Thank you, Huda. Good afternoon, everyone, and welcome to Data Patterns (India) Limited call to discuss Q1 FY27 earnings call.

We have the senior management of the company on the call: Mr. S.

Rangarajan, Chairman and Managing Director, and Mr. Venkata Subramanian, 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 floors for the Q&A. Thank you, and over to you, sir.

Thank you, Prayashi. Good afternoon, ladies and gentlemen, and a warm welcome to all of you to the Q1 FY27 earnings call of Data Patterns (India) Limited.

We sincerely appreciate your continued trust, support, and participation. I hope all of you have had the opportunity to review our earnings presentation, which have been uploaded on the stock exchanges and on our company website.

Before Venkat takes through the financial performance, I'd like to share a few key business updates and our outlook for the coming quarters. The quarter marks another important step in our long-term growth strategy, as our strategic investments over the past several years are beginning to translate into tangible business opportunities and stronger market positioning.

We continue to witness healthy customer engagement across multiple defense programs with increasing opportunities for larger value and complete contracts. We secured orders across avionics, radars, electronic warfare, and automatic test equipment programs from various customers, including Ministry of Defence, DRDO, and BrahMos, reflecting the growing confidence in our technological capabilities and execution track record.

We also continue to pursue several large opportunities that are currently at various stages of discussion and evaluation. A key milestone for us has been the accidental transition of several products from the development stage to complete system solutions.

This significantly expands our addressable market and enables us to participate in larger and higher-value programs. With differentiated capabilities, we are trying to convert them into single-vendor opportunities.

We're also leveraging our existing technology platforms and reusable building blocks to develop new products faster and more cost-effectively, improving both scalability and speed to market. Our order book stands at ₹2,654 crore, including orders negotiated, providing a healthy revenue visibility over the coming years.

Our international order book currently stands at ₹39 crore, and we continue to actively engage with customers across global markets to expand our export footprint. We also remain confident of securing around ₹2,000 crore of fresh order inflows during FY27, over and above the orders already received and negotiated.

Policy environment also remains highly favorable. The government's continued focus on higher indigenous content in defense procurement is creating significant opportunities across the ecosystem, including the armed forces, defense PSUs, and private sector companies.

With a strong in-house design capabilities and proven execution track record, we believe Data Patterns is well-positioned to benefit from this structural opportunity. Another encouraging development during the quarter was the initial traction in our drone and counter-drone business, where we have started receiving orders.

We believe that this business will become an important growth driver as demand for indigenous unmanned and counter-UAS solutions continue to increase. Coming to the quarter, our revenue trajectory continues to remain on track.

As indicated earlier, we continue to invest in strengthening our engineering talent and future capabilities, resulting in higher employee cost base is expected to remain elevated over the coming quarters. In addition, changes in the product mix also impacted margins during the quarter.

There are conscious investments that strengthen our long-term competitive positioning and prepare us for larger opportunities ahead. Looking ahead, the outlook of the Indian defense sector remains highly encouraging, supported by a robust order pipeline, expanding product portfolio, increasing export opportunities, and favorable policy content, remain confident of achieving our full-year growth guidance of 20-25% revenue growth while maintaining EBITDA margins in the 35-40% range.

We remain committed to investing in the technology innovation and indigenous capability development while creating sustainable long-term value to all of our customers. With that, now I hand over the floor to our CFO, Venkat, to take through the financial performance in greater detail.

Thank you, sir. Good afternoon, ladies and gentlemen, and thank you all for joining us today.

Let me take you through the financial highlights for the quarter of first quarter of financial year 2027. Revenue from operations for Q1 FY27 stood at ₹116 crore, registering a healthy 17% year-on-year growth, driven by continued execution across our diversified defense programs.

Gross profit increased to 16% year-on-year to ₹91.5 crore, while gross margins remained strong at 78.9%, reflecting the high-value nature of our product mix. EBITDA stood at ₹31.4 crore with an EBITDA margin of 27%.

Margin during the quarter were impacted by high employee cost associated with capability expansion and changes in the product mix. Profit after tax stood at ₹22.1 crore with a PAT margin of 19%, reflecting a temporary impact due to uneven quarterly revenue.

The company continues to maintain a strong balance sheet, remaining net debt-free, with cash, bank balances, and investments of ₹530 crore as on 30th June 2026, providing ample flexibility to support future growth initiatives. Our order book stands at ₹920 crore at as on 30th June 2026.

With orders received in July and orders negotiated, the order book currently stands at ₹2,654 crore. We remain focused on disciplined execution, operational efficiency, and prudent capital allocation as we continue to invest in technology and support the company's long-term growth.

With that, I would like to open the floor for question and answers. Thank you.

Thanks for the opportunity. Sir, first question would be with regards to other expenses.

While our gross margins have largely not changed much on a YoY basis, despite only 17% sort of growth in revenue, our other expenses have risen by 64%. Is there anything that is peculiar about other expenses in this quarter?

See,

increase in other expenses is due to some additional repairs and maintenance cost which is incurred because the facility is now going through some revamping. We had to spend some additional expenditure on repairs and maintenance.

Also, close to ₹2 crore we have additionally provided for against the long-pending receivables, as per our policy. These two have contributed increase in the other expenditure.

Otherwise, it's in line with our budgets.

Got it, sir. Sir, on revenue, in the press release, sir alluded to the fact that there were some temporary delays in customer approvals, and we are expecting normalization in the coming quarters.

If you could provide some information there, sir. Is there any quantum of revenue that was basically slipped from recognition of this current quarter because of this issue?

We can't be specific because it involves customers, and I can't talk about it open channel. We had these issues in the past also, where products are ready, and inspection team doesn't come because their own requirement to deliver is probably got delayed.

Automatically, they don't come to inspect. These are all aberrations which will continue to be there as long as we're dependent on that with an order book model to revenue model being very near.

