Astra Microwave Products Ltd

BSE:532493

Earnings Call Transcript 2024-Q2

[Operator]

Ladies and gentlemen, Good day and welcome to Astra Microwave Products Limited Q2 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. S.G. Reddy, Managing Director. Thank you and over to you, sir.

[S. Reddy, executive]

Thank you. Good afternoon to everyone. A warm welcome to all the participants in the post results earning call of our company. I am with my colleagues, Mr. M.V. Reddy and Mr. Atim Kabra, and SGA, our investor relations advisers. The results and investors presentation for the half year ended '24 are already loaded on our company website and stock exchange. I hope you had enough chance to look at it.

I'm pleased to share with you that we have reported a healthy set of numbers for the quarter with the top line registering about 10.6% year-on-year growth. Our top line performance was in line with the previously indicated quarterly guidance. EBIDTA margins also came in at a healthy 22%. Our order wins continue to be healthy. We have booked about INR 405 crores worth of orders in this quarter, which comprise of about INR 115 crores from radars, INR 233 crores from GW segment, INR 9 crores from telemetry, INR 19 crores from space, INR 26 crores from exports and rest from meteorology and hydrology sectors. Overall, order book at the end of half year stands at INR 1,867 crores, with the majority being domestic orders.

On the organizational side, I wish to inform you that we have strengthened the Board with the induction of Mr. Suresh Somani as Non-Executive Director; and Mr. S. Varadarajan as an Independent Director. Mr. Somani has a right experience in the capital market and management areas. Apart from his -- apart from this, his associates hold a good stake in the company. Mr. Varadarajan, he's the retired Director of LRDE, and he has distinguished experience in radar domain, which we hope is going to help Astra in a bigger way.

Coming to the specific numbers of stand-alone performance in Q2. As mentioned earlier, year-on-year growth, we have recorded about 10.6%. The revenues stood at INR 189 crores as against INR 171 crores. Sequentially, we had an even better performance, recorded 42% growth. There are other various indicators, which we've already presented in the investors presentation, which I request you to go through.

One important information, which I want to share with you is the improvement in the margins is largely because of the change in the product mix solely during the quarter, which is skewed more towards the domestic. We continue to have similar kind of performance in the coming 2 quarters. We also would like to reaffirm our guidance of -- year-end guidance of INR 900 crores to INR 950 crores, with a PBT of about INR 140 crores to INR 150 crores.

To achieve these numbers, we are planning to execute about INR 200 crores to INR 300 crores in Q3, and that has really come in Q4 so that the annual guidance can be met. As I mentioned, since the major sales in the next 2 quarters will be from the domestic, we are confident to deliver a reasonably good margin in the coming quarters.

As stated earlier, our Government of India has initiated to foster local manufacturing as well as raise in the transfer of technology activities by DRDO and ISRO. It would benefit companies like Astra. Further, we have been taking steps to move in the value chain, moving from subsystem to a systems vendor, where opportunity sizes are fairly large. We have identified specific growth areas for future expansion such as SATCOM systems, thin profile radars, ground surveillance radars, Doppler Weather radars and anti-drone and so on.

Apart from these specific business-related updates, which I would like to share with you, apart from backing about INR 405 crores of orders during the quarter, we were able to close the entries worth about INR 11 crores and waiting to receive orders for the same very soon. The company has signed a ToT with In-Space NSIL for its band MiniSAR, which we hope will help us in terms of getting into the defense radar, apart from the space-trajectory radars in a bigger way.

Anti-drone radars, which we kept on sharing with you the developments in the last 2 quarters, which is being developed with the LRDE technology is in the final stage of testing. We expect to start field trials by the end of this year. NavIC chip approval is still waiting, unfortunately. There are some technical issues to be resolved, which is taking time and we should be informed of the development on this front.

The joint venture company has done very well. The -- pending export licenses were received by the company in the last quarter. It was able to ship about INR 50 crores of goods in the last quarter. And as a result, the company has been profitable. It is expected to about INR 110 crores to INR 150 crores of business for the whole year with a good amount of profits.

Again, relating to the joint venture company, the SDR Manpack, which we are developing under NCNC program, has successfully completed the first trial of NCNC and it is waiting for the final trials of NCNC first quarter of the year.

With this, I'll hand over to Mr. M.V. Reddy, and later on to Mr. Atim Kabra to share with you further developments in the company. Thank you.

