Data Patterns (India) Limited (DATAPATTNS) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Data Pattern Cilia Limited Q4 FI26 Onyx Conference Call, hosted by GoIndia Advisors LLP. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Prayasi Patel from Go India Advisors. Thank you and over to you, ma'am.

Thank you. Good morning, everyone, and welcome to Data Patents India Limited call to discuss the Quarter 4 and FY26 earning calls. We have the senior management of the company on call, Mr. S. Rangarajan, Chairman and Managing Director, and Mr. Venkate Subhamanyam, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company may face. May I now request Mr. Rangarajan, sir, to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.

Thank you, Triassi. Good morning, ladies and gentlemen, and a very warm welcome to all of you to the Quarter 4 and Full Year FY26 Learning School of Data Patterns, India Limited. We sincerely appreciate your continued trust, support, and participation. I hope all of you had the opportunity to review your earnings presentation, which has been uploaded on the stock exchanges and our company website. Before Venkat takes you through the financial performance in detail, I would like to briefly share some key business and operation highlights for the year. FY26 has been a significant year for data patterns. Marked by strong execution, healthy order flow inflows, continued capability expansion, and increasing participation across strategic indigenous defense programs. During the year, we continue to strengthen our position across radars, electronic warfare systems, avionics, communication systems, and strategic defense electronics, supported by our strong in-house design engineering capabilities, built over nearly three decades. One of the key highlights of the year has been a strong momentum and order inflows. During F526, the company recorded order inflows of approximately 1121 crores, increase of 216% year-on-year, reflecting healthy demand across multiple defense and aerospace programs. The order inflows were well diversified across radar systems, avionics, electronic warfare, services, and strategic electronics applications, demonstrating increasing customer confidence in our technological capabilities and exhibition track record. The order book as in date stands are approximately 2062 pros, including orders negotiated, which provides a strong revenue visibility over the coming years. In addition, we continue to see a healthy pipeline of opportunities across radar systems, electronic warfare, and advanced defense electronics. Other than the order book, additional single vendor contracts based on already supplied products, Our earlier investments made towards realizing EW suites, including self-production jammer pods for Indian fighter aircrafts, I've been well received by IIF, and we're poised to take the next steps for flight testing. This will lead to revenue during the medium term. The opportunities being addressed by data patterns with in-house developed large systems already delivered to customers has the immediate requirement to address strategic space-based surveillance and mitigation, allowing data patterns to substantially increase revenue in the coming years towards building an order book of at least three years' revenue, ensuring predictable growth. We are entering into an exciting phase in India. With the defense and aerospace industry set to grow substantially to reduce reliance on imports, especially in this geopolitical situation. Further, with the advance of AI in all phases of our business, Data Patterns has leapfrogged into absorption of AI for processes as well as technology and products. This will allow Data Patterns to introduce new world-class products quickly to address the awning gap on Indian capabilities and products. We have also repositioned some of our products to address the growing requirement of drone detection, spoofing, and jamming with both radars and ESM products. These are in advanced phase of development and expect to bring in additional revenue in the medium term. We are investing in expanding our product development across radars for airborne platforms. Including surveillance and fire control, including maritime applications, which were either to the domain of Indian development agencies and foreign OEMs. We expect these to bring in revenue over the next few years and also allow exports of complete products. Our export business also continued to progress steadily during the year. The export order book as on date stands at approximately 53 crores, and exports remain an important strategic pillar of our long-term growth roadmap. We are actively engaging with customers in Europe and other international markets while strengthening our export-oriented marketing and business development initiatives. We continue to execute repeat business from the UK and expect export momentum to improve meaningfully as our complete system capabilities mature further. We believe that our revenue from exports will increase starting this year. As most countries have increased in their spend on defense, in the present geopolitical situation, we believe that the products and capabilities offered by data patterns will allow even Western countries to procure from data patterns, leveraging our capabilities and much shorter time frames, LVD time frames, meeting their requirement. During the year 2425, we also achieved an important milestone with the successful development and export of transportable precision approach data to a European country, including successful site acceptance testing. This reflects not only our technology capabilities, but also the growing acceptance of Indian defense systems and engineering expertise in international markets. We are also getting additional inquiries for these products from various countries. We believe the global defense industry is entering a multi-decade investment cycle. Given by rising geopolitical uncertainties, accelerated modernization programs, and increasing focus on self-reliance in defense manufacturing, advanced electronics, radar systems, electronic warfare, and intelligent surveillance capabilities are becoming central to modern defense preparedness globally. This creates significant long-term opportunity for India's indigenous defense ecosystem with its strong in-house design capabilities. Advanced engineering expertise and proven execution track record. Data patterns is well positioned to capitalize on this opportunity. Coming to our financial performance, FI26 has been another strong year for the company. Revenue FI26 grew by 31% year-on-year to 925 crores, while EBITDA increased by 35% year-on-year to 371 crores. Looking ahead, the outlook of the Indian defense sector remains extremely strong. We remain committed to delivering sustainable and profitable growth while continuing to invest in future technologies, strengthening our complete systems portfolio, and maintaining a strong balance sheet. We continue to target revenue growth of around 20-25% over the short term while maintaining healthy EBITDA margins of 38-40% and preserving our net cash status. Most importantly, beyond financial performance, we remain deeply committed to contribute towards India's journey of technological self-reliance and strategic defense capability development. With that, I would now like to hand over the floor to our CFO, Mr. Venkata Subramaniam, to take you through the financial performance in greater detail.