These issues will come into picture. We try to manage it by executing other orders, seeing that our projections are maintained.

Sometimes it is not feasible because we are not a quarter-to-quarter business. We're a yearly business, and all the projects are long term.

It is not a production month-to-month, day-on-day production business. Obviously, that's an impact on our revenue quarter-to-quarter.

Having said that, the important thing is to how to alleviate this quarter-to-quarter performance deviation is to see that the order book substantially goes up for at least 3 years of our revenue projection. Then this will be in a position to say what quarter-wise we should do and how do we deliver this.

Data Patterns is aiming towards getting a sizable order book in the coming year or so, 2 years, seeing that we cross the ₹3,000-odd crore revenue projections. Then we should be in a better position to handle this kind of problems.

I think you need to bear with me for some time till the order book starts coming the way we want. We've invested substantially in product development, continue to invest substantially in differentiated products where we stand alone in some of the markets, and these are very desperately needed by our MOD.

As and when that happens, the order book would substantially increase, and we believe that our revenue projections will be met quarter-to-quarter as we go along. It's going to take a bit of time.

Till now, you need to be patient on a yearly model of growth, what you have been doing.

Got it, sir. That's really helpful.

Sir, one last question before I fall back in the queue. Sir, orders negotiated but not yet a part of our order book now stand at about ₹17-odd billion, ₹1,726-odd crore.

Sir, if you could just help us with the timeline, as in how should we expect this to turn into order book? Should this convert into order book in the, say, for example, the next 6 to 9 months?

What is the average conversion timeline to conversion to order book for these orders that have been negotiated?

Okay. This question was asked during our AGM in the morning, and I somehow slipped answering this question.

Anyway, we will write to them, the share old shareholder and address this.

See, this order book normally should not take this long a time to get converted into contracts. In this particular situation, because of a long a big program, and the program position delays on finalizing the program before the order can get placed, they went to certain approval stages, and it took a lot more time.

It's taken an additional 6 months than what it is. The whole program has been stretched by more than 1.5 years.

Because of which, some of the contracts have been slipped out of the programs, though the negotiation is completed, order couldn't happen. What I'm told now is they've taken additional extension for another 2 months from us, we expect in another 2 months those contracts should happen.

Also, some of the orders we expected, we the the order got postponed. We didn't negotiate those orders.

We did some negotiation, but got a lot of protracted negotiations. That's also coming to an end now.

That also should happen. That's why these orders will get converted in next few months, is 9.

Actually, it has to come in a week, 2 weeks' time, but maybe come in a few months to give a safer side. The order book is there, and we have already negotiated these contracts.

These are all long term, larger contracts, and that is how the the decisions and delays are happening. On top of that, we've also told as part of my opening remarks, other than the contracts which you are seeing now with our book, we're also pursuing some really large single-vendor contracts to the extent of another ₹2,000 crore, which we expect to happen in the course of this financial year.

I think the order is slowly started going the way we want. In the coming years, it will grow substantially, is what we believe.

Got it, sir. That's really helpful.

I have more questions. I'll fall back.

Thank you, sir.

Good afternoon, sir. Thank you for the opportunity.

Sir, could you please share an update on the testing of jammer pods for Su-30 along with the revenue contribution you're expecting from this in the medium term? That's my question.

Thank you, sir.

Okay. As that product is going on well in the development stage.

Customers had a view of the product, exhibited the product, and they have said they're quite happy with the progress which is made on the pod. We are going through the qualification exercises to maybe offer it to the aircraft and fly.

I believe that that should happen before December, and we should have the first trials to start by then. It will be a few months of flight trials.

Once you satisfy the requirement on specifications, I think the commercial position should start after that. I don't want to out guess.

I have a number in mind, of course. We know what we're working on.

Otherwise, we don't move the invested money. I think it's not appropriate to talk about a future order that is not yet has come as an inquiry, tender, and to say how much business we're expecting out of it.

There are two kinds of contracts we're expecting. These are all several thousand crores, and at the present moment, we are uniquely positioned in these contracts.

Exact value will not like to disclose at the present moment. Towards closing the contract happens, we expect maybe in the next 2 years' time these contracts to start happen.

That's the right time to announce. This, yeah, we're working on really large opportunities.

We took money from the QIP wanting to fund such development programs, where we are confident about our IP creation and our whole building blocks. It's a multi-engineering approach: building the pod, building the cooling system, building the electronics, building the algorithms, to see that it's a complex system, close to flight trials.

We're taking it as a challenge to do this because we need to scale our business substantially in the coming years. That is why we are doing such deep kind of product development, which will be larger horizon to maturity, but we're on track.

Thank you, sir. Sir, secondly, could you please share more color on why did we have lower margins this quarter, and how are you expecting this to pan out in the coming quarters for FY27?

Actually, we didn't have lower margin. I don't know You look at the gross margin, the gross margin are higher than what it's probably done last quarter last year last last year first quarter.

What happens to the overheads are fairly high. Because whether we we deliver products or not this year this quarter, we continue to spend on legal expenses, which is probably one of the highest in our industry.

We spend on that. Then Venkat explained to you that other expenses write-off is taking place and other other costs, depreciation and all.

Basically, uneven revenue in quarters, madam. You have to look at it only annual because the revenue is not distributed evenly through all the quarters.

Expenditures remaining almost the same quarter-wise, the contribution from gross margin, that is distributed with a higher cost, the margins are seen lower. Otherwise, we are confident of achieving the full-year targeted margins.

Yeah. Our budget fits towards the gaining the year-end targets.

Quarter to quarter, it will vary depending on what is the level of turnover we achieve.

It's very much in line with our internal targets.

If the revenue is one quarter is 1/4, then the margins will be the same. Since the revenue is not equally distributed across the quarters, you're finding this so-called EBITDA margins coming down.

