit higher contribution from the BTS, but I would not say it is hugely different. I mean, we may have a... Instead of 70-30 split, it may marginally be favorable towards the BTS side, but again, not hugely, you know, drastically different from a split standpoint.

Another one on the revenue growth, you'd say that the medium-term target in terms of revenue growth for India business is at 25% plus, but for this year, do you think you'll still maintain that, or will there be anything less than 25% in terms of revenue growth?

We will, Harish, we are confident of reaching that 25% level, and we'll maintain that for now, we don't see any reason to change it significantly based on the order book trend and the projects around execution. Okay, that is good.

Just a last question for me on the new list that you mentioned. Yeah, the last question on the new wins that you mentioned, on the space and defense application, the complex test systems. If you can talk a bit more on that and what they can open up.

This is a part of what we deliver to our export customers. It's part of our, I would say, value-added engineering service offering that we give to our EMS customers. This is, so it was, you know, roughly about a... I think 55-odd crore order that we received from this export customer for this program. I would say, you know, these are – the nature of this business is it is, you know, a test bench or a test system is not always a recurring type of revenue. They are based on application-specific or, you know, they come up from time to time. So, um... It is, I would say, volatile in terms of demand. You have certain years where you have high order intake and certain others which are lower. But this one is a particularly substantial one that we received, and we continue to offer this as a solution to differentiate ourselves with our major customers. And, you know, it has a small revenue contribution. I would not say from a revenue standpoint it's going to make a big impact in terms of the, you know, future prospects for the company.

Thank you. Thank you.

Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Diyar Jain with Cephar Capital. Please go ahead.

Hello, sir. Thank you for the opportunity. So, can we provide any guidance for FI27 and FI28 terms of revenue and margin? And also how their scope of export and domestic is going to be going forward.

Yes, so we still maintain the similar trend of about 25% on revenue growth for this year, and for next year also, that's the visibility that we see as now. And the margins, last year we reported about 12.5%. We are aiming to move it up and above about 13%, and that could remain stable or slightly improved. In the next year, but of course, it's too early to comment on the next year. We need to look at the order profile as we keep booking the orders during the year. And in terms of our export, I think it will still remain in the order of about 52-55% or even maybe higher, given the orders that we see on the growth that we see in EMS, but it could be in the same range also. Nothing much expected to change.

Okay, so thank you and all the rest.

Thank you. Next question comes from the line of Darshan Gala with Gala Investment. As a follow-up question, please go ahead.

No, no, my questions have already been answered. Thank you.

Thank you. Anyone who wishes to ask a question may press star and one. Our next question comes from the line of Vinit Khanna, an individual investor. Please go ahead.

Hi. Am I audible?

Yes, sir, you are.

Yeah. So, Nikhil, question for you. In the previous calls, you have updated or shared details about Some of the BTS initiatives you have done. In particular, the one which you had done for Virupaksha, the second one being a recent win you had for the helicopter platform for AELSA radar. And another initiative was with, I think, Garden Reach Shipbuilder, where, you know, some upgrade was there for the electronic subsystems. Can you just provide a current update in terms of where we stand with respect to these?

Yes, sure. Thanks for the question, Vinit. So, yeah, we're all quite excited, making good progress on all of these programs. So, with both the Virupaksha and the UHM programs, These are development programs, so we have completed, I would say, the first phase of, on the UHM at least, we've completed the first phase of the design reviews and so on, and we are well underway in terms of the realization of the first prototypes for the program. So things are moving well, and we expect to have these first photos in the next year successfully demonstrated to the customer and subsequently deliver the order, After which we will be waiting for... HAL to look at the serial production quantities. So in short, it's progressing well. Avirupaksha also, we are in the design of the product. We expect also to have those development orders completed maybe in Q4 or Q1 of the next, you know, Q4 or Q1. And with the TACAN system also, similar progress in terms of the delivery and the development. This is a technology partnership that we've established, so it doesn't involve a significant amount. There is some localization design engineering work that is being done, which is actually an important part of the development effort here, but it is progressing well, and this again. In the beginning of next year, we expect to have the first deliveries done, and also we are very closely, you know, monitoring and awaiting, you know, some further orders for this system in the coming one or two quarters.

Okay, thanks, Nikhil. Just to follow up on, I think there was some discussion, previous calls about direct engagement with armed forces. So, so far, our engagements are mostly with the Defense PSUs or DRDO and ISRO. How are we tracking on direct engagements or are there opportunities which are emerging in that space?

Yes, so those also are progressing well. I mean, you know, even, you know, when we talk about some of these system-level opportunities, although there is... So our direct customer may be a PSU like HAL or GRSC and so on. These systems are very critical to the platform and capabilities, so there is already an enhanced level of engagement that we are having with the end users. But beyond that, as well, we are also... You know, in various levels of discussion and answering RFIs and so on, on full system kind of opportunities with the Armed Forces Directorate. So these are, we say they're in progress, but, you know, we will update as and when they come to a higher level of maturity.

Yeah. Thank you. Just one last one is on, I mean, from your side, you highlighted the four bullet points in the BTS section of the slide. Is there anything which you want to share in terms of, you know, something new which is happening, which, you know, probably a slide is not capturing? You are doing some work which, you know, potentially is something or seeding something which has some potential. I mean, just share some color on if something is not captured in the slide, which you want to share maybe verbally.