Thank you, sir. Good morning, ladies and gentlemen, and thank you all for joining us today. We are pleased to report another strong year of operational and financial performance for our data patterns. FY26 reflects a continued strength of our execution capabilities, resilient business model, and increasing demand across strategic defense and aerospace programs. Let me take you through the key financial highlights for the quarter and full year FY2526. Revenue from operations for FY26 stood at 925 crore. As compared to 780 crores in FY25, registering a healthy growth of 31% year-on-year. Gross profit for the year increased by 35% year-on-year to 585 crores due to increase in revenue and favorable product mix, while gross margins improved to 63% compared to 61% in FY25. Ebitda for FY26 to the 371 crores has again 275 crores. In the previous year, reflecting a growth of 35% year-on-year, EBITDA margins improved to 40% supported by operational efficiencies and improved absorption of the fixed cost. Profit-ask tax for FI26 stood at 271 crores, registering a growth of 22% year-on-year, while pack margin remains healthy at 29%. Coming to the quarterly performance, Q426 revenue stood at 345 crores, while the revenue was lower by minus 13% year-on-year. Due to timing of execution of certain programs, revenue nearly doubled sequentially with the growth of 99% quarter-on-quarter, reflecting strong execution momentum during the quarter. Pertinent to also note that share of fourth quarter revenue was 37% in FY26 as against 55% in FY25. Graph margin for Q4 FY26 improved significantly to 73% as compared to 49% in Q4 of last year. EBITDA for the quarter stood at 193 cores with EBITDA margins at 56%. While PAC for the year, PAC for the quarter, stood at 139 cores with a PAC margin of 40 percentage. From a working capital perspective, we continue to seek improvement in operational efficiency during FY26. Our cash conversion cycle improved meaningfully to 365 days in FY26 from 428 days in FY25. Reflecting strong execution, better inventory management, and continuous focus on disciplined working ability control. As of March 2026, our order book stood at approximately 926 crores. While including negotiated and expected orders, the order book pipeline remained strong at around 2,052 crores. Our order book continues to remain diversified across radar systems, avionics, electronic warfare, communication systems, and strategic electronic applications. The company continues to maintain a strong balance sheet and remains a debt-free company. We believe our healthy liquidity position and discipline the capital allocation strategy. It provides us with the flexibility to continue investing in R&D, infrastructure, advanced technologies, and manufacturing capabilities. Going forward, we remain optimistic about the long-term opportunities in the domestic and international defense sector and continue to focus on execution, operational efficiency, technology development, and profitable growth. With that, we would like to open the floor for question and answers. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask the 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. We will take our first question from the line of Dipen Vakeel from Philippe Capital, India. Please go ahead.

Hi, thank you for this opportunity and congratulations on a great EBITDA margin and surpassing the revenue and guidance for the year. My first question is on the lines of your margin profile itself. So you have told us that you have told, so this quarter you had some great EBITDA margins. So, can you help us understand as to which product mix has led to such strong EBITDA margins, and out of those order books, what kind of EBITDA margins can we expect going ahead?

You see, we have a differentiated product line. The margins for Q2 was much lesser because I earlier explained in that call also that there is a strategic program where we've taken a contract at a lower cost and the margins, but it's, we built us a capability to build a complete system and also the program management office, which is necessary, other than also demonstrating mechanical capabilities, which is not, we talked with an electronic company. So these are the takeaways from this contract, and also our commitment that these will also lead to future contracts. So we take some contracts with lower margin consciously to ensure that we build a capability, product capability, and also allows us future expansion. So that is the reason the last year quarter, quarter-to-quarter differences were there. And though there's an increase in revenue in quarter two, and, you know, overall revenue has been, as per guidance, slightly better than guidance. And the rest of the margin which you talk about is that is normally where our complete product development is done in-house. Where all the IP is created in-house, we don't import anything and integrate. So this is in nature of exactly what we normally do. And since there is no bought out in those last quarter revenue, and it is all our own full systems, which has been developed by us, the margin profile has been different. So you need to look at not, you know, you can't give a direct guidance on, you know, contract to contract, how it will go in terms of EBITDA or margin, This is the overall business cycle. There are very many products, and we take some products at different kinds of pricing based on our, one, ability to absorb it, two, to see how the future of business is going to look at, and the business prospects, we take a call on that and take a decision where to make an offer, how to quote it. This is what we've done, and now that the opportunities are much larger and becoming much, much larger, we need to build a capability upgrade in a company to address larger opportunities going forward. I think I've answered your question. If you have anything else, please ask again. Yes, sir.