That's not true because gross margin remains very healthy. That's the actual fact.

Sure, sir. Thank you.

Hi. Thank you for this opportunity, and congratulations on a decent execution.

Sir, my first question is on order inflows, sir. Sir, one thing is that we have negotiated contracts worth 70 billion, 17 billion.

Of that, I believe that last quarter, we had mentioned that HAL has an order of more than, say, 10 billion. Sir, whenever it gets converted into order book, what would be the timeline of execution of that order, considering that it's one large order from a single client?

Okay. See, this varies with the contract.

Varies with the customer delivery. For example, you take HAL, they deliver the aircraft over a period of years.

Then those orders are given one lot. Execution takes over a period of time.

That is one. If it is a project order, the value is high, project execution may be about 18 months, 24 months, then the project has to be executed within those time frames.

If it's a small subsystems orders, this is from DRDO, then the deliveries are faster. The project contracts take a longer delivery time based on the actual application and demand of what has to be delivered, developed, and delivered, and integrated, and accepted.

This actually varies from a few months to maybe a few years. Unless we work with every product order, I can't answer this question correctly.

Of late, I find HAL also wants a pretty decent delivery over 2 to 3 years' time. We actually expected far higher delivery delays.

They are saying okay. This is being negotiated.

Whatever we talked now on the orders negotiated do not include HAL contracts. We are under discussion on all these things.

Negotiations are on place. I found that a lot of people are asking questions to me directly.

We are in GeM portal release that we are L1 in one large contract. I didn't comment on it because we are undergoing negotiations.

It's a single-vendor contract. Negotiations are initiated.

We are going through the negotiations. As and when it happens, we are obliged to announce it in the stock exchanges and on our website.

Got it. Got it, sir.

That's

encouraging to hear that it's beyond the 17 billion negotiated contracts already. That helps.

Sir, my second question is on the lines of counter-drone business and export business that you mentioned that are gaining traction. What would be the product portfolio likely that is gaining traction?

Are we supplying the complete platforms, or we are looking at more from a subsystem play for counter-drone business as well? See,

we are not in the platform business as of now. We are in the sensor business.

We have two or three areas where we can do counter-drone. One is active detection, that is in radars.

We build the full radar. We have required quantities for counter-drone requirements and operators that we fully develop.

We have some unique products there which meets MOD requirements. It's not yet addressed in India, and so it is imported now.

We believe we have a good order pipeline in hand. We've already started getting contracts.

As we go along, we expect a far more healthy order book on the active detection. Second is the passive detection for counter-drones, that is on ELINT and COMINT, decode what is happening in the drone, and then locate where the drone is, direction of the drone, and then this is another area.

We've already done a host of products in ELINT. Modernizing this part of things to suit this market size, and that also is almost getting ready.

We expect contracts to happen there also. The third area is not only just detecting, but also to a countermeasure as to jamming, or jamming is to be done.

We have products which are built for the jamming also, to see that the signals are jammed on COMINT, they will jam. Also, it will go for the group for smokers on these products.

We believe they will cover the entire specification. Some of the applications also vary, because they're kamikaze drones, and they want to even target the drones into the end projectile.

There also the direction of the radar and test subsystems are required by them. Various kinds of requirements are coming up from the market, and MOD is decided to place an order multiple vendors.

We experiment 10-20 systems in each. More number of them have started approaching us for suitable sensors for all these applications.

We're working with them, and I think the next 3 to 6 months' time, this contract should start getting fortified and should grow this. This is on the counter-drone area.

On the exports, we continue to build for the last so many years, signal processor for radars, airborne radars for UK company. Now we've started getting the first orders we got last year for an antenna, redesign of an antenna for an obsolescence management for a fighter aircraft system.

We will be delivering it in the next 6 to 8 months' time. There's also a lot of interest from the same organization, which are multinational, very large corporate in Europe in other areas.

We've given proposals for many of these systems. They're very keen to see that we use these systems, because the time frame which we're talking about is far, far lower than what they expect their own organization to build.

Especially with Europe having manpower shortages in this area and sudden requirements of contracts and scaling up from, we find a lot of opportunities are getting created for us with our competency in building products, delivery timelines which is very short. I expect that business also in the next few months' time, a multi-million dollar business we should start getting.

Third area, we're also looking at the civil aviation kind of obsolescence management and upgrades, which again very large OEMs in the US. They expect that those contracts also start coming in in exports.

See, our normal business has been DRDO, MOD, public sector. That's what the business has been here.

We want to now look into new markets, which is in export business, where we do product development, our IP, fit into their requirements, and the market sizes are becoming much bigger. There, I can also look at a business which is into annuity business, not just a project-oriented.

Very keen, putting on export group to address the market, and I think in the next 2 to 3 years' time, scaling substantially into export business should also start. Yeah.

Got it, sir.

Yeah.

Sir, just one last question if I can squeeze in. Sir, can you comment on your acquisition on SP Advanced?

What is it targeted at, namely as to what kind of product, and how it can increase our market opportunity? Are we targeting it mainly for MiG-29 upgrades and Su-30 upgrades, or there is a much wider application for this acquisition?

See, technically very sound company. It's a small company, technically very sound, and very innovative organization.

We believe that we're in sensor radar business, we also have to have requirement of composite for radomes, both for ELINT as well as for radar requirements. It's one area where we're already giving contracts to him, and we're getting the products built for them, which is working very well for us.

He's also supplying to Bharat Electronics and other organizations the advanced composites for aircraft systems in MiG-29, etc. The important is to try to see whether we can enhance his capabilities, fold it into larger requirements which we have in India and abroad.

Both India and abroad, along with our sensors and parts of the systems, there's a requirement for composites. If you can combine these together, I can give a whole system rather than part piece of system.

Customers are much more happier because we take a full contract development of the system. We thought this is the right approach to build an ecosystem which can feed each other's capabilities and grow it overall some game will grow up.