[Maram Reddy, executive]

Thank you, SGR. Good afternoon, everyone. As it was stated in our last earnings call, we have made a good beginning with the performance of Q2, both in terms of order book as well as sales. We would like to reiterate that we have good visibility to meet our guidance for the rest of the 2 quarters also. Out of INR 409 crores backed in Q2, INR 383 crores were booked from domestic market and majority comes from the core sector that is radar and electronic warfare segment. So S.G. Reddy has already given you a breakup of the domestic sector order book.

We are also pleased to inform that we bagged a few strategically important R&D projects like development of imaging radar for DRDO and also supply of satellite EW payload subsystem for a DRDO-based satellite system, and [indiscernible] production in nature. We also have been awarded with further sanction orders for development of radars under MAKE-II category for military and meteorology applications. And also, we have participated in few RFPs and responded to RFIs to supply CDS and other systems.

With regard to sales, we have ramped up our domestic sales in Q2 and will further get improved in coming quarters. Our JVC Astra Rafael Comsys has bagged few strategically important contracts last quarter worth of almost $45 million to deliver software driven radios for the Indian Army, and also for the Indian Air Force through DPS' HAL in the current year and actively pursuing more opportunities in the domain of tactical communications and electronics.

That's all for my side. I would like to happy to answer your questions. Now I hand over to Ms. Atim Kabra to share his thoughts. Thank you.

[Atim Kabra, executive]

Hi, good afternoon. This is Atim. Happy Diwali to all of you. Since we last spoke, the world is further in turmoil. October 7 saw the Israel-Hamas conflict shake the world and further started the illusion of relative peace and calm, which had come to define the second half of previous century. My idea here is to give you a direction on where we are going and what is our thought process and how it is being defined in the current context.

Because a symmetrical nature of warfare and the blurring of lines between civilians and professional combatants has further marred the landscape, which had already seen broad-based warfare and its derivatives profoundly changed the entire history of warfare tactics. I mentioned this in the context of electronics-based warfare emerging as a central pillar around which the theater of war will converge, and we are a player in this area.

I saw the results of BAE Systems a few days back. And it was interesting to see that defensive sectors are emerging as growth drivers in the economy, even in the U.S. I'm sure you are equally impressed as most of us by the significant increase in our order book this year. We have an order book in excess of, I think, INR 2,300 crores, driven by significant changes in the defense acquisition policy that we are all conversant with.

I'm very hopeful that we will continue to see positive numbers coming in from our traditional tender-based businesses as we detailed in our presentations during our QIP. And as we go along, SGR and MVR will be adding more color to this.

In my previous analyst meet update, we had spoken about us exploring various adjacencies to our core businesses, for which we wish to diversify our order book mainly from a tender-based approach. Towards that, as I detailed earlier, we have been working on a few solutions which could be branded as Astra solutions. Though I must admit that the search for defining such solutions often takes a backseat to the business exigencies at hand, wherein our current order book being translated into sales has to be clearly prioritized.

However, we hope to have one of our solutions ready before the end of the year, which will not only have a domestic order base, but also will put us on the international map, with a semi off-the-shelf products, which can be marketed to the rest of the world. It is equally critical to put concepts being explored on the slow burner if margins and suitability to the market is hazy, while we delve deeper into specific opportunities.

As we have gone about defining our solutions, we have showed a few of our initial concepts being explored, where we found significant competition and nonexistence of a deep moat for our products. So our focus has been on margin-enhancing businesses rather than margin high-volume businesses.

So one of the skill sets we explored was our MMIC chip design division, which you are very well aware, has been one of the core sense of Astra. We have been at it since 2005 and have built a deep expertise at MMIC chip designs. So our learning was that MMIC is best suited for defense applications and regular commercial chip design is a completely different ballgame, a different skill set where we would have to deploy a significant amount of capital and resources.

So we've explored and delved deeper into our MMIC spends. We have tried to explore how we can build our capabilities in our -- it's already existent in our 100%-owned Singapore subsidiary as well as work on a larger format with our clients, both existing and potential future clients. I'm glad to report that at this juncture, we have significant interest from a few select clients towards enhancing significantly their offtake from us and jointly developing some more capabilities.

The key is here to achieve this profitably and optimally without stretching our working capital, while we would love to partake in the proceeds of the jointly developed and marketed products for the long term, so royalties. And this concept is quite appealing as it gives us both scalability as well as profitability in a deep-ported business. So if this joint venture or -- this is not a joint venture actually. If this association comes about, it will be a very significant achievement for our MMIC division, and we hope to keep you posted on this.

