Demand For Radars To Drones Shows Defence Bet Paying Off, Says Axiscades

The focus on the defence sector is driven by the Make-In-India initiative and the Russia-Ukraine war, which emphasise the need for resilient electronic communication and warfare capabilities, Krishnamurthi said.

Axiscades Tech is seeing demand for manufacturing of radars, sonars, telemetry devices, and drones, he said.

With the requisite approvals for their prototype designs, the company will be transitioning to a phase of increased production over the next three to four years and is expecting higher profit margin. This progress reflects the fruition of the investments in R&D and prototype development over the past decade, according to Krishnamurthi.

Defence currently represents 30% of Axiscades' business and it aims to double the revenue within three financial years. As production ramps up, the firm expects improved profitability with expanding Ebitda margin.

In the previous fiscal, production accounted for Rs 30 crore out of Rs 200 crore defence revenue, offering a high margin. This year, the estimate is Rs 100 crore revenue from production and Rs 200 crore over the following year, resulting in top-line and bottom-line growth, Krishnamurthi said.

The average margin stands at 15% at the end of fiscal 2023, with defence margin ranging between 19% and 22%, based on the relative mix of the business including R&D, design and manufacturing, he said.