That is the reason to be done, and we need to do a lot more work to bring this company up where it is today to a much larger scope of business. We have a lot of ideas for that kind of capabilities which the promoter of the company has.

We've had some discussions with them. We want to spend more time, ideate with them, invest in the company to see that infrastructure is created, and to get long-term development plans for these contracts, where we have sustainable business model for its growth.

At the present moment, it's a bit too early, because yesterday only we finalized the deal, and we need to spend more time and work out a strategy. Yes, it's a small company, but we believe it's an important acquisition to both that company as well as us, where we can give a product offering as a whole, and also look at some export business which will directly go to him as well as to us, seeing that we increase our business.

Got it, sir. Thank you so much for answering my question, and all the very best for FY27.

Hi, sir. Good afternoon.

Just a couple of questions. One is if you can broadly highlight larger platforms which you are focusing on to participate in, not as a platform, but more as a system/subsystem developer, and that too not from a near-term perspective, but over the next 3 to 5 years, where all can we participate and contribute?

That's number one. Number two, just wanted to hear your take on Himshakti project.

Where is that? We were going to receive a few orders.

Have we received those, or what's the project status there?

Okay. On the larger platforms, there's a naval program and bigger HALE programs is taking up.

Larger platforms come from tenders. As a sensors developer, most of these are all now on the existing vendors, are all of imported origin.

We believe we should make a mark in providing our products in these areas in terms of radar warning receivers, COMINT, communication intelligence, electronic intelligence, the IFF, radio relays. There's so many other areas: satcom, downlinks, data links.

There's so many areas which we can work on as a full system and give indigenous contribution to these kind of big programs of larger platforms. We're actively engaging with two, three companies to offer them to these, go through flight trials with them, seeing that repeat requirements can come in numbers as you go along.

Because the market is changing from manned to unmanned, there's a lot more opportunities to come. The same thing also will be applicable outside India.

On a combined system, if we can do this in India, along with the platform, we are sure it will get exported. These are exciting new opportunities where we already have existing competencies and products which are already quite proven.

I need to tweak it for their particular platform in mind, and seeing that we go through trials with them. This is one area where we're looking at.

We're also looking at smaller drones for various other surveillance applications, where we can outfit the systems. We're continuously getting calls from various UAV manufacturers to see how can we give sensors for their birds.

We are exploring all those opportunities where competency exists and a mutual benefit in terms of giving our product to end customer at a very fast turnaround time can be addressed. These are areas which we can do in terms of platforms.

We're also now looking at how to build these kind of products for naval platforms. Here we've started discussion now on giving very modern systems for these larger platforms in navy, and also some of the upgrades which India is going through for this aircraft upgrades which goes through.

Same sensors which we're talking about in terms of EW and radars can get provided in that. Again, we're looking at addressing those markets.

First question is asked on the SPJ is one such requirement, with electronic warfare suite getting developed for the Su-30 platform, which is 270-odd aircraft. Similar aircraft are there, multiple systems are happening.

Also, DRDO is also taking up a number of airborne radar, Uttam, and a whole lot of other projects which MMA and things like that, where we feel that our sensors can go fit into the programs as we want and world-class specifications. On a product level, we are assessing markets and seeing that we can build these products.

There are a number of such applications. We take a lot of time for me to go through it, but I'm giving you a flavor of lead drone business.

There's a lot more areas where we can actually look into in the applications of the products on those kind of end applications. As regards Himshakti, I think we delivered in the original products.

Now the requirement has got SMS is another program, what are we talking about. They've been in discussion with us.

I can't tell you whether the RFP and back-to-back can be through something. Still I don't have full data with me.

Yes, interactions are on for some of the products which is proved in Dharashakti. They are also talking to us to see whether this can be fitted for the next-generation platforms.

In the meantime, we're also upgrading our technologies in this, adding more value in terms of not just the hardware and software, but also they are of contents, also the antennas. We have a large antenna division now.

We design it to optimally solution the end product, not depending upon foreign companies, and defined for the applications. It will be a much better product performance also with them.

We are not keeping quiet the last 2 years. We've done a lot of development on all these areas.

The development is still on, with QIP investment programs in communication intelligence, RWR, and things like that. We are not waiting for the contract.

We're going ahead, building the product to be ready in the next 2 months' time. We expect that with the technology edge which we have should be able to convince the customer and the end user that these are the appropriate products for their requirements.

I can't comment exactly on when the contract will happen.

Understood. Understood.

Fair. Sir, lastly, on the hawk radars which you've developed, have we found any application out there or any way to monetize what we've built?

Could that find a way into Su-30 upgrades or some of those larger platforms? Any discussions with the customer, any indications where we can monetize such a fantastic product, anything on that front?

See, we've done the hardware for both MiG as well as Su-30. Then, we need the software for them.

Original concept was we get the software from somebody. It didn't work out, but the hardware we went ahead and developed is world-class.

We are in discussion with DRDO to see whether we can collaborate with them for putting this together. We are also in discussion with the Russian counterparts on the OEMs.

Both are going ahead. I can't very clearly say which will happen when faster.

We expect in the next 2 to 3 months' time should get some breakthrough in this, where the software can be ported, and then we go to flight trials after that. We're also investing in next-generation radars, which will be what is production-oriented line.

Also, we will develop in the next 6 months' time. As the first contracts come in, we'll be ready with the more advanced systems of that nature will also be available, give a technology edge to the end customer.

We are waiting for this to happen. In the meantime, we are also developing our own software.

Now we just started developing our own software on airborne platforms, using UAVs as a platform for our trials, which is what some of our customers are wanting us to do. We are also going on the third thing that we develop the systems.

As a complete system we develop, then we are not dependent on any other organization or technology to drive the business orientation. That also is initiated.

It will take a few more months before we get a correct path as to where it's going to go. Yes, we are determined to see that these products work and fly.

