Astra Microwave Q4 FY26: Margins Expand as Order Book Crosses Rs 2,141 Cr

Astra Microwave Products Limited ended Q4 FY26 with a cleaner profit profile and a larger runway of orders. Standalone revenue rose to Rs 487 crore from Rs 405 crore in Q4 FY25, a 20.4 percent year on year increase. The quarter also showed a sharp improvement in profitability. EBITDA grew to Rs 160 crore from Rs 120 crore, and EBITDA margin expanded to 32.8 percent from 29.6 percent. Profit after tax increased to Rs 105 crore from Rs 75 crore, taking PAT margin to 21.6 percent.

The full year picture was steadier but still constructive. Standalone revenue moved up to Rs 1,156 crore from Rs 1,044 crore in FY25, a 10.7 percent increase. EBITDA improved to Rs 324 crore from Rs 266 crore, lifting the FY26 EBITDA margin to 28.0 percent. PAT rose to Rs 178 crore from Rs 143 crore, with PAT margin at 15.4 percent. Consolidated performance tracked the same direction, with FY26 revenue at Rs 1,163 crore, EBITDA at Rs 334 crore, and PAT at Rs 193 crore.

Q4 FY26 mattered because it showed what the model can look like when execution is strong and the mix supports margins. Gross margin expanded in both the quarter and the full year. Standalone gross profit margin improved to 48.9 percent in Q4 FY26 from 45.5 percent in Q4 FY25, and to 49.1 percent in FY26 from 43.9 percent in FY25. Finance cost also eased in the quarter, with Q4 FY26 finance cost at Rs 14 crore versus Rs 19 crore in Q4 FY25.

What drove the quarter: mix shifts, exports, and a steadier cost base

Astra’s revenue mix can move meaningfully quarter to quarter, and Q4 FY26 was a clear example. Defence remained the largest segment, but its share dropped to 58.4 percent in Q4 FY26 from 84.0 percent in Q4 FY25. Space rose sharply to 19.5 percent in Q4 FY26, up from 5.2 percent in Q4 FY25. Exports including deemed exports increased to 16.9 percent from 7.2 percent. Meteorological was 4.9 percent versus 2.4 percent.

Order type mix in the quarter also shifted. Q4 FY26 revenue was dominated by production at 67.7 percent, while exports contributed 24.0 percent. Development was only 2.5 percent and AMC and service was 5.8 percent. This is a notable contrast to the full year mix, where FY26 revenue was 51.0 percent production, 27.6 percent development, 9.4 percent AMC and service, and 11.9 percent export. The quarter’s high production share and higher export contribution coincided with stronger margins.

The cost line also improved in a visible way. Standalone gross profit in Q4 FY26 rose to Rs 238 crore from Rs 184 crore, a 29.5 percent increase, while employee expenses and other expenses increased but did not consume the benefit. Employee expenses were Rs 54 crore versus Rs 42 crore in Q4 FY25, and other expenses were Rs 24 crore versus Rs 22 crore. The result was that operating leverage showed up clearly in EBITDA.

Financial summary

Order book and customer profile: visibility improves, but execution discipline still matters

For defence electronics manufacturers, the order book is the clearest indicator of future revenue visibility. Astra ended March 2026 with a standalone order book of Rs 2,141 crore. The built up summary in the presentation shows orders received of Rs 2,226 crore and orders executed of Rs 2,141 crore between 31 December 2025 and 31 March 2026.

The order book is diversified across categories, with defence and public sector at 54 percent, space at 11 percent, meteorological at 2 percent, and exports at 33 percent. That export share is large enough to matter strategically and operationally. It also links directly to the company’s joint venture and overseas relationships that appear repeatedly through the presentation.

The order type split as of 31 March 2026 shows production at Rs 1,243 crore or 58.1 percent. Development stood at Rs 369 crore or 17.2 percent. Export orders were Rs 179 crore or 8.4 percent. AMC and service was Rs 350 crore or 16.3 percent. This mix suggests the company is carrying a meaningful pipeline of annuity like service work alongside production orders.

Q4 FY26 order wins were led by radar and included several large production orders. The largest items listed include radar orders for BEL and ARC, with individual order values such as Rs 79.7 crore and Rs 67.4 crore, and additional BEL radar production orders of Rs 42.5 crore and Rs 26.8 crore. Space production orders from ISRO of Rs 22.0 crore and Rs 16.2 crore also appeared, along with an EW production order of Rs 19.0 crore for BEL, a missile production order of Rs 18.5 crore for BDL, and a meteorology production order of Rs 8.3 crore for IITM. Total major orders received in Q4 FY26 were Rs 300.3 crore.

Across FY26, the top ten orders received added up to Rs 657.0 crore, and the list shows the breadth of engagement. It includes meteorology orders from IMD, radar orders from DRDO and BEL, development work in EW for DRDO, and an export order for ARC of Rs 138.0 crore.

On the customer side, FY26 standalone revenue of Rs 1,155 crore was spread across government research, DPSUs, meteorology departments, and exports. DRDO contributed 28.2 percent, BEL and other DPSUs 22.7 percent, IMD and meteorology departments 18.0 percent, exports via ARC and Aelius 11.9 percent, ISRO and SAC 6.4 percent, BSF 0.3 percent, others 9.5 percent, and private customers 3.0 percent. The mix confirms that Astra’s base remains anchored in public sector and strategic programs, while export and private exposure is material but still secondary.