Likewise, as was just mentioned, our Rafael JV, ARC, is doing quite well, and we will be profitable this year. And as the order books and execution capabilities pick up there, we should see a significant flow of business to the parent company -- to us. So lastly, I need to highlight the induction of the 3 new directors on our Board as SGR has mentioned. Mr. Varadarajan is a very well-respected scientist with multiple accomplishments to his credit. While Suresh further strengthens the equity owner's presence on the Board of the company and with its multiple attendant benefits.

With this, I will hand you over to my colleagues to talk to you and walk you further. Thanks. Guys, over to you.

[S. Reddy, executive]

Yes. Let us start the question and answers.

[Operator]

[Operator Instructions] First question is from the line of Amit Dixit from ICICI Securities.

[S. Reddy, executive]

Hello? We are not able to hear Amit.

[Operator]

Mr. Amit, your voice is not audible. As there is no response from the current questioner, we will move to the next question from the line of Venkatesh Subramanian from Logictree Consultants Private Limited.

[Venkatesh Subramanian, analyst]

Yes. Season's Greetings. Happy Deepawali. And congratulations on a very good set of numbers. I have basically 3 questions taking off from what you said. One is in terms of what we are pursuing and in the past transcripts, you've been talking about broadly looking at the top line revenue in excess of INR 8,000-odd crores over a period of time at a run rate of approximately INR 2,000 crores. That is one. But to achieve that kind of number, you would need to have an order buildup over the next 18 months to have a visibility for, say, 4 to 5 years. Do we have some sort of a blueprint to get that? That's one question.

Second question is, sir, which is with respect to NavIC. I was reading one of the recent interviews of Rajeev Chandrasekhar, the Minister -- honorable minister, saying NavIC could be mandatory in a lot of devices. In NavIC, are we a pure play? Or do you think we have competition out there and we will only get a piece of the pipe? That's second.

And third question is MMIC. How big can this opportunity be in terms of, say, over a 5-, 6-year period time if things work out for you? And you said you are uniquely positioned in the defense application side.

And one suggestion on the fourth one is, sir, if we are doing a little bit of crystal ball gazing over the next 5 to 7 years, where would our revenue set broadly come from? Whether it would be in terms of domestic tenders? Would it be other services and activities as Atim mentioned? Or would it be exports? Would it be MMIC? Some sort of crystal ball gazing or give us an idea where the company is headed to various strategic segments. And also would be helpful because Indian elections are coming up and if defense tendering or Atmanirbhar, all that takes a backseat for some reason, then we will have a plan B in executing revenues over a period of time. That's it from my side, sir.

[S. Reddy, executive]

Yes. Atim, you take a couple of questions on NavIC and MMIC, then we'll take the rest.

[Atim Kabra, executive]

Sure. There are 2 ways to look at NavIC, right? You can be the basic chip supplier or you can look at being a value-added supplier. NavIC is still some time away, just to be very upfront about this, number one. Number two, there are -- NITI had given the contract to 2 entities on this to develop the chip within the country, one was us and the other is an entity cord. And we did it in a joint effort along with another partner, where we own 50% of the IP. So it's not exclusive to us, number one. We believe there's another entity by the name of Elena GeoSystems, which has made some claims about this. We don't know much about this, so you guys can explore.

So we -- our strategy would hinge around the -- having the processor combined with the RF front end and then creating some modules around that. So we can be a value-added supplier in the NavIC space. So that would be the broad strategy. And I'm reiterating, this is still a few years away to the bare minimum. We recently met some very senior government official -- ex-government official and it was reiterated that the intention is there to completely support the ecosystem, but it will take some more time for the product to be developed.

The good thing is we are soft coded, which means our products can actually be multiple positioning systems. So we can do GPS from NavIC, NavIC on GPS or for that matter, we can code in Beidou also, et cetera, et cetera. I hope that answers the question on NavIC.

The MMIC part, which I would like to address here is that we are looking at creating a portfolio of MMIC products wherein a few chips or few products from our existing sale portfolio can be picked up by our marketing partner, while we develop midterm quick reaction product for them jointly. And at the same time, in parallel, these are capabilities in MMIC to create products over the long term, which could be 1 to 2 years, right?

I would -- let's say, we are looking at least 7 to 10x -- maybe that's aggressive, okay, over the 5 years that you spoke about, okay? But we definitely are looking at about 3x, 4x of the current MMIC portfolio in a few years' time. Now that -- interestingly enough, that would imply creating a long sale of royalty which should come if our current efforts are successful and translate into a business opportunity and that's dedicated to dotting the Is and crossing the Ts in our final agreements, which are going to be done. So it's -- we'll keep you posted as it happens, but this is a long region, which you guys are looking for. S.G.?