We're putting efforts to see that the more modernizing system, learning from mistakes, correcting it, building software capabilities, and whole lot of other stuff, to see that this project is successful. It'll take some more time before I can give you more data on when the possible success can happen.

Understood.

Understood. Fair.

Thank you so much, sir. Thank you.

Hi, sir. Thanks for the opportunity.

Sir, do we have an update regarding BrahMos? We have been supplying fire control systems for the same and also have been working on development orders for seekers.

Any color on timelines for receiving commercial orders for these seekers?

We expect this to happen this year, this financial year. The approvals and qualification take time.

Products are ready. As and when the qualification is completed, do a flight trial, I think the contract should happen.

Or even one of qualification is over itself, contract should happen. We believe that it should happen this year.

We expected earlier, but there's some delays. Anyway, we can expect this to happen before end of this year.

It's one of the projections which we have for this year revenue. On terms order intake.

Not to revenue, but order intake for this year.

Further, do you have any comments on development of new subsystems for BrahMos? If we do that, what incremental wallet share are we targeting to gain here?

Lastly, again, we've seen BrahMos has seen increased interest from a few countries, and we have also from other suppliers to the program about them ramping up capacities for those respective components. How are we placed to meet the growing demand for BrahMos?

See,

what happens is once you develop a product, various vendors have developed towards the BrahMos missile, DRDO and BrahMos together. Those are getting contracts, those who have done that are getting contracts for the things which we have done.

I don't see so easy to change the supplier, redevelop, and qualify the systems. I don't expect that much to happen.

The volume is coming with more orders from them. Back-to-back orders will come to us, is what we expect, and we'll deliver this.

That is the one part. Second is also they're talking about the next-generation BrahMos.

If the next-generation BrahMos happens, and they down-select us for some of the programs in this, we will be very happy to see that our volume business to them also can go up. We have the capability, but whether it will happen or not is something we cannot guess.

Capability exists to do a whole lot of stuff, because the last 20 years, phenomenal capability building has happened in Data Patterns across domains. We can do very fast turnaround time depending on the market needs.

That's all I can say today.

Got it, sir. Thank you so much.

All the very best.

Hi, sir. Good afternoon.

Thank you for the opportunity. Am I audible?

Yeah.

My first question is on this existing order book for ₹2,600 crore. Can you give us some color of how much of these are production and what level would be development orders?

I know I'm not classified it accordingly to give you a direct answer. Venkat, do we have a classification of this?

Sorry, sir, can you please come again? Could not hear you.

No, no, I've not classified it. I don't have a ready answer, but Venkat is looking into the orders and giving you the data.

Come to the second question if you have.

Sure. Secondly, on this order prospect that you have of 20 to 40 billion, these would include the potential HAL order as well as the BrahMos seekers order?

Is that understanding right?

BrahMos seeker also is a potential order. Until the contract comes to us, everything is potential only.

Yes,

that's Okay. These are included in the prospects, right?

Pardon?

These are included in our prospects for 20 billion of single-vendor orders that we are targeting?

Yes. Yes, please.

The HAL order would also be included in the same prospect?

I believe so. Some portion of it, I believe so.

₹20 billion.

Yeah. We had part of the additional order.

Additional ₹20 billion, it is included,

not as part of the negotiated business. Understood.

Understood. Also, sir, can you highlight some of the prospects that are currently under development aside of BrahMos wherein you are expecting conversion to production orders over the next 2 to 3 years?

To not mention the quantum, but just broadly on the product lines.

See, I don't know how long you've been following Data Patterns, but we spent a substantial amount of money in developing space, air defense long-range radars. Those are very, very well-appreciated by the customer.

Systems have been delivered, and they believe they are of strategic importance to India. There is a drive from the customer base, multiple such contracts would have to be executed across India to see that we are protected from the space reentry vehicles and things like that.

Back to back, I expect in the next 1.5 to 2 years' time substantial business running into a few thousands of crores for such contracts, where we have a competency established in terms of electromechanical systems, cooling systems, electronics, software, everything put together the complete radar. We're the first company to do that in India under development with us, and it is well received by the customer.

We believe some more orders from them. This is a very exciting time for us.

Already, there are some inquiries in this area of modified systems, which is already been delivered for applications which is for air defense. There is a number of contracts we're expecting out of that, which are not shown in this 2 billion or whatever 20 billion we talk about.

We expect that probably because still no inquiries have not come, we're not included all of those things. As and when it happens, and we get a hold of this when the contract comes, we will announce it.

Yes, we think we are moving in a larger business proposition of addressable market of more than 40-50 billion, 40-billion, I think. Billion is ₹4,000 crore.

No, it should be around 40,000, ₹50,000 crore. We're trying to address markets with our products.

We're looking at a very large-size product mix and a lot of complex systems in this, but that's where the direction of the company is being driven today. We'll need a very large growth as we go along if we're successful.

Of course, these are all in future. Yes, the proven products we're talking about in this are all being worked well, we expect repeat contracts on these areas as we go ahead.

We are expecting substantive growth in the coming years based on already executed contracts, new products and development. I don't want to be specific on what products are being developed on an open forum now, but we are very clear which markets you want to address and we want to address it.

Then, we are developing products for those markets. Even what we delivered has got a substantive potential for several thousand crores of additional business going ahead.

Got it, sir. If I may squeeze in a small question lastly.

What is the CapEx plan that you have for the next 2 years?

That is another thing which we are going to spend money. We're spending money on product development.

We're also spending a whole lot of CapEx, maybe ₹200 crore plus we will be spending more than that in the next 2 years' time for infrastructure abilities we want to build. An 8-storied building with car parks and things like that.

Also, some clean rooms, some integration facility. In the large contracts, they're asking systems and the volume will come into picture, where we need to set up production assembly lines and test equipment, in-process testing, to see that the reliability is maintained, and delivery schedules are also met, meeting customer requirements are done.

