Astra Microwave Products Limited: strong FY26 margins, cash flow swing, and a sharper strategic reset

Astra Microwave Products Limited closed FY26 with steady growth and a meaningful improvement in cash generation, supported by a favourable revenue mix and better working-capital movement. On a consolidated basis, FY26 revenue was INR1,163 crore, EBITDA was INR334 crore and PAT was INR193 crore. The consolidated EBITDA margin improved to 28.7% in FY26 from 25.6% in FY25, while PAT margin improved to 16.6% from 14.6%.

The fourth quarter was particularly strong. Consolidated Q4 FY26 revenue was INR488 crore with EBITDA of INR162 crore and PAT of INR106 crore. EBITDA margin in Q4 FY26 expanded to 33.3% and PAT margin to 21.7%, reflecting a favourable delivery mix and higher value-add execution.

The order book stayed robust, with exports and services showing weight

Astra reported a standalone order book of INR2,141 crore as of March 31, 2026. The company highlighted a category split of 54% for defence and public sector, 11% for space, 2% for meteorological and 33% for exports. The order book split by order type (as on March 31, 2026) showed production as the largest piece at INR1,243 crore (58.1%), followed by development at INR369 crore (17.2%), AMC and service at INR350 crore (16.3%), and export at INR179 crore (8.4%).

Management also referenced strong order activity in Q4 FY26, including major radar production orders from BEL and ARC, and space orders from ISRO.

FY26 performance snapshot

One of the most important changes in FY26 was the cash flow swing. Consolidated net cash from operating activities was INR387 crore in FY26 versus negative INR90 crore in FY25, as per the company’s cash flow statement.

Revenue mix: defence still leads, but Q4 showed space and exports momentum

Astra’s quarterly revenue split disclosed in the investor presentation is useful to understand mix volatility. For Q4 FY26, defence was 58.4% of revenue, space was 19.5%, exports including deemed exports were 16.9%, meteorological was 4.9% and others were 0.3%.

Management explained that the space uptick was linked to deliveries of complex subsystems, including for a defence satellite programme. The company also discussed a shift in export economics. Management contrasted the older low-margin build-to-print or offset exports with the newer model where value addition is higher, including exports linked to Astra Rafael Comsys.

Guidance: 15% to 20% growth in FY27, with large programmes as optionality

The company reaffirmed FY27 standalone revenue growth guidance of 15% to 20%. In the concall, management also discussed a FY27 sales execution plan of INR1,300 crore to INR1,400 crore.

Beyond FY27, management discussed the possibility of tripling revenue over a three to four year horizon, potentially by FY30 to FY31, depending on contract finalisation and programme timelines. The call referenced multiple large defence programmes that can drive scale, including radar and electronic warfare upgrades. However, management was clear that timing can shift because procurement and qualification cycles are government-driven.

JV and subsidiaries: ARC’s scale-up and a demerger proposal

Astra Rafael Comsys (ARC), the joint venture with Rafael, remained a key narrative driver. Management stated ARC ended FY26 with an order book of about INR625 crore and expects top line of over INR600 crore in FY27, while noting profitability in FY26 was impacted by forex-related provisions.

A major strategic development was the Board’s in-principle approval to demerge the Space, Meteorology and Hydrology business undertakings into a separate entity. The company positioned this as a move to improve management focus and operational efficiency, enable tailored capital allocation, and potentially unlock value for shareholders. Management said a detailed scheme is expected after Board approval, subject to reports and opinions from consultants.

Takeaways

Astra Microwave Products’ FY26 update points to a company benefitting from a favourable mix, improving profitability, and a large order book that supports near-term execution. The sharp improvement in operating cash flow is a notable positive, although working capital intensity remains a structural feature of the business.

The near-term lens is anchored by FY27 guidance of 15% to 20% growth and continued ramp-up of ARC. The medium-term narrative rests on timely conversion and execution of large radar and electronic warfare programmes, and the company’s ability to sustain margins while scaling. The proposed demerger of Space, Meteorology and Hydrology undertakings is a key corporate development to track, as it could reshape how investors assess Astra’s portfolio and capital allocation discipline.