[S. Reddy, executive]

Yes. So the other part in terms of the visibility for the company for the next 3 to 5 years. As we have mentioned in multiple interactions with many of you, basically, we are looking at the overall pie that is available in the areas where we are there in terms of the radar, EWs, missiles and telemetry, sales, exports and key projects and special projects. We see a visibility of -- in excess of about INR 39,000 crores up to year 2030.

So this visibility, we have split up into 3 parts where we see definite opportunity for us maybe on a single tender or a preferred tender basis, about INR 5,000 crores of opportunity. There are other 2 segments where there is a limited competition and severe competition, where the success rate we are assuming at about 30% to 40% where there is a medium competition, and about 10% to 15% with severe competition. If you take all these 3 parameters and looking at the products, what I have indicated, we see a visibility of business in excess of about INR 8,000 to INR 10,000 crores. That is what we can say as of today.

[Venkatesh Subramanian, analyst]

So that would be translating broadly to a run rate of about INR 2,000 crores approximately per annum, sir, going forward, broadly?

[S. Reddy, executive]

Yes, that is how we see it. And basing on that one, we have projected an accumulative turnover of about INR 8,000 crores by the year '27, '28. Yes. As of today, that is how visibility what we have internally.

[Venkatesh Subramanian, analyst]

Got it. Got it. And my last question was that the -- in terms of the various segments that we have, exports, MMIC, NavIC, domestic tenders, other, like you said, limited competition and serious competition, is it possible -- I don't need an answer right now, sir. But in the future, is it possible that we can say that to achieve that -- if we do a crystal ball gaze 5 years down the line, what would the company look like in terms of various segments based on your internal workings?

[S. Reddy, executive]

Yes. Probably, we can exchange the information offline. But immediately, whatever I can share with you, this is what I can talk to you right now.

[Operator]

[Operator Instructions] Next question is from the line of [ Sitanshu Bhatia ] from Gandhi Securities & Investment Private Limited.

[Unknown Analyst]

I just needed a few updates. So the delay in the approval for NavIC chip, is it because we have some new observations that we've been facing? Or is it a delay from the regulatory side? And roughly, I mean, by when can we expect progress on that front?

[S. Reddy, executive]

No, there is no regulatory as such. Ultimately, whatever chip is designed is to be approved by ASAC. So there are certain observations given by them. The Manjeera, which is our partner, who is working on that is trying to address those issues and that is where the delay is happening.

[Unknown Analyst]

So in the last quarter, it was like some -- we would have -- we were expecting to address those observations by within a week or so in the first week of September. So...

[S. Reddy, executive]

Yes, that is what -- that is the reason why I used the word unfortunately, okay? So somehow it is going in cycles. And that is the reason why now in this call, I don't want to commit any date. But the only hitch is from all the observations, the technical side, it is taking time to address.

[Unknown Analyst]

So roughly, can we expect within the next quarter or so?

[S. Reddy, executive]

Hopefully. That is what our partner has given to us. So we are hopeful that it will be done.

[Unknown Analyst]

And sir, with regards to the NCNC trials, which was scheduled in October, November and which we were preparing for the SDR Manpack. So any update on that, sir?

[S. Reddy, executive]

Yes. As I mentioned in my opening remarks, it has gone through successfully in the first trial, which is called UTRR, okay? So only 3 companies have gone through that successfully. Ours is one company. Now the final trials are awaited, it is scheduled as of today in the first quarter of next year.

[Operator]

Next question is from the line of Col Sarjeet Yadav from Mount Intra Finance Limited.

[Col Sarjeet Yadav, analyst]

Congratulations for the good numbers. And Happy Diwali to all of you. I also congratulate Mr. Somani and Mr. Varadarajan, the directors. So my question is, firstly, about the order book. In the presentation, you've mentioned about INR 1,867 crores of order, but I just heard sometime back about INR 2,300 crores of orders. So it is a difference because of the consolidated order book? Or have we received anything after the 30 September that there's an increase of about INR 450 crores? this is first question.

Second is about the AESA radar and can you give an update when you'll expect an order? Especially in view of the upgradation of Su-30, which has now been approved, do we see AESA radar being employed there? Or any of the traction we have for the AESA radar, sir?

