Digilogic FY26: Profit growth accelerates as the company expands into RF and manufacturing

Digilogic Systems Limited operates in a niche part of India’s aerospace and defence supply chain. It builds test, measurement and simulation systems used to validate complex platforms such as avionics, radar and EW systems, missiles and satellites. The company positions itself as a deep-tech player that combines in-house engineering with system integration, typically using COTS hardware while adding value through software and integration tailored to customer requirements.

For FY26, the company reported operating income of 78.27 crore, up 8.4% from 72.19 crore in FY25. Profitability improved faster than revenue. EBITDA rose 16.5% to 15.18 crore, PBT increased 30.7% to 13.76 crore, and PAT grew 33.8% to 10.43 crore. Management described this as consistent and sustainable year-on-year growth.

The FY26 updates are important not just for the income statement momentum, but also because Digilogic is preparing for a shift in scale and scope. The presentation highlights two strategic moves: a new RF-focused subsidiary and Project Udaan, a manufacturing facility intended to bring electronics manufacturing and advanced testing capabilities under one roof.

FY26 performance: steady revenue growth, stronger profitability

The headline in FY26 is margin improvement. While the deck does not provide a full margin bridge, the growth rates show that EBITDA and PAT expanded much faster than operating income.

A second key point is the balance sheet and cash flow movement disclosed in the presentation. Net worth increased from 33.17 crore in FY25 to 108.09 crore in FY26. Total debt reduced from 13.34 crore to 4.06 crore, which management presented as a 70% reduction. Cash flow from operations improved sharply, from minus 10.51 crore in FY25 to 12.63 crore in FY26.

Working capital remained a key operating feature. Debtor days reduced from 221 days in FY25 to 203 days in FY26. The direction is positive, but the level remains elevated, which is relevant for a company serving government-linked programmes where collections can be slow.

Revenue mix: Measurement equipment leads, with checkout and ATE as core pillars

Digilogic’s FY26 revenue mix shows a business concentrated in three categories. Measurement equipment accounted for 49% of revenue, checkout systems 22%, and automated test equipment 17%. These three categories contributed 88% of FY26 revenue, according to the presentation.

Smaller categories included data acquisition systems at 5%, AMC at 5%, and software development at 1%. The deck also lists other income at 1% within the segment mix presentation.

This mix matters because it suggests Digilogic is not a pure services company. A large portion of revenue is tied to equipment and systems, supported by engineering and integration. At the same time, the presence of AMC indicates recurring service work, though it remains a small share.

Strategy and expansion: RF focus and a manufacturing build-out

Two initiatives define Digilogic’s near-term strategic narrative.

First, the company incorporated a new subsidiary, Abhedhya Systems Private Limited, on 23 May 2026. The presentation frames this move as a response to changing global warfare dynamics and the growing prominence of RF. The subsidiary’s stated agenda is to design, develop and manufacture RF-based solutions and to address next-generation applications across telecommunications, defence, aerospace, radar systems and satellite communications. It is also expected to provide specialised engineering services including electromagnetic simulations, high frequency circuit designs, PCB layouts and RF system optimisation.

Second, Project Udaan represents a step-change in infrastructure. The company stated that Bhoomi Pooja was conducted on 14 April 2026, and that work orders were placed to commence construction. The timeline shared is detailed: building construction from April 2026 to May 2027, machinery ordering from December 2026 to February 2027, machinery erection from June to July 2027, trial runs from October to November 2027, and commencement of production by December 2027.

In the CMD’s vision note included in the deck, the company describes the facility as a 65,000 square feet manufacturing site in Hyderabad with electronic manufacturing, functional testing and environmental testing facilities under a single roof. The stated goal is to position Digilogic as an electronic sub-system manufacturer for the defence and aerospace market, beyond its existing test and measurement arena.

Alongside these initiatives, the FY27 outlook section lists product development efforts: a custom built single board computer in an advanced stage for deployment, development of an indigenous harness tester for defence and aerospace cable loom testing challenges, and development of high precision gimbal systems.

FY27 outlook: disclosed order book and growth guidance

The presentation provides a clear snapshot of the commercial pipeline as of 30 May 2026. The company stated an order book of 31 crore, with tenders quoted and awaiting finalisation close to 110 crore and business opportunities identified and under progress close to 150 crore.

On the back of this, management guided for FY27 growth of 25% to 30% in top line and 45% to 50% growth in EBITDA and PAT. The deck also states that the company will continue to look for new opportunities for further integration into the defence and aerospace sector.

Taken together, the FY26 performance and FY27 guidance outline a company trying to compound profitability while investing for scale. The major variables to watch will be conversion of the quoted tenders, execution of Project Udaan’s timeline, and the ability to keep working capital under control as the business grows.

Closing takeaways

Digilogic’s FY26 results show a business with moderate revenue growth but accelerating profitability, alongside visible improvements in debt levels and operating cash flow. The company is now attempting to widen its opportunity set through an RF-focused subsidiary and by building manufacturing and testing capabilities via Project Udaan. FY27 guidance is explicit, supported by a disclosed order book and tender pipeline. The next phase will depend on execution and cash conversion, particularly given debtor days remain elevated even after improvement.