Astra Micro Wave Products Ltd

NSE:ASTRAMICRO

Earnings Call Analysis

Strong Start to FY '25 for Defense and Space Company

The company started FY '25 positively, recording a 16% year-on-year increase in revenue and improving gross margins to 41.8%. The order book reached ₹2,099 crores, heavily skewed towards the domestic defense sector. EBITDA improved significantly to ₹23 crores from ₹5 crores last year, with a margin of 15%. The profit after tax was ₹5 crores, compared to a loss of ₹4 crores in the same period last year. The company maintains its guidance, targeting ₹1,000-1,100 crores in revenue with a profit margin of 16-18% for the year.

A Robust Start to FY '25

Astra Microwave Products Limited reported a strong first quarter for FY '25, marked by significant order bookings and growth in domestic sales. The company recorded a 16% increase in its top line year-on-year, driven primarily by domestic defense services which accounted for 65% of total revenue. The consolidated order book also crossed INR 2,000 crores, reaching INR 2,365 crores, indicating a healthy business trend ahead.

Financial Performance Highlights

The financial performance for Q1 showed an impressive EBITDA margin improvement, rising to 15% from 3.5% the previous year. This was attributed to a favorable mix in product offerings. Additionally, profit after tax was reported at INR 5 crores, a significant turnaround from a loss of INR 4 crores in the same quarter last year. The gross margin stood at 41.8%, signaling a strong improvement in cost management.

Focus on Strategic Growth

Astra's management reiterated its confidence in maintaining an organic growth rate of 18% to 22% for the upcoming fiscal period. The strategy revolves around enhancing the company's capabilities through focused investment in specialized products and a keen emphasis on intellectual property (IP) development. The recently introduced Leap strategy aims to amplify growth prospects and ensure value creation for shareholders.

Order Book and Future Outlook

The company aims for an order intake in the range of INR 1,200 crores to INR 1,300 crores for the current financial year, with revenue expectations between INR 1,000 crores and INR 1,100 crores. The profit margin is anticipated to be between 16% to 18% from a stand-alone basis. Astra's leadership expressed optimistic growth prospects across all operational segments, particularly within the domestic defense market.

Innovation and IP Focus

Astra is prioritizing the development and monetization of its intellectual properties. The management indicated successful engagements in collaborative agreements which are expected to enhance technological capabilities and foster product innovation. They have identified opportunities within existing technologies and are actively working to bring these to market, underscoring a shift towards more value-added offerings.

Challenges and Market Opportunities

Despite some ongoing global supply chain challenges, Astra's management appears confident about their resilience and capacity to scale operations. They emphasized the strategic positioning in the radar and electronic warfare sectors, targeting significant opportunities arising from the Indian government's drive for domestic capabilities through the Aatmanirbhar Bharat initiative.

Conclusion and Investor Insights

In summary, Astra Microwave Products Limited is setting a firm foundation for sustained growth through a solid strategy centered on innovation, efficiency, and responsiveness to market needs. The company's focus on strengthening its order pipeline combined with robust financial performance positions it well for investor consideration. The leadership's confidence in achieving growth targets and expanding profit margins is crucial for potential investors looking at Astra for future opportunities.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Astra Microwave Products Limited Q1 FY '25 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the future performance and involve risks and uncertainties that are difficult to predict.

[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, and good evening, everyone. A warm welcome to all the participants to the post-results call of our company. I'm with my colleagues, Mr. M.V. Reddy and Mr. Atim Kabra, [indiscernible] our Investor Relations advisers. The results and investor's presentation for Q1 are uploaded on our company website and stock exchanges and I hope you had a chance to look at it.

In terms of the highlights, I'm happy to share with you that Q1 FY '24 is a good start to the financial year FY '25. Keeping in mind the seasonality pattern inherent to our business, where in Q1 is the weakest quarter and the major chunk of revenues were captured in the subsequent quarter of the financial year. We want to highlight that we have also improved our gross margin significantly, which were primarily driven by continuous improvement in the product mix where the domestic Defense business contributed to 65% of the top line followed by Exports, whose contribution around 21% and the Space with 11.5% with the rest of the business coming in from meteorology and other sectors. This performance is in line with our expectations and guidance.