A lot of investments will also happen. We started the investments, actually.

We started the foundation work already in the building. Some of the infrastructure equipment also placed order.

A lot of these pieces, units are coming here. The large investments will happen in the next 1 to 2 years' time as we go along, because we will do this in parallel to order expected, so that execution processes is kept in mind to do this.

We can't do it sequentially. We are doing it in parallel.

Yes, substantiality will come. It will all more than ₹200 crore plus Close to ₹200 crore minimum, it will be, based on the requirements.

Today, we're also investing a lot of server money, because of AI. A lot of investments also happening in computer servers, for IT infrastructure to support AI-driven initiatives, which the company is taking up very seriously.

These are investments which will be made in the coming year or 2 years.

Got it, sir. Thank you so much.

Yeah.

Hello, sir. Am I audible?

Yes.

Sir, I firstly just wanted to understand, there's a question put to you, I think, 1 year or 2 years back around space. At that point of time, I think we had basically deferred it.

What is your stand now in that area of thing? Because I believe that we are seeing sort of some traction in that sector.

Do we stand the same?

We discussed this in the board meeting yesterday also. We discussed this.

We have capability of doing defense satellites, but we need an order book to do that or an indication of a contract for us is investing. We have the money.

We have the competency to do this. We've taken money to actually invest in building the satellites.

We are actually doing a basic design work which is doing. Whether it'll be commercialized and go ahead is depending on our interaction with the government.

Find out whether the funding will happen and the actual need. There is a need, but that has been postponed, because mostly Department of Space addresses this need.

Now what happens is a lot of startups in the space. They have all doing everything free of cost.

Because they're getting valuations and getting free of cost, they're trying to develop these kind of space systems and satellites. Now we wouldn't want to take that model.

We'd like to have an understanding. We don't mind investing now, but we need to look at the revenue model as you go along, the bottom-line business as you go along.

Capability exists, but I'm still unsure about what investments will happen from government. Then based on which, we'll take a decision.

We've given ourselves another 3 to 4 months' time to see that we take a decision how to proceed with this. That's where we are now.

As and when some clarity happens, I will definitely inform investors.

Thank you, sir. My second question will be around the acquisition.

I do understand that this is sort of a backward integration for our business. We won't bring any value to this subsidiary.

This business of ours, right? We are not capable of material science.

How do we plan on grow that particular ceramic company from here? What is our stance on it?

How do you plan to do anything about it on the future? See,

contribution to a company doesn't have to come only on technology. Contribution to the company comes from revenue growth, bottom-line business, proven process and validation, reach to customer, okay, addressing new markets.

Many things come when a small company is there isolated. It's very, very difficult for them to address and even access the market space.

They mostly quote on lowest quote basis and make a lot of loss. This is what really happens to most of the SMEs.

You need to graduate from that to see that we have access to markets, and we have access to investments, we don't get into cash flow issues, and also to see that the revenue businesses for new markets is also brought in by a larger company. I believe we will do that for this company, bring in the larger market audiences, have them exposed to bigger requirements and larger requirements which can scale, can happen substantially, bring in investments necessary, see that we can deliver on the promises made to end customers, whole lot of other thing on our process, what are we developed over many years.

That's the strength of our process. Sees that mistakes don't happen, the quality consciousness and QA procedures and inspection systems, what we can do, to see that our process is also then passed on.

See commonalizing, homogenizing the whole system. This is where we think we can add value, and we will bring substantial business as you go along to this company.

This is our belief. I believe we will do this.

It'll take some bit of time, but I think we will do that.

Thank you, sir. Just one last suggestion, if you can upgrade

no. I had no questions.

I was done. Thank you.

Hi, sir. Thank you for taking my question.

Sir, I just wanted to understand one thing. That was the development of the Hawk-based radar that you're talking about.

As I understand, Astra Microwave is a DCP partner for it. I just wanted to understand what are we trying to do there.

The Hawk radar is ours. There's no partner.

No, no,

Hawk radar is yours, sir. What I'm trying to say is basically that Astra is already a DcPP partner.

Astra is not a DcPP partner here. Astra is a DcPP partner for LCA variant, not on the Su-30 variant as I understand.

Maybe they're one part of the antenna being supplied by them, and BEL also a supplier. They're developing the products.

They have an independent development team from DRDO. We are doing it in parallel.

That's where it is. It depends on whether we can qualify our product and get a contract, or we don't qualify, and they qualify, then they get a contract.

Both the possibilities.

Okay. Just to understand from my understanding, sir.

Basically, the DRDO is going to be making the software bit, and Astra is going to be making the hardware, right? The integration will be done by DRDO.

Just to understand, if you are making the Hawk radar, the software will ultimately have to come from DRDO if I'm not mistaken, right?

I told you, this is one option. Other option, we can develop the software and also put it.

Software can come from third-party countries also, other country also. It's a full product offering.

Air Force, per se, do not mind where it comes from. They're willing to give us the aircraft platform to fly and qualify.

Of course, processes will have to go through. Requirements have to come up.

It is not specific that only this will happen, only that will happen. Market is open.

It's up to us to prove that we have the products capable and prove to customers that this makes better sense. Then we will get a contract.

That is what we're trying to aim, not really hold loggersheads with anybody else. It's a parallel path which you design and develop.

See, here we build the full system. Every other part is also developed, not just the antenna: the signal processor, the cooling systems, the vapor compression machine, everything else.

The entire, including the radome, we can develop with the other part of company we have. A whole lot of stuff we can develop as an end system to take the load off to the end customer and maintain that for the next 20 years.

There are advantages in one or the other. We're trying to see whether we can give an offer and advantage even to DRDO to see whether we can work together to build a faster product meeting end specifications.

Can we do that? This is based on technology, we're trying to push it.

