Concall Transcript is now out. Here are my notes.
In terms of business, the concall was very assuring and many of my concerns have been allayed.
Management Guidance
900 cr revenue for FY2025
~35% EBITDA Margin and ~25% PAT margin
Don’t look at Quarters but the whole year as product mix may change and execution could be lumpy
Have healthy enquiries for both their businesses i.e. Simulators and Anti Drone
Have launched new products. Market size for these products is in 1000s of crores however detailed study required to know the market size. There will be more announcements in this area.
New Orders will come predominately in Q4.
Simulators
15000 cr is the opportunity size
High margin segment with ~40% EBITDA
What drives this segment?? – Huge cost savings, reduces downtime etc.
Simulator induction is at nascent stage + new platforms will require simulators
Anti drone
Demand to be revised upwards from 10,000 cr
EBITDA margin in this segment ~30%
ADS are in IDDM list. Only other player is BEL
QIP
Enabling resolution – not raised funds yet
Looking for inorganic opportunity
Why AMC matter and why simulators are not done by OEMs themselves
50% CAGR is this sustainable?
My take:
In the overall scheme of things the company is still a 15000 cr market cap company. They are growing rapidly and things like growth in simulators and ADS makes sense.
Simulators you need to train – it is an effective way to train and given the nature of modern-day warfare are crucial components.
Key Monitorable from Concall: Order wins by Q4, execution in between and new products
Disl – Invested and biased
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