Sir, that was very much clear. So, just another thing on that, so you mentioned that you have currently 2,000 crore of order books, of which roughly 1,000 crore is already in the books and 1,000 crore expected. So, any timeline on that as to when we can expect finalization of those 1,000 crore when negotiations are completed?

I think in the next one to two months' time, we should expect the contracts to happen.

Okay.

Unless, of course, there are some, you know, these are all government customers, so I can't predict for them. But our feeling is that it should happen in the next one to two months' time.

And, Warren, about that, we are expecting orders to the tune of 15 to 20 billion for FI27?

Yes. See, what has happened is we have developed products earlier, and those products, during the course of this year, will have repeat orders. So that has been projected at 1,900 crores. So these are all single tender orders just expected during the course of the year. The timing is not exactly visible. That is why I said during the course of the next 12 months, we should get an additional order book, which is based on already developed products and delivered and accepted by customers. And repeat requirements are already quoted for in some situations, and inquiries have also come in for other requirements. Wherever we're talking about 1,900 costs, we're already quoted for those requirements. The only thing is some of the negotiations may have to happen, And the timelines are not exactly in our control, but it should happen during the course of the year. Got it.

So, last question on the productions. So, in this order and flow, what will be the proportion of the production order and flow, which are expected to be like a short cycle order? So, any indication on those that out of those 2,000 crore or maybe 1,000 crore, how much will be the quantum of the production order?

I can't give you exact ratio now. What is already delivered, I said, is we get a repeat order of 1,900 crores. That will all be production orders because already we have done the development. On the existing 2,000 crores, some are service orders, some are already developed orders, and some are new development, which is going to take place. And so I don't have the exact mix and percentages. But whatever we have taken up, even for development initiatives we are taking up, we are looking at it only with the perspective of future requirements are there for such products and programs. So whatever we develop, we develop as building blocks, and they have a future requirement in other applications as well. So that is how the development cycle is actually managed by the company. So I can't give you the exact number, but there will be larger size production contracts for the overall business we expect as we go along.

Got it, sir. I have a few more questions, but I'll get back on the queue. Thank you so much.

Thank you. Next question is from the line of Rashika from Goldman Sachs. Please go ahead.

Hi. Good morning, everyone. Thank you for the opportunity. Sir, I have two questions. You indicated that you're working with global OEMs. I wanted to understand what's the traction around that and if we have anything apart from UK. Secondly, when can we expect to get the order for a Brahmo seeker? Certain media articles indicate that the production is hampered. Will it have a material impact on our revenue growth in FY27?

Okay, first question is global OEMs. A number of them have started visiting us and quite impressed with whatever we've achieved in terms of capabilities and products. So similar products are required in Europe. So the enquiries have started coming from Europe for building such products, and they quite like our prices in delivery term. I think in the next two, three months' time or four months' time, we should start getting some contracts from these global OEMs. Which will lead into some development initiatives initially, but then it will lead to year-and-year, quarter-to-quarter delivery for their actual military programs for which they are addressing their opportunities. So this is going to be not a one-off system, it will be multiple systems based on what we have already developed and modified to meet their OEM requirements. So this is one part of the story on exports is concerned. We also want to now expand our own export team, build a team to address exports because we believe that there is going to be increased, you know, look at India with our capabilities and delivery models, which Europe and the U.S. and other countries would be looking at very seriously. So I think this is a growing business, and since we have done a lot of product development in-house, which matches the requirement immediately, I think there will be a lot of traction once we put the marketing team to address the opportunities. So, we are going not just UK, but other than UK, also in Europe, inquiries have started coming in, other people who are visiting us, also from US, from civil aviation and things like that, people have started visiting us, and quite taken interest in our capabilities, and inquiries have started coming in. Regarding BrahMos seekers, the first variant of the development seeker order is under execution. Once that execution is completed, I think in the next four, five months' time, The production orders which start coming in, they've indicated the production orders, and they want it to be delivered before next year, middle, is what the customer is saying. So I don't think there is going to be any distress on delivery timelines, especially as Brumos is concerned, with our kind of seekers and systems. Whatever orders was given in three, four months back in Brumos, we've already delivered, and by March, we delivered it. So our timelines for delivery is quite fast. And with respect to other competitors which were there in this line of business, so I don't think we'll have a problem in terms of revenue. And anyway, this is part of the expected order of 1,900 crores is what we projected, not in the orders on hand situation. So I don't think there'll be a revenue upset based on Bromos, even if there's a delay. But I don't think there's going to be a delay.

Understood, sir. That's helpful. Thank you.

Thank you. Next question is from the line of Hardi Kramar from IFL Capital. Please go ahead.

Thanks for the opportunity and congratulations, team, on a wonderful result. Sir, my first question would be with regards to the current order book. So, we have some thousand odd crores of order book and we expect another thousand odd crores of negotiated orders to flow through in the coming month or two. Just wanted to understand, you know, our order book mix, if I look at today, the share of services in that is roughly 350 odd crores. The order book is at the end of 4Q. When you talk about the negotiated orders, could you give us an indication as to what part of this would pertain to services and what part would pertain to products?