Capital discipline: working capital improves in FY26, cash flows turn positive

Astra’s working capital cycle has been a weak spot in the recent past, and the presentation’s multi year metrics put that in context. Debtor days peaked at 273 in FY25 and improved to 216 in FY26. Inventory days reduced to 193 from 213. Creditor days increased to 36 from 27. The net effect was a drop in cash conversion cycle to 374 days in FY26 from 459 days in FY25. Even after the improvement, the cycle remains long, which is common in defence and government oriented contract structures, but it still demands process discipline.

The cash flow statement shows that FY26 was a turning point compared to FY25. Standalone net cash from operating activities was Rs 376 crore in FY26 versus negative Rs 99 crore in FY25. The line item for changes in working capital was positive Rs 204 crore in FY26 versus negative Rs 252 crore in FY25. This swing largely explains the reversal in operating cash flow.

Investing cash flow was negative Rs 86 crore in FY26, similar to negative Rs 73 crore in FY25. Financing cash flow was negative Rs 196 crore in FY26 versus positive Rs 142 crore in FY25. Despite the financing outflow, the company ended FY26 with a higher cash position. Cash and cash equivalents at the end of the period were Rs 116 crore in FY26 versus Rs 21 crore in FY25.

Balance sheet movement shows the working capital intensity behind the revenue base. Standalone inventories were Rs 609 crore at March 2026, largely unchanged from March 2025. Trade receivables in the standalone balance sheet were Rs 165 crore at March 2026 versus Rs 21 crore at March 2025, while investments were Rs 687 crore versus Rs 783 crore. Current borrowings reduced to Rs 224 crore from Rs 379 crore, and non current borrowings rose to Rs 63 crore from Rs 39 crore.

Strategy and structure: LEAP framework, R and D push, and a potential demerger

Astra positions itself as a defence and space sector company with more than 30 years of experience in radar, electronic warfare, and strategic electronics. The presentation highlights long standing participation in India’s space program for 25 years and cumulative work across 35 radars, 25 satellites, and 15 strategic programs. It also notes capability in GaN and GaAs MMIC products up to 40 GHz.

R and D spending has increased materially over time. The presentation states R and D expenditure of Rs 58 crore in FY26 compared with Rs 23 crore in FY21. Headcount quality is also emphasized, with 704 R and D professionals, including 93 with a masters degree and 8 with doctorates.

Strategic execution is framed through the LEAP framework. Lean and Learn focuses on collaborations with defence PSUs, start ups, early stage companies, and academic institutions to build IP driven product capabilities quickly. Expansion is aimed at adjacencies such as anti drone, EW, satellites, SDRs, and electro optics through joint ventures. Products focuses on development with government research organizations for defence and space and entering commercial end user markets for radars. Accretiveness centers on ROE, profitability, margin improvement, working capital efficiency, and free cash flow generation.

The presentation also contains a significant structural update. The board has given in principle approval to merge the space, meteorology, and hydrology business undertakings into a separate entity. The stated rationale is focused management attention and operational efficiency, tailored growth strategies and capital allocation for those sectors, and unlocking value for shareholders. The company notes that the final decision, structure, share exchange ratio, and terms will be taken after receiving reports and opinions from consultants.

From an investor’s lens, the proposed demerger theme matters because the company’s revenue and order book mix already shows multiple business lines moving at different cadences. Defence programs can be lumpy but large, space programs can be specialized and multi year, and meteorology and hydrology can be driven by government missions and budget allocations. Separating these undertakings could clarify capital allocation and reporting, but it also introduces execution and regulatory steps that will need time.

The company also provided sector specific financial data for space electronics. It reported FY26 revenue of Rs 110.6 crore for the space segment, an order book of Rs 187.1 crore as on March 2026, and order guidance of Rs 154.0 crore.

Takeaways for investors: strong profitability, improving cash conversion, and a clearer runway

Astra Microwave’s Q4 FY26 showed a combination that investors typically look for in defence electronics: revenue growth, margin expansion, and better cash flow. The quarter’s profitability was supported by improved gross margin, operating leverage, and lower finance cost. The full year results reinforced the trend, with EBITDA and PAT growing faster than revenue.

The order book at Rs 2,141 crore provides visibility, and the category mix shows that exports are not a side story. But the long cash conversion cycle is still a core feature of the business model. FY26 showed improvement in debtors and inventory days and a sharp swing in operating cash flow, yet the working capital base remains large.

Strategically, Astra is leaning on three pillars disclosed in the presentation: a deeper R and D commitment, joint ventures and subsidiaries to widen product coverage, and a portfolio approach that could lead to a demerger of space, meteorology, and hydrology undertakings. The company also states a target of 15 to 20 percent revenue growth and expects a higher proportion of revenue from complex system fabrication within three to five years.

The near term story, based strictly on this presentation, is disciplined execution. The company is expanding margins, rebuilding cash generation, and sustaining a large order pipeline. If it sustains working capital control while converting the order book efficiently, the FY26 performance could become a more repeatable template rather than a one quarter peak.