Let us see where it goes.

Got it. Thank you so much, sir.

Thank you so much. Really helpful.

Thank you for the opportunity, sir. My question is on the naval program, sir.

There has been a lot of CapEx happening on the naval side. Do we have any plans to increase our share coming from the naval programs?

Correct me if I'm wrong, but right now our exposure overall, if you look across the three services, I think in terms of naval exposure, we are comparatively lower. You can correct me if I'm wrong there.

What is our plan going forward in terms of development and production, participating in production programs for the naval side, given that we have substantial market, a lot of CapEx happening on the platforms in navy?

We hope to work with DRDO on naval platforms. For example, we are actually doing parts of the system, it doesn't directly go to navy from us.

We work with DRDO for their sonar subsystems, the check communication links to sonobuoys. All this is being done, and that has been procured by Bharat Electronics and others.

We're also building some other products on the airborne systems for the naval applications. Also we're doing.

We've also got our couple first orders from DRDO for the radar for naval applications. Two radars for naval commissioning also go into some numbers as you go along.

Similarly, our radars which hardware has been designed and software done by DRDO, requirement for 30-odd systems for Coast Guard. We hope that we can win that contract.

On sensors like this, we're doing it. Now we're also trying to do an outreach to that on coming on electronic intelligence, to do directly with the navy.

Yes, going to start dialogue with them and fit with the systems in naval platform. We're going ahead what we can do.

We're also talking to navy in terms of their MiG-29 and other aircraft where the jammer and things like that they require, we're trying to outfit and mainly upgrade the existing jammers, meeting the application. Probably we're in flight trials very soon.

Once it is done, some contracts will happen with them, as well as for Air Force, because similar requirements are there also. We're doing a whole lot of stuff on sensors like this.

We are going to see whether more opportunities can be created. We have a naval officer in Delhi working with us, and his task is to find out in our areas of expertise, can we look at an opportunity.

We've identified a few, and we need to pursue on them.

Right, sir. Lastly, on the order inflow prospects of 20 billion that you have mentioned for the current year, sir, what is the risk of those orders getting delayed, because those orders would be linked to some of the large projects that we are expecting, part of subsystems that we intend to provide.

What are the risks that you see that those 20 billion worth of orders within them, that they could get delayed to FY28 or beyond, given that we already have some kind of delays in the negotiated part?

Tenders are already on. We've already addressed tenders and given the tenders.

That is why I've given myself 9 months to see the contracts can happen. We believe much before that these contracts should happen.

What we've not projected to you in pipeline is the tenders is not happened. We expect a substantial, much larger business.

Tenders not happened based on already-delivered products, tenders have not happened. That is why we not projected it.

The pipeline, we're looking at addressable market, that's why we say more than ₹40,000 crore addressable market we're looking at, and where products equivalent address those markets. As and when things come nearer to tendering stage or clarity on order happens, we'll be able to announce to market.

Thank you, sir. Thank you for answering my questions.

Hi. Sir, thanks for the opportunity.

Sir, just wanted to understand what would be the market size or the addressable market for our key products if you can just help me understand that. Second question was regarding the counter-drone business that we are looking at.

What could be the total revenue or order wins over next couple of years? That's it from my end.

Okay. We've now started investing in products which have an addressable market value of about ₹30,000 crore, and based on what you've already developed.

Repeat contracts, we're looking at another 10 to odd 1,000 crore. It'll be an addressable market of about ₹40,000 crore.

We have an estimate of when this will happen, but it's a bit premature for me to talk about it now, because it's not come to a stage where I can disclose these things. Addressable market size, the idea is take QIP and start product development to see that it's scaling from a small company to a large company.

We are actually doing that by getting a differentiated products which will be world-class, developed in-house with our money, and take it to trials and convince customers that the products are working well, so that their immediate needs are addressed. That is the idea with which we took money, and we are spending money in this.

We are also spending continuous money on our yearly earnings also. We spend a lot of money on developing building products for immediate next-year kind of customer requirements, where we can be uniquely positioned in this with demonstrations and product outbeating specifications which the customer wants.

We continue doing that. The addressable market size is fairly large, and also we're looking at seeing whether we can address markets outside India, which can be even larger as we go along.

Both the civil aviation as well as the defense markets, we want to look at. We're putting a team together to look at those markets with our competency in engineering can be addressed.

The idea is to build a substantial scale, substantive size as we go ahead from here, and grow the business very fast, is what we're planning to do. What has taken us many years to come here, we expect that in the next 1 or 2, 3 years, we should do multiple times of what we've done last year, is what we are expecting it to happen, and the order book size also is much larger order book size.

Gives us a comfort zone, or we are investing ahead and going to other areas. We have fairly ambitious targets set for ourselves, and I think we are in the right track going there and meeting those targets.

With the AI coming in, we're also investing a lot in AI, to see that product development and even the process within the organizations are modernized and modified, so that technical skill sets are much higher, to see that we get products and programs as well as process to address the large markets and accelerated product development delivery. These are what we are trying to do.

Sizes of markets is very large, and we are trying to build products for that. The second question you asked was counter-drone.

It's in the beginning stages. Drones are being sold.

A number of players in the market. Some of them are talking to us.

Let us build a few systems and deliver it, and look at performance. Then I will be able to answer the question of size of drone business, where we're going.

We're trying to again reuse building blocks what you've done earlier. The cost of development has brought down.

Also, we need to have infrastructure for production. That also we are also buttressing that production and calibration infrastructure to address the market as and when the contract happens.

We believe several hundred crores contract should happen in the course of this year, but that is not projected as revenue projections, not covered under the 20 billion, because these are new things, inquiries have not come. We believe it will come, and we should take the business, what we think.

Anyway, this is future, we can't comment much on it on when exactly it'll happen. We're working towards the product development area and meeting customer requirements in these areas.