Coming to our order book, we have crossed the milestone of INR 2,000 crores mark this time, where the standard stand-alone order book as of June 2024 stood at INR 2,099 crores, and our ordering continues to be healthy. As guided in Q4 earnings call, we have booked about INR 3,002 crores worth of orders in this quarter out of which 240 crores of orders are from Defense industry. On a consolidated basis, our order book stood at INR 2,365 crores as of June 2024.

Overall, our order book comprise of 88% of the domestic orders, which are largely BTS, which enjoys good margins and 12% of export, which is a mix of BTP and BTS business. Our consolidated order book consists of INR 120 crores worth of Service orders, which are typically margin accretive. Our focus remains on getting more orders, which consists of high proportion of complex system projects.

Coming to our stand-alone financial performance for Q4 FY '24. We recorded a growth of 16% in our top line on a year-on-year basis. With a tilting towards the domestic business, our gross margins have [indiscernible] healthy 41.8%, recording a significant improvement on year-on-year basis. The employee expenses have slightly gone up because of the increase in the number of skills and professional employees. This is mainly to our employee addition at our Bangalore facility.

At the end of the quarter, the employee count is close to about 1,537 up from 1,468 at the end of the financial year. EBITDA stood at INR 23 crores as against INR 5 crores in the same period of last year, and the margin stood at 15% as against 3.50% of previous period. The company reported profit after tax of INR 5 crores which was a loss of INR 4 crores at the corresponding period of last year.

The execution of Space orders continues to be good and more than 11% of revenue is coming from this segment. Export sales revenues was also in line with the previous quarter, remaining stable at a reasonable level of 21%. We are confident about the growth in the overall industry as we believe that the government's objective has widened and the implications of the Indian government's Aatmanirbhar Bharat program extends beyond import substitution.

It also provides Indian companies like Astra, which has expertise and engineering talent with a platform on which to build global visibility and businesses. In line with this, we will continue to grow our capabilities strategically and achieve our target step by step.

And lastly, for the current financial year, we maintain our target, which was given previously for an order book in the range of about INR 1,200 crores to INR 1,300 crores, and the top line in the range of INR 1,000 crores to INR 1,100 crores with a profit margin to the tune of about 16% to 18% on a stand-alone basis.

Now, I hand over to Mr. M. V. Reddy, followed by Atim Kabra, to share their thoughts.

[Maram Reddy, executive]

Thank you. Good evening, everyone. As we review first quarter of FY '25, we are happy to say that we've started well with a positive trend, especially considering the orders booked in the first quarter and also opportunities emerging out in that business domain. We have a robust order book of 2,000 [indiscernible] and seeing a good visibility of good trajectory in all verticals of business segments, which are of our prime focus area.

With regard to the business highlights of Q1 FY '25, we have bagged good development and production orders in Radar and Electronic Warfare domain in the first quarter. Out of INR 303 crores order booked, 80% are from domestic segment constitutes of 36% of development contracts in nature and rest of all in production. We made a breakthrough in replacing the imported typical wideband receiver for EW project, which BTS has been using it, a product of foreign make, and the BTS has the production order. Also, we have a bad precision approach Radar and repeat order of Doppler weather radar in this quarter.

Our anti-drone radar is ready for the deployment in the field, and we have been responding RFPs from various agencies. We hope to get a few contracts in the last quarter of FY '25. On the sales front, we had a significant improvement as compared to the last year first quarter, and we don't foresee any major challenges to meet our guidance of INR 1,000 crores to 1,100 crores for the current financial year.

With respect of the current geopolitical situation, our JVC are doing fairly well with the order book of $48 million and expecting to book under $110 million in the next 2 quarters. Mark is expected to book revenue of $37 million to $38 million for FY '25.

We would like to reiterate that going forward, we have a good visibility to maintain sustainable growth with the opportunities emerging in the remaining of our operations. With this brief note, now I hand over to Mr. Atim Kabra to share his thoughts. We would be happy to answer your questions. Thank you.