[S. Reddy, executive]

Yes. The order book number mentioned by Atim is inclusive of the joint venture company. There is a consolidated order book, whereas whatever number I spoke about is the stand-alone. The other part, AESA radar, I request M.V. to share ideas and an update.

[Maram Reddy, executive]

Yes. Talking about AESA radar, that is Uttam radar we were talking about, we are expecting soon production orders from HAL for the first series of limited production. And another question you asked about the Su-30. We are waiting for the RFPs to be out from DRDO, and we are actively working on that particular opportunity also.

[Col Sarjeet Yadav, analyst]

Sir, just a follow-up question. Do we have -- do we see any competition in this -- from radar? Or AESA radar, do we see upgradation or it's more like confirmed sort of order...

[Maram Reddy, executive]

Yes. For Uttam, in my experience, as of today, we are the only player. But in future, we never know that some companies may come out in competition. But as of today, we are the major supplier of the radar portion in that segment.

[Operator]

[Operator Instructions] Next question is from the line of Amit Dixit from ICICI Securities.

[Amit Dixit, analyst]

Yes. I have 2 questions actually. The first one is on Slide #32, where you have indicated the opportunity size of Uttam radars for various platforms. Now is it possible to, let us, expect a lot of -- I mean, media articles suggest that Tejas Mark 1A, for instance, there could be additional order of 97 numbers and so on. So this opportunity size that you have mentioned for Tejas Mark 1A, for how many numbers it is? For Tejas Mark 2, how many numbers? If you can just let us know so that we are at least abreast of if any future orders come, then we can have it in our estimate.

[Maram Reddy, executive]

Yes. We have considered the -- in the existing lot of LCA 1 production, we are expecting at least 440-plus numbers for the indigenous Uttam radar. That is a figure we have considered. And apart from that, the additional sanction of 97 numbers also, we have taken note of. For LCA Mark 2, as of today, we have not considered any figure because we are waiting for the final configuration to be decided for that.

[Amit Dixit, analyst]

Okay, so we have considered 440 numbers of Uttam radars, including the -- including 97 numbers?

[Maram Reddy, executive]

Yes. Mark 1 and also there are other variants like MCO version of it. So there are many variants of it.

[Amit Dixit, analyst]

Okay. Okay. The second question is essentially, I think you covered it in the answer to earlier participant for Sukhoi upgrade. There is this Virupaksha radar that has been talked about. Now what components are we applying in that? And is the value per radar being very different from Tejas Mark 1A?

[Maram Reddy, executive]

Discussions are going on in DRDO. As of today, we are not finalized about the configuration yet. But yes, there will be likely Uttam variant maybe -- may go in. But I just -- as of today, the configuration is still not being finalized. I think discussions are going on. Maybe I think in a couple of months' time, we will come to know about that.

[Amit Dixit, analyst]

And we are the only player there, or discussions are going on the several players in this sector?

[Maram Reddy, executive]

No. For -- if it is a different configuration, if it is different from Uttam, then we'll have a competition from other players also. But if it is the similar to Uttam, then I think we are the only one as of now.

[Amit Dixit, analyst]

Okay. Sir, the last one from my side. Are we affected in any way by this Israel-Palestinian conflict, either in terms of supply chain or in terms of our exports?

[Maram Reddy, executive]

As of now, we don't see any major issues in supply chain. But yes, going forward, it all depends on how far this war goes on and how the local industry gets affected. But as of today, when we discuss with our partners, this is in control. So with that, figures only, we are moving ahead.

[Operator]

[Operator Instructions] Next question is from the line of [ Yug Mehta ] from AP Capital.

[Unknown Analyst]

Sir, our margins are looking good despite a 48% export contribution to the top line. I understand that this is because of 2 different types of export orders. One is the direct export order with low margin profile and other one is -- has a better margin. Would it be possible for you to give further bifurcation of both of these export orders individually?

[Maram Reddy, executive]

You have both questions and answered similar question. Anyway, out of INR 72 crores, what we booked in sales in Q2, close to INR 65 crores are the deemed exports, which is being supplied to a joint venture and INR 5 crores are direct exports to be -- our partner.

[Unknown Analyst]

Okay. Okay. Next question, can you throw some color where are we on our various projects that we wanted to pursue with QIP proceeds?

[Maram Reddy, executive]

I didn't get you. Come again?

[Unknown Analyst]

Yes. Can you throw some colors on where are we now with our various projects that we wanted to pursue with QIP proceeds?