I think about on this thousand crores, which I have said, maybe 100 crores will be on services, but there is some product delivery. You got it.

So that would mean that in the next two months, we'll be sitting on a product order book of about, we should be sitting, again, not understanding that, you know, the orders can be delayed, but our expectation is that we should be sitting at a product order book of about 1500 odd crores. Would that be correct? 575 that you already have and some 900 odd crores that you'll be getting.

Yeah, around that or even slightly higher.

You got it, sir. So now I want to understand, you know, since a large part of our product portfolio and because of our faster execution timeline, the execution has largely been short cycle. What do you expect the execution cycle to be on this 300 crores of orders that you'll be sitting at in a month or two?

That is not whether we can execute or not. It depends on the program requirements. Some of the program requirements are spread over three years delivery. Some is delivered to in a few months. So, that varies from the contract to contract, and that will be mostly based on customer requirements, not on our ability to deliver.

No, sir, I get that. What I'm trying to understand is that based on the delivery schedules that you have, what is your expectation in terms of order execution cycle, if you can break it down, and what do you expect? Again, we're not holding you to this, but what do you expect?

We have projected about 20-20% revenue growth. We won't think we'll have a problem on those things. So that will happen. And if the other 1,900 crores things come in early, some part of it can be executed this year also. And that will also bump up our revenue model. So since, you know, we don't have the exact timing, we have only projected this 22% growth. But once the contracts are run, we already developed these products, our receiving timelines and the matching customer requirements are even earlier. So depending on that, the delivery model will happen. So at the present moment, we don't want to wage any kind of saying that we will do this this way because we know we are confident doing this. But this is a base point. I think as the contracts start coming in, larger contracts. Our projections may vary from quarter to quarter.

You got it, sir. That's very helpful. Sir, another point was... I'm sorry to interrupt, Hardik.

You may please see Jonathan for more questions.

I think I will start. All right. No worries.

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions, from all the participants in the call, kindly limit your questions to two participants. Should you have a follow-up question, please rejoin the field. We will take our next question from the line of Rhea Bhatia from PNB. Please go ahead.

Yeah, so I just wanted to understand about the order inflow for the year. You said around 1,500 to 2,000 crores. This is apart from the 1,100 crores around the negotiated, right?

Yes.

Okay, so then would it be correct to assume that you'll be ending the year with around 3,500 to 4,000 crores affordable?

No, we would also be executing contracts which is coming in, no?

Okay, so what should be the closing order book for the year?

I think it's a bit early for that. We will come towards the year end before we give you the numbers. It's a bit early because there are a lot of programs we're working on. Some of the large contracts and strategic programs, also the order may start coming in. As the order starts coming in, the order book size will grow, plus the export revenue, which is going to happen.

So there are so many areas of product development,

and, you know, we're making offers to customers. So if it was successful, you know, we will be able to have a very healthy order book going ahead. That is why in the opening remarks, I mentioned that this is the first time I've given an all-rounder view on the market and where we are in terms of investment models and product models. and how the business is supposed to scale in the coming, you know, in the short and medium term. I've given you overall perspective on existing, you know, repeat business from existing deliveries, new things which can happen, and then other areas where we are focusing on product development also, plus the export and the repeat business as expected. So we've also said that some of this, what we predicted, it happens. You'll have a healthy product, you know, order book. Which will also give us the clarity of quarter-to-quarter growth over the next two to three years' time, while we still strive for building larger businesses going ahead. So I think we have a fairly rounded view, I've given, on the opening remarks. But to exactly tell you, end of March, what will it be? I think towards Q2, Q3, depending on how we get the orders going ahead, that will give you better answers.

Understood. Thank you so much. Thank you. Next question is from the line of Akshay. Sir, make your investment. Please go ahead.

Hi, sir. My one question is already answered and congratulations on the great set of numbers. And, sir, my second question is how much cash flow from a week are we expecting to generate in FY27 and going forward for the next two to three years? Because for the last two years, our cash flow generation from operations has been very weak.

I didn't understand the question. What is it? Guest? What is it? What did you ask?

Sir, I am asking about the cash flow from operations. Since last two years, our cash flow from operations has been very weak. So, over the next two to three years, cash flow from operations.

Okay, okay, okay. Yes.

So, over the next two to three years, how much conversion from VBIT are we expecting?

I don't know, Vinkit, you want to answer this question?

The cash conversion cycle today is at 365 days. We are seeing improvements year on year. We expect it to, you know, probably settle down at 320 to 340 days going forward. But year on year, we cannot, at the beginning of the year, it's very early to, you know, calculate all that and come out with an answer for this. But we are definitely focusing on reducing the working cycle, and it is also showing some improvements year on year. So going by that, we expect it to settle down at 320 to 340 days going forward. But probably during the middle of the year, we can take a review on this, and some color can be given, but this is too early now.

Okay, sir. Thank you.

Thank you. Next question is from Delaina. Poojan Shah from Molecule Ventures. Please go ahead.

Hello. I'm audible. Hello.

You are audible.