[Atim Kabra, executive]

Thanks, S.G. Thanks, M. V. And welcome, everybody. In our QIP documents and our ongoing industrial interactions, we have indicated that we believe our growth story is going to be a rear end. And as M.V has just emphasized and as S.G. mentioned, joining order books actually point towards a continuation of this trend and the future looks quite positive. We are very comfortable, as reiterated with our growth guidance of 18% to 22% organic growth, which we have already shared with you.

In addition, as we had mentioned last time, we have created a framework for growth beyond this organic growth and in the form of a Leap strategy. Taken together, organic growth plus Leap creates a momentum for some serious value creation for our shareholders over time. Our focus, we had mentioned about a year back to you, was enhancing our ROEs. And I'm sure you would have noticed that the ROE is around 14% now with a return on capital employed crossing 16%. We are now focusing more on efficient working capital management. And under the [indiscernible] leadership of S.G. Reddy, we are quite confident that we will be managing our working capital definitely without diluting our shareholders for working capital.

I specifically mentioned a long-term time line as research-led products require time to create IP and then time to commercializing the IPs that created. As you very well know, we define ourselves to be in the IP business. We are in the business of creating IP, enhancing our IP and that can be done both to our own internal efforts as well as collaborations. But eventually, we are in the business of monetizing intellectual property. To put it very simply, IP, we believe, gives us sustained power and the moat, which is critical to competitive pricing that shall allow us to stay ahead in a very competitive arena and enable us to monetize our IP on an ongoing basis.

So in today's session, I had a desire to bring into focus our efforts at IP -- IP creation, enhancement and monetization. So if you look back and step back for a second in time and look at the trajectory of growth of Astra, you will notice that the net turnover of the company has increased consistently over the last 4 years to more than INR 1,000 crores this year. If I'm not wrong, we were INR 426 odd crores in FY '20. The entire team at Astra has been scrambling to keep up with the sales growth and meet the enhanced order flows. The focus has been on completing the orders and then focusing on the next set of orders.

So we have embarked on an exercise now and straighting out the IP, which has been created within the company and shared to a large extent, which we can now either monetize on a stand-alone basis or combine it with the other IPs, which may be available within the company or externally available to create value. So, to our surprise, we found that we had multiple products and technologies, which have been created and then not acted upon any further post-order completion and has just been filed away as the teams got busy in fulfilling other orders.

So taken out of cold storage and updated with the current tech standards, we can productize these technologies on their own or combine them with other technologies, and that's a low hanging fruit for us. The incremental efforts at making this step viable and commercial is minimal, and offers us an easy way to monetize our efforts.

This exercise has been concurrent with identifying more project leaders within the company and ensuring that they share the vision which we are defining with you here. And again, I'm glad we took this effort and have identified some serious talent, which resides within the company. The idea is going forward to empower these leaders and groom them into future project leaders with P&L responsibility eventually.

Any organization especially tech and IP-driven organization like ours is only as good as its people. And last 6 months on the senior management time has been spent in identifying talent and working around strategies, which will lay the foundations for sustained future growth delivered by our talented next-generation talent pool.

So these initiatives are hand in glove with our Leap strategy. More project managers with a deep grounding impact -- with a deep grounding in company culture, not only lays the foundation for organic growth, but also helps us think outside the box on a collaborative effort, which underpin our Leap strategy.

I'm glad to inform you that the base pillars of Leap strategy, which were around financial [indiscernible], productization and lean and learn, implying a collaborative approach with external IP holders also is well on its way to deliver results. Glad to share that two definitive binding term sheets have been signed this past quarter alone, one in the area of chip design services and another in the radar space.

While discussions have been initiated with multiple companies, both listed space as well as in the smaller unlisted space for enhanced collaboration with the platform, which Astra provides to further enhance our joint intellectual property and create products which are well suited for the future. We are also in a hurry to monetize things at the fastest possible pace and collaborations are possibly one way to go above than this. We aim to conclude a few such collaborative arrangements every quarter going forward and that is one of the base premises of our Leap strategy.