[Maram Reddy, executive]

Yes. We have taken up multiple projects in development to address the requirement for military application and as well as for the meteorology application. And we started some development, a few critical MMIC chipsets also, as SGR mentioned in the opening remarks. So all this, the development has been started and it is actively pursued. Right now, today, we don't have a clear breakup of what exactly the project, how much we have invested in that particular amount.

[Operator]

[Operator Instructions] Next question is from the line of Ketan Gandhi from Gandhi Securities.

[Ketan Gandhi, analyst]

Sir, in project Kusha and project Virupaksha, basically, we are into GaN-based radar, and I believe nobody in India has the capability as do we have. So what is your thought on that?

[Maram Reddy, executive]

Yes. I would say we have capability, but I can't say other's capabilities unless -- basically because of war, the tender and participation, until we get the contract on hand, we cannot comment on somebody's capability. But as of today, again I reiterate, we have capability of building the GaN-based T/R margin as well as the radar.

[Ketan Gandhi, analyst]

Sir, I just couldn't understand what you said about the SDR impact for Army. Are we in? Or I mean, where do we stay? I just missed that. Sorry to repeat, but...

[Maram Reddy, executive]

We are very much in, as SGR has mentioned, we have completed that UTRR trial successfully. Only 3 companies out of 8 got through in that trials, we are among one of them. So final trials have been scheduled sometime in January and February. So I think once it gets through, probably we will be knowing the rate of the particular tender.

[Ketan Gandhi, analyst]

Sir, is it possible to share the other 2 competitors' name?

[Maram Reddy, executive]

No, we can't share.

[Operator]

Next question is from the line of Santanu Chatterjee from Mount Intra Finance Private Limited.

[Santanu Chatterjee, analyst]

Congratulations for great set of numbers. My question is on your CapEx cycle, sir. Can you share that what kind of CapEx that will happen in the next couple of years? And second one is on the working capital days. Your working capital days is hovering around 250 days. So what is your guidance going forward in the next 1 year or the next couple of years, sir?

[S. Reddy, executive]

So in terms of the CapEx, as mentioned in our annual report, we are spending about INR 45 crores in the next 12 months. Mostly this is all to augment the existing operations to a large extent. Then in terms of the working capital, see, working capital is going to be intense and probably the number, whatever you have stated, it may be around 250 to 270 days. I don't see any other way of reducing that number. So it continues to be very working capital intensive.

[Santanu Chatterjee, analyst]

Okay. And sir, on your margin front, can you maintain this -- your guidance that it will remain on the vicinity of 20%? Or it will increase from here onwards as your product mix will change going forward?

[S. Reddy, executive]

There will be some improvement, but I don't see significant improvement from Q2 numbers, whatever we have achieved. But it is going to be improvement from this one, but it is not going to be very significant. Maybe, see, the PBT level, I think we are around 17.5% kind of thing. Probably it can go up to 18%, 18.5% by the end of the year. That is our look at the numbers.

[Operator]

[Operator Instructions] Next question is from the line of Karthi from Suyash Advisors.

[Karthi Keyan, analyst]

On the SDR part, Army SDRs will be in the joint venture or will it be in the parent entity, sir?

[S. Reddy, executive]

It will be in a joint venture.

[Karthi Keyan, analyst]

So one question, sir. Last we spoke, you were talking about slightly higher dispatch numbers for the joint ventures, but now you are guiding for a lower number. So if I may ask you, what is the biggest constraint in terms of getting export licenses?

[S. Reddy, executive]

Export licenses have been received. That is what I mentioned.

[Karthi Keyan, analyst]

Yes.

[S. Reddy, executive]

Now like any other product, here also there are some technical issues out there. So probably the deliveries may be a little slow in the next -- until the end of the financial year. Opportunity is there to improve on those numbers. But as of today, the indication is that probably it can be a top line of about INR 110 crores to INR 150 crores.

[Karthi Keyan, analyst]

Right, right. Because originally, you were planning to ship more than INR 200 crores, if I remember correctly.

[S. Reddy, executive]

Internally, even today, that is a target. But we see some technical challenges apart from that now because of this war in Israel. There is a problem in terms of the people traveling, how to come in and address these technical issues. That is another uncertainty which has come in. Because of that, there is some delay. Otherwise, there are no issues.

[Operator]

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to the management for the closing comments.

[S. Reddy, executive]

Yes. Thank you, everyone, for participating and having a good conversation. And look forward to talk to you again at the end of third quarter. Thank you very much.

[Maram Reddy, executive]

Thanks, everybody.

[Operator]

On behalf of Astra Microwave Products Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.