Yes, yes. So, first question pertains to, so, in the last, our conference, we have said that we might issue the, you know, 100 crore in one to two months timeline, while that has been delayed. But while I was also reading some of the tender participation and web, I have seen that there is also an order of 1,700 crores for pages NK1A. Is it possible? What is that? Is it the same order? What is that order? 1007 crores, what is that? 1007 crores order value for Tejas MTA1A.

Tejas, okay.

So, is it the same order which I am been considering or you have been considering in the last call or it is just a different order altogether?

These are not the Tejas one. Tejas one is part of some inquiries have come. We have quoted for whatever our products are going, Avionics is going into Tejas. So this, hopefully the order should come during the course of this year. It normally goes to a very large negotiation cycle with HAL. So we have to wait and watch when the order is placed. But we have not projected anything on last year for Tejas. We had orders on hand, which we executed, but the new order projections is this year only. We're talking about other than that orders on hand situation, already delivered products, which repeat orders may happen. For this, we've already quoted, and stages also we've already quoted. So we'll have to see when the contract comes. It'll be only this year.

Okay, sir, I just want to, because the tender was closed on, I think, 13th or 25th of March, I don't remember the date, and in 65 days of timeline, it needs to be concluded on their side, so there is no update on the portal or something like that.

I don't know which you're talking about. I'm not aware of what you're talking about. So, I'm only going to comment on it.

And to give you more clarity, actually, the orders negotiated of 1,900 crore, which was shown in the previous conference call, is not a single case. It's multiple cases. Some of them, we've got the contract, and that number now stands at 1,090 crore. I mean, we've got some more contracts negotiated in between last conference call and now. So, put together 1090 crore as on date as we speak. So, including that, our order book today stands at 2000 crore plus, 2062 crore to be precise.

Right, right.

You have to wait for the tedious order to happen, and we will announce it to the market as and when the order happens.

I just want to understand...

I'm sorry to interrupt. Poojan, you may please rejoin the queue for more questions. Thank you. We will take our next question from the line of Varvid Koyal from Seren. Alpha, please go ahead.

Hi, I'm Arun. Yes, you are. Hi, good morning, and congrats for good numbers. Sir, in your opening remarks, you mentioned about some delays of certain programs. Can I know what kind of programs are these? And secondly, if these delays and these programs are getting the effort to have a 27, then fundamentally, your growth should be more than 25%. And why are we speaking about 20-25% now? So that's my first question.

No, I never marked any, what are the 13 programs? I don't know what you're talking. Which 13 programs?

No, 13. I'm saying you mentioned about some programs getting delayed in execution in Q4 that will be deferred in next year. That's what you said, right?

No, no, no. I never mentioned, I never said anything like that. I never said anything like that. I've only compared quarter 2 to quarter 4 performances. And then there are expected orders from whatever we deliver in quarter two. But I never talked about any delays. I only talked about orders which is expected, let's say, another 1,900 for repeat contracts. I'm not able to give you timelines on those orders because these are all government contracts. But I expect this to happen over the course of this year is what I said. I never talked about delays on any other thing.

Okay, so if I look at the execution in Q4, it is falling behind Q4 last year, right? So we were having the order book in our hand, right? So what is stopping us in executing those contracts? Like what is the reason behind the floor execution?

This is not a poor execution. Actually, execution has been very good. It's not poor. It is a good execution. And execution has to be in line with customer requirements. I may have an order on hand, but customer doesn't want delivery today. There may be three conditions to our delivery. So based on customer requests, we deliver. And based on the contract. So execution has not been poor. Actually, execution is very good. We deliver things in two months and three months, which is very, very good. And our board is very happy with the execution and how we manage the execution. So, there is no delay from our side. It's a question of the agencies, government agencies, getting together to approval, these kind of things, normally goes through a process, and that process delay is not addressed by us. We can't address those process delays, but we've never had an exhibition delay from our office. Understood, understood.

And secondly, I'm sorry to interrupt. I'm sorry to interrupt, Mr. Goyal. You may please rejoin with you. Thank you. We will take our next question from the line of Shri Narayan Mishra from Baroda BNP Paribas. Please go ahead.

Thanks for the opportunity. Sir, my first question is on the largest order that we have received in Q4, IMD, Radar, Development and Service Order. What would be the execution cycle for that order?

The requirement is between over 18 months. We are trying to see how fast we can deliver it.

Okay, and sir, since I can see in the order backlog, services mix has increased significantly, so would that mean trade receivable days would improve, or how should we see that?

No, no, you are talking about services?

Yeah, in the order book, services mix has increased significantly.

No, trade receivables will not be increased, because you won't bill for services unless the services are carried out. The only product delivery happens, we build only product development. The services part of the contract will be built as and when the services happen and the delivery of the services happen. So there are two independent parts to the order. So we will not build the overall amount and wait for services to happen over the next four or five years. That is not the way revenue recognition is done. It's not done that way.

Service orders represents our AMC revenue. AMC is actually for multiple years. It's not a single year AMC.

So, when the process for revenue recognition, this will not add to, you know, any receivables increase in all those things.