To conclude, Astra will continue to build on its track record of delivering on its numbers. And we will, in all likelihood, achieve a targeted 18% to 22% organic growth and Leap strategy will -- has the potential to deliver a further upside on to these numbers. The Leap stream work is very much in play and definitive collaborative agreements have been signed with 2 partner companies. Many more are in the works.

We are grooming our next generation of leaders with eventual responsibilities for project management and P&L responsibility will be run through them. And multiple efforts are in place to lay the foundation for a sustained future growth to be led by our next younger generation.

So with this, let's open it up for question and answers, please.

[Operator]

[Operator Instructions] The first question is from the line of Amit Dixit from ICICI Securities Limited.

[Amit Dixit, analyst]

Congratulations for a good set of numbers. I have three questions. The first one is essentially, if I look at not Y-o-Y, but Q-o-Q for mix in revenue, so our domestic percentage has gone up, export has come down, but still we find that EBITDA margin has gone down compared to Q4. So if you could just highlight what caused this whether it is execution of some low-margin orders in this particular quarter? And how do we see this trajectory going ahead?

[S. Reddy, executive]

Yes, Amit, complete your questions.

[Amit Dixit, analyst]

Okay. The second question is on essentially very interesting thing that you highlighted on anti-drone radar. So are we limiting ourself only to radar or there would be a soft kill and hard kill mechanism also? And what kind of opportunity are we seeing by end of, let's say, FY '25?

The third question is that recently there was a media article suggesting that we have executed AAAU for the ship borne radar. So I just wanted to understand the opportunity size of this and when we would be able to commercialize this?

[S. Reddy, executive]

Okay. Amit, I'll take the first question. The remaining two, Mr. M.V. Reddy will take. It is very difficult to pinpoint exactly why this -- I have to really look at each individual product sales that has happened in the corresponding quarters to exactly answer your question. But otherwise, I would say that in general, to a large extent, about 90%, the margin variance comes in only because of the product mix. Specifically, to answer your question, probably I have to dig a little deeper and come back. I will not be able to answer right now.

[Maram Reddy, executive]

Mr. Amit, regarding your second question about the anti-drone system. Yes, we are working on soft kill anti-drone system. But as a part of that, we have completed the radar development portion, and we have released to the market. A few customers are asking for only the radar portion. And also the soft kill system is on the way. I think maybe another few months, we've been in a position to complete development of entire anti-drone system with the jammer. As far as hard kill is concerned, we are exploring that option, but we are yet to decide on the particular portion.

Regarding your third question, as far as the AAAU of SBR, which we bagged from DRDO and executed in the last year. And this year, we are going to commission it in the Navy. Yes, there are good number of opportunities that are there for this. What we heard from the customers and the Navy that they are looking for minimum 2 to 3 more in next 2 years' time frame. So that is what we heard from them. But unless we get from RFP on hand, it's difficult to commit anything on that front.

[Amit Dixit, analyst]

So given the opportunity, the new system that we have ADS and all. So what kind of order inflow could we expect -- not for this year, I mean, but for over the next 3 years, say, if you are -- if you were to give a cumulative number on the basis of platforms we are involved, et cetera.

[Maram Reddy, executive]

Yes. Actually, we have already responding -- responded few RFPs. And the current year, the RFPs, what we have responded are we are expecting to be received the order of at least about INR 500 crores. But since they are in competition, we are not sure how much we are going to grab from that particular segment. But, actually, these 3 inquiries which we are expecting from services, that will have a large size of business. For that, we are getting prepared ourselves to make full complete system.

[Operator]

The next question is from the line of Hiren Ved from Alchemy Capital Management.

[Hiren Ved, analyst]

Yes. My name is Hiren. Mr. Atim Kabra mentioned about the Leap strategy, and I want to extend this a little bit further that given our size, which is just about INR 1,000 crores this year as per our guidance, what stops us from growing at, let's say, 30%, 40%, right? Is it the lack of external opportunity? Or