Management maintains guidance of ~15% revenue growth and Ebitda margin of ~22.3% for FY26. The company expects to double its revenue by FY28 and triple by FY30 as the execution of QRSAM, Uttam AESA, Virupaksha AESA picks up.
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Astra Microwave Ltd.'s H1 revenue growth was subdued at 8% YoY; however, the execution is skewed towards H2, and thus, we still expect c.15% revenue growth for FY26 (orderbook in place).
This apart, management has showed strong confidence of quadrable revenue in five-six years driven by many aerospace side projects taking off.
Further, its JV ARC is also doing well as it has already won orders worth Rs 2.9 billion recently for advanced communication system; Astra Microwave guides for additional Rs 5-6 billion order inflow, taking the total order inflow to Rs 8-9 billion in FY26.
Management sounded confident of achieving its guidance:
Revenue growth of 15-20% annually for the next few years,
order inflow of Rs 13-14 billion in FY26 and
PBT margin of 18% in FY26.
We have factored in 20% revenue CAGR over FY25-28E with PBT CAGR of 24%.
We maintain Buy with a revised target price of Rs 1,200 (based on 40x FY28E EPS).
Key risks
Delay in ordering by DPSUs or execution of projects.
Delay in development of solutions.
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