So, from the date of billing of a service order, how many days it takes to collect the amount?

Depends on the customer and the processes involved. See, what we do is, after the service, it again depends on the contract, when the billing can start. At the end of the service contract, one year over, the annual billing can be after the end of the year. Or if it is quarterly billing, so it depends on the contract, varies from contract to contract. And the payment cycle terms vary from customer to customer.

But in general, if you want to generalize, is it better than production order?

I can't generalize because your unique government agencies are there. IMD is the first case which is taken up now. So until we get some money transferred from IMD, we won't be able to generalize.

Okay, okay. Thank you for answering my question. Thank you.

Thank you. Next question is from the line of Amit Sharma. An individual investor, please go ahead.

Hello. Yeah, hi. Thank you for the opportunity, sir, and congratulations on a great set of numbers. I have two specific questions, one related to our current order book. So we have about 38% of our current order book coming from services, which has roughly an elongated executive cycle. So does that, and even a negotiated order book of 1,090 crore, even within that also we have a sizable amount coming from services. So, does that put a pressure for us in terms of our growth size, meaning would our growth really say 25% growth, would that be a pressure point for us for the coming year as well as for next year at 28?

Okay, this question has already been asked and answered. 1090 crores have given approximately about 100 crores to be services. The rest is product delivery, so it will not affect our top-line revenue growth as what we projected. We projected 22-25%. We believe we should be able to do this. On top of why we said we should do this is also that there are a number of repeat contracts we're expecting during the course of the year. If it happens early, then we can deliver those products earlier. So, that also will bring in additional revenue or, you know, either part of the revenue projections or over and above the revenue projections, we can do that. So, it depends on how the order inflow happens during the course of this year.

So, basically, what we are saying is that the state execution order books like we had in the current year is what we are largely depending on to achieve the ballpark number that we are guiding for the current year.

Is that something we work with? Yeah, we believe it will be substantially higher than the guidance number. It's what we expect because I think a lot of long-term initiatives the company has taken, and I think those initiatives one by one will start practifying into contracts. Once it starts getting in contracts, our order book situation should grow substantively in the coming years is what we expect. And we have, you know, developed products over a period of time to ensure that we can scale the company very quickly. into multiple thousands of companies rather than scale it 20% year in year. That is not what we are looking at in the management cycle here. We are actually looking at some very high scalability in the coming years. And the strategy and product development mix is working towards how to build a scalability and sustainable scalability is what we are working on. Got it, got it.

I'm sorry to interrupt, Amit. You may please rejoin the queue. Thank you. Next question is from the line of Sahil Kariya from White Point Investment. Please go ahead.

Thank you for your opportunity.

I can't hear you at all.

I can't hear you at all. Can you come to nearer the phone and call?

I'm sorry to interrupt, Sahil. Can you use your handset mode, please?

Yeah, am I audible now?

Yes, please.

Yeah, so apart from Rambo's missiles, these are the missile programs are delivering CIFRs and IR products too, and for which products, could you be the L1 vendor?

I'm still very confused with your question. You're not very audible.

Apart from BrahMos missiles, which are the missile programs are we delivering products to? And for which products are we air-run vendors?

As with the BrahMos product, there is one other program for the air defense. We have done a seeker that is under delivery mode now. But there are no other programs on the missile area. We are working on seekers. But as a concept, We want to take up initiatives to build other kinds of seekers, electro-optic, etc. seekers on our own, and where we are positioning ourselves with an industry partner to see that we can get the revenue model as we go along. But those are all development initiatives internal to office. But as of now, we don't have anything else because we work on whatever DRDO allows us to do. We develop the product as per the requirement. So, till then, it's been now very controlled by DRDO, the missile program itself. As and when the missile program becomes opened up, other agencies start building, large corporations start coming into the business, and maybe we should be able to do a large part of the missile and have an ecosystem which will develop the system. That's yet to happen.

Okay. I'm very sorry, Sahil.

Please respond to more questions. Thank you. A reminder to all the participants, kindly restrict yourselves to one question only. In case of follow-up question, please rejoin the queue. We will take our next question from Janesh Karya from Union EMC. Please go ahead.

Yeah, good morning, sir. Am I audible?

Yeah.

Yeah, thanks for the opportunity. So, my question is on the AMCA program. Any update on our consortium's position for the AMCA program? And irrespective of the outcome of which consortium is winning, what would be our opportunity within the AMCA program?

The Anpua promo RFP is expected any time now. So that is the first status. Second is on the AMCA we have... The glass cockpit is developed by us. The machine systems is developed by us for the LCA Mark II, which is going to be taken to UMCA. We are hoping that as we go along, more such on the sensors and RWR and radar and things like, as and when, we are able to develop products, and it is acceptable to customers. All such programs will follow. At the present moment, we have only the cockpit solutions and machine management system is being done by us.

Thank you. Next question is from the line of Santosh, from iThought BMS. Please go ahead.

Hi, am I audible? Yes. Okay, so I just want to know, like, what are the negotiated orders of 1,000 crores? You did say that if the delivery skills are okay, we might deliver some of those contracts this year. Would that growth be over and above the current of 20-25% you're waiting for?