No, I think there's a lot happening in this side of the business, much more than we can capture, I would say, in four bullet points. But I would say there's clearly a major ramp-up that we are doing in terms of engineering team and capability across different skill sets. And also focused more on the objective of our system integration kind of, you know, system integration objectives. So we are bringing in new talent and people that will enable us to get there, and also to ensure that we are executing and delivering these new programs. And answering other new opportunities to the right level of satisfaction of the customers. So I would say at a high level, that's the main thing I would maybe add or add color to what's actually happening. Thank you so much.

All the best.

Thank you.

Thank you. Anyone who wishes to ask a question, press star and one. Our next question comes from the line of Preet Gopani with Unique PMS. Please go ahead.

Hi, team. Thanks for the opportunity. Most of my questions have been answered. I just have one question in continuation with the last participant. So, in your AGM yesterday, you had alluded that, you know, we are trying to work with a global customer in the BTS space. And the opportunity is not far away. So can you just elaborate a little bit on that? How big of a business can global BTS be for us?

This is a specific opportunity that we were talking about with regard to BTS for an export customer, specifically around electronic warfare. So, you know, this is, I would say, a beginning for us. There are various levels of discussion happening with various different customers. So, you know, it's a little bit early to quantify what it could be in several years, but I think there is clearly a need and a demand for this, and, you know, as we close some of these opportunities, they will have a meaningful contribution both in terms of revenue and margin to the overall business.

Oh, okay. Uh, but, uh, on a broader level, once businesses like this, let's say global BTA starts contributing to our, uh, PNL, do you think that it will be at a higher margin than, you know, uh, the BTA that you do here, the domestic BTA business?

No, I would say we're still targeting around the 20-plus percent kind of margin profile, but the main difference, which is the reason why we like export BTS business in some of these cases, is that they're not

all tender-based.

You know, it's not a L1 type of business where you're going to get a lot of money, but you It's zero or one. They typically have a relationship with a customer, and you can come to a reasonable agreement on some of these things. So that's what we like about some of these export kinds of opportunities. Of course, once... These systems that we have built, whether it's like the one that we're doing for the UHM or some of the other products that we're developing, there will be major demand for those type of equipment and systems for overseas customers. We have not yet come to a stage where... We are answering, you know, opportunities because we're still in the development stage, but when those come, which are system-level opportunities for exports, yes, those can absolutely have a higher level of margin profile, you know, even beyond.

Perfect. Thank you so much. All the very best.

Thank you.

Thank you. Our next question comes from the line of Aluf Shah with SRE PMS. Please go ahead.

Yeah, also, just one last question. We had exhibited a groundbreaking ceremony at KIDB Aerospace Park at Bangalore, Seoul. Can you let me know what is the status? Have we started construction of the facility? And secondly, what is the CAPEX plans for this year and next year? Thank you.

Sure. So, this one, the design stage is complete, and we'll be starting the construction soon. However, this is not, the land belongs to another group company, private limited company, so we don't have to invest anything from Centrum Electronics in this year. So next year, once the shell is ready, as we start building the factory and all the MEP, HVAC systems, and so on. And clean room, great room ordering, plant machinery, and so on. But towards the end of next fiscal, the devx flow could start.

And on the whole, Comfortable line of Ashit Koti with an individual investor. Please go ahead.

Just wanted to understand with regards to various opportunities available,

where do we stand vis-a-vis competition, major competitors like in different areas where we are operating?

Yeah, I would speak about specific companies. Good morning, everyone. This is a good news story. And the domestic, defense, and space products, or BTS business, we have different sets of For each of these businesses, they are not the same. I would say... I think there are certain areas, especially if you talk about the BTS side of the business, where, you know, we in certain areas, especially things like space. And we are making very, very good and strong progress from a system's perspective on things like radar and EW, where there are some competitors that have been there maybe a little bit ahead of us, but from a capability standpoint, I think we are, you know, quite, I would say, on par. In these areas. On the EMS side of the business also, I think, you know, we have certain segments and differentiators where, especially when it comes to

small customers, some

unique manufacturing requirements, supply chain complexity, these are all things that I think we understand quite well. And, you know, We consistently see that when we work with these customers that they have a strong preference to work with us. I think on certain areas that when it comes to very high-volume type of business, things like consumer electronics and so on, Um, that's where probably, um, You know, that's not our cup of tea. Our competitors have set up an ecosystem much more aligned and tuned for those type of segments. That's in short.

The reason why this question was, like, companies like Astra or Database and a couple of other players, which are specializing, and are they ahead of us?

So as I mentioned, there's two things. One is there are areas that we are ahead compared to them, space and so on. There are other areas where they have been in the business for, or in these specific domains at least, for longer than us, but from a capability standpoint, as I mentioned, I would say. Quite close to being on par.

Okay.

These are the companies that we run with very various projects. I mean, as I mentioned, even on the UHM program, when we had qualified for that, there were more than 10 bidders who were interested to participate, but only three shortlisted and of which we were at once. So I would say some of these are good. You know, case studies in terms of proof or case, proof in point in terms of capability recognition.

Sir, who are the other two? I cannot disclose that. Okay, sir. Thanks a lot.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

Sure. Thank you all for participating in this earnings conference call. I hope we were able to answer your questions 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 do reach out to our investor relations managers at Ballroom Advisors. Thank you. Thank you, Jusev.

Thank you so much, sir. Ladies and gentlemen, on behalf of Centrum Electronics, that concludes today's conference. Thank you for joining us and you may not disconnect your lines.