Sir, on the ₹40,000 crore addressable market, that would be spread across how many years? That is the market addressable.

I don't want to say this because I have no control over the market when it'll happen. We will not talk about it at the present.

It's suffice to say that we are gearing ourselves up. Products are getting ready.

Some are ready, already delivered. Some are getting ready.

To get a substantive scale, we need addressable markets. It's very easy to say so much of billions of dollars is being spent.

₹2 lakh crore is being spent by India on defense. That means it's not that I can do ₹2 lakh crore with them.

It's not going to be possible. We need to have addressable products where with our technology of products and meets requirements, where gives you a competitive edge, we can convert it.

I'm looking at how to carve out this addressable markets, what products are necessary. We started a bit back.

Not that today I'm starting this. We started a bit back to the new technologies and applications coming in.

We're trying to adapt the competency and knowledge base to address new markets, which we didn't think was possible 2 years back. A lot of things are opening up today.

We're very excited today like a startup to see that we can develop these products for these markets. This time is a conscious mind that it's a business.

We need to end not just make products and satisfied, but also make a bottom-line businesses out of it. Because earlier days in my life, it's only doing the product was more important than the business.

Today, I can't. We're a listed company, we have a board which it's more responsible to do that.

We are mindful of all that, and making very clear plans and decisions to see how to address market and scale this into much, much, much larger revenue and bottom line.

Got it.

I can't quite specify, but the direction is clear. The direction is clear, commitment is clear, we work diligently and honestly.

I don't see why we can't get that contracts which you want.

Right, sir. Got it.

Thank you so much, and all the best, sir. That's it from my end.

Thank you.

Thank you. Thanks to all of you for joining us in this Q1 conference call, investor call.

I'm very happy to answer any of your questions within the restrictions of what I can say. I've been more than open with most of my interviews with all of you, and questions have been answered much more in depth, is what I think.

The only thing I want to leave an impression is that one, we have done substantially different kind of technologies, multidisciplinary technologies for the last 2 to 3 years' time, where we have delivered a air defense radars. It involves enormous enormous mechanical capability design, 100% designed by us.

More than 100 engineers are working on design in the company, though we call ourselves electronic engineering company. We design very accurate positioning, very large platforms which can also hold 40 tons, movement mechanisms for all of them, all designed by us, cooling systems.

Many things are done, it's to make the system engineering capability, instead of outsourcing everything we've done ourselves here. Building a competency model, not just in electronics, but electromechanical systems and applications, and creating infrastructure in terms of people capability, as well as the production and testing infrastructure, to see that we can address future markets as we go along.

All these products we've done has got substantive requirements going ahead in the next 2 to 3 years' time. I believe our customers will see us favorably based on the execution which we've done, and the quality and the reliability of the products delivered.

I believe that they will come back to us for more such requirements, which is what we're hoping for. Also we're building the infrastructure to address, and as and when it happens, go there.

This is one portion. Second is, we've taken a upfront investment in radars, electronic warfare, and communication systems, which are all maturing.

Especially the EW is maturing to a very large stage. We go through qualification and flight tests, we expect large business to happen after that.

As long as we meet customer expectations, we will make our best effort to see that we meet and excel even meet their customer expectations, world-class. These things are also required for other programs outside India.

We'll also address those markets as we go along. Probably another 6 months to 1 year from now, once the product becomes more visible, we should be able to address the market.

This is another area where we will bring substantial growth. Third area now with the AI coming in, we're trying to build a whole lot of products and capabilities, and fine-tune our products with technology, increase their product capabilities in all these areas, and come out with a whole lot of exciting products in the next 1 year, 1.5 years or so, to address new markets, which can be also several thousand crores.

India is changing, the markets are changing worldwide. India is also catching up and changing.

Indian entrepreneurs are also ready to stand up and get counted. Skyroot is one such organization.

We did their own launch, which is now outstanding. We have a lot of companies, we've been trying to work with them OEMs, platform suppliers, to see whether the sensors we can do together.

That's another exciting thing which we are trying to do. We're not waiting for a contract.

We're developing products, taking it to trial, go through flight trials, get it ready, so that by the time some contracts happen, we are there. These are required in numbers as you go along, because much lower cost of fighter aircraft and this is much lower cost and redundancies and things can be made available here.

Market the applications are changing, we want to adapt ourselves to the application with a common scientific basis on what we've done, because all the component availability and new technologies coming in, AI coming in. We want to be abreast of all of them, see that we give world-class products very fast.

Third area we will be focusing on is exports. See that we get new opportunities, which I never looked at very seriously.

Now we're seriously looking at it, because people who have come here from both US and Europe and UK, they've all found our capabilities good. They found our process very good.

They are inclined to engage us in specific programs. I expect that this should start the next few months, and it will expand.

With one success, we should be able to see several successes going ahead. We also put a team to look at markets, to see how we can contribute to faster delivery, faster turnaround, world-class subsystems and products, doing that.

As and when our products become ready, we can also sell it to the Western or the other world, to see that we are competitive, liable, and those products can be done. Idea is to build full systems and take it global as and when possible.

Look at the Indian market, which is very large, address the market, test it here, take it global, see scale can happen. We are very conscious of what we're doing, very determined to do what we're doing, and we're very happy with our shareholders supporting us throughout.

With this kind of a shareholder support, investor support, we believe the sky is the limit. We can do a whole lot of stuff.

There's nothing we can do this much, with so much of money and so much of capability in infrastructure and development capability and process which we've imbibed making mistakes over so many years. If you can trust on them, build further with the youngsters with a lot of enthusiasm, a lot of passion, we should be able to build a larger-scale, larger products and take it global.

This is our dream, and we are living our dream right now. We will blow the business very fast, is what we believe.

Thank you very much for listening to me, listening to us. If you have any further questions, you can please write to Go India, and we will be very pleased to answer all your questions.

Thank you once again.