No, I never mentioned, I think you misheard me, misunderstood the whole thing which I've answered. I never said the 1,000 crores. We've only talked about orders on hand, expected orders, that is, negotiated with 1,000 crores. I never said that this will be delivered earlier and things like that. I've talked about other 1,900 crores. If it were to come, single-gender business is going to happen, through the course of the year, comes in early, then I can execute them early. That is what I talked about, not on the contracts on hand. I didn't understand the second part of the question.

What are the questions? No, I'm just asking that if the delivery schedule is allowing you to get the revenue today, would that be on and above the guarantee you're suggesting for? Because is there any capacity constraint is my question as well.

No, we are building large capacities. For expert contracts already capacity we are built. Plus we are building something about nine floors of factory space. To build an additional capacity to see that, you know, as the program sizes increase and the volume of contracts increase to scale to a multi-thousand crore company, we already, you know, started investing on capital and infrastructure expansion because it takes one to two years' time. So we're already in the process of doing it. For seekers and other things, we already put the capacity building blocks. And infrastructure is necessary to ramp up production. Already we've done that. I don't think we will have a problem in execution. As long as it happens, we are aware of when this will happen. Of course, the timelines are not very predictable. So, we have to take a cautious view of not overspending an infrastructure, and the contacts don't happen. I don't want to sit on, you know, CAPEX infrastructure there. So, this has to be judiciously implemented, but we are aware that scaling is going to happen substantively, and we are taking an aggressive position on terms of CAPEX infrastructure to address the scaling requirements as we go along.

Okay, sir. Understood. Thank you.

Thank you. Next question is from the line of Dipen Vakeel from Philip, capital India. Please go ahead.

Hi, sir. Thank you for the follow-up opportunity. So, I wanted to understand on your product development and also on the Virupaksha component for the Virupaksha radar that you have supplied to Indian Airpods as well. So, any update on that as to what is the progress, how was the response, and if there's any concrete order which we can expect from there? And you also mentioned about the new areas of development around anti-drone systems, drone detection. So can you tell us more about the timeline as to when these products will start getting commissioned or are they in that approval stages and we can expect some revenue from them?

Okay, first is Viru Kaksha is not our product. Viru Kaksha is a DRDO project name for the Sukhoi-30 radars. This is not ours. We call it by different name. So we haven't delivered Viru Kaksha or any equivalent to Air Force as yet. So that is the wrong information you have received. So we have our own versions of it, and we believe that that will also be taken up by Air Force in the coming years. But because of the uncertainty and timelines, which I can't predict, we have not given revenue expectations out of those things in our opening remarks. Similarly, when you talk about anti-drone, yes, products are getting done. We will be participating in demonstrating the products to Army and Air Force and whatever. So that will happen. But again, we don't have clear timelines when what will happen. We have started quoting in some locations. And if they are successful, the courts, we will make it the order. But these are all things which is, again, a court and competition basis. So timelines and revenue model is not, what do you say, very clear now. So, but then we need to expand the product portfolio and be aware of what is happening and the need of the customer is trying to address the need overall. So, we're developing a number of products, and these are all repurposed products. Already we've done something. The incremental effort of three, four months, I can position the products. So, it makes sense to do that. And our product will be reliable and meeting the specifications. So, we believe that there will be some revenue models going ahead, but I can't predict anything at the present moment. For new product development, we don't do revenue predictions unless clarity is there for the market and it is an acceptance stage and later requirements started, inquiries started coming in. I can't give you predictions. I'm only talking about the overall business environment and product development to help the investors to understand how scalability we are going to ensure that we can be a larger business going ahead in the next two, three years' time. That is how the overall business perspective and product development has been explained. Not to the exact revenue model, because I can't give you numbers like that.

I'm also looking for the timeline on the new product development as to when we can expect the new products to start coming into your product portfolio, for sure.

That will all happen as it's happening already, but that depends on the product. The anti-done is a smaller system, so it can happen quickly, but the other, you know, the other EW suite for self-jammer is a two-year, two-and-a-half-year initiative, which we've taken up, and that is, in the next one year, it will come to conclusions. It depends on the product and the complexity of the project and program and the acceptance models. The air trials have to be done. It takes longer time. It takes one after two years' time to do air trials. So why I give you the overall perspective is that we are not only looking at contracts now. We're also looking at, in the shorter term, some kind of product initiatives and repeat contracts. Strictly immediate term, we've already invested and continue to invest in new products and orders, which is actually needed by the country, which is not positioned. No Indian company is positioning. The only foreigners are positioning products there. So in competition with products, our products should be far more economically priced, And support systems are going to be far superior as long as the product meets world-class specifications. So based on that, we believe there are low-hanging fruits, but timelines are not predictable. So we will not predict timelines and revenue models out of that.

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

Thank you. Next question is from the line of Aditya from Avitus Institutional Equities. Please go ahead.

So, hi, sir. Congratulations on your set of numbers. My doubt is regarding our competitive peer, which is Astra Microwave. I have been following the different companies' assets. In this case, Astra Microwave is also, like, in line with providing more on complete system, like, similar to us. They have been transitioning in that aspect. So, how are we trying to question ourselves in case of the competitive friends when compared to one such peer, like let's say Asparamu, in case of systems and orders which we are going to see?

I would like to comment on specific competition and open line. So I will reference the answer to this question.

So, that's all for questions from my side, sir. If possible, could you just explain more on our technological side in case of our product development, which is part of our R&D and this, like details more on the technical part of it?

Yeah, we have a strong in-house technology development team. We have nearly about 1,200 engineers working with us. So, as what we've done all through the years, we develop products and write off the revenue expenses, except in a few cases where we did a QAP fund for product development, which is capitalized. We don't do capitalizing. We continue to do enormous amount of product development as part of our yearly requirements, and then have the product ready for markets, which we perceive or we believe is going to open up to us. So, we take such kind of initiatives and upfront invest products, and we're investing now products on radars, so full. Earlier, only hardware was being done by us because DRDO software is done by them. Now, the market's opened up. We decided that we build a software and full radars. We've done a few radars by us, and some of them have been exported. Now, we're building the drone detection radars. We want to get into the airborne radar programs, so we're doing the airborne development programs for airborne radars, including software and complete radars. We are doing the ISS. We want to do the machine systems. We want to do the EW. Already it's flying, so we want to enhance the scale of EW, the communicating intelligence. We want to do world-class systems, the increasing specifications to see that it is a top-of-line world-class specifications are met. So like that, in every product area, we're trying to improve the product capability. And address it to the world markets and see that we are in line with the world systems so that we can offer best solutions for India and not, you know, second to none is what we're trying to do. So our area of focus is, if you take avionics, you know, radio, machine systems, communications, radars, EW, IFF, a lot of other things which goes into UAV platforms. See, and parts of the radar as for RIDU requirements, complete radar solutions wherever we can do that, export of these parts of systems to international OEMs. All of this is what we're looking at. We have fairly deep technological capabilities in all of them, and we have a very strong group of people who have been with this company for 20, 25 years who will drive this technology and also the middle management on engineering for all 15, 20 years in the company. So, it's a very homegrown kind of an organization where there are no levels and product talks, and all of us listen. So, the idea is to develop products, which is world class, with the market opening up, and we want to build a large-scale company going ahead.

Thank you, sir.

Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to the management for closing comments.

Thank you all for joining in on this conference call, earnings call for Q4 and the year 2526. I've taken time to give you an overall perspective of how our business is going and where we are trying to develop products. The intent is to see that we scale up multiple times in the coming years. The market opportunities are very, very large, considering that India has been importing all of our defense systems, and these are core competency in IT-driven products. We have been completely dependent on foreign OEMs who don't share the details and do a manufacturing only in India. As against that, we want to build our own capability and food products to see that we are completely self-reliant and with world-class products. Some of our initiatives have started giving some... The results and some orders are going to come on the EW, which we're competing with Germany. We got some contact. We're going to get some contact. The end of the year, we opened and negotiated and completed. So things like that. Similarly, on the EW jamming, we've done all this, including the software, the mechanical systems, the schooling systems, the electronics, which is world class. So we believe that also should give us some substantive revenue opportunities going ahead. The third area is what we've already developed, and we've taken some additional risks in addressing these opportunities because we believe it will help us build scale, repeat orders, as well as build program management capabilities in the company. If we take them and successfully execute it with the contracts, customers are quite happy. So we believe that there will be some additional requirements that will come up, which will build scale into the company. Fourthly is we are looking at exports. Till now, that is not their focus area. But with the geopolitical environment, the export then now takes precedence because a lot of European companies are looking at how quickly can we deliver products for their military programs. So we're trying to address it. Similarly, in U.S. programs, and we need to now have a team to go and address from Japan to Korea to Europe to U.K., to other countries, including U.S., so that we are trying to put a team together to see how to address this. We are also looking at how do we scale capabilities. In terms of, you know, electro-optics, so what is it we need to do to build in electro-optics, not just, you know, electronics company, and domain. So domain and electronics, mechanical, all we integrated together to build our own systems. So I'll give you an overall idea. We're very bullish, like I said. On the growth opportunities of what India offers today, and since we've been importing everything, it now, you know, it is up to us for grabs. Obviously, there are time-lapse, and it's a government agency, so we need to be aware of that and not do over-investment, and then have competition foreigners who come on the back route and put them in infrastructure, then you lose the business. So we are cautious of the development and what we are holding money in. But overall, I think we are taking the right approach and direction. And the board and the technology board and the company are quite clear that we're going the right track. So we will continue to build like this and, you know, scale the company quite quickly. This is what we expect. We're very bullish on data finance growth going ahead. Thank you very much for your listening impatiently for this. If you have any further questions, please pass it on to GoIndia advisors, and we'll get them answered to you through that. Thank you all. Thanks for listening.

Thank you very much. On behalf of Go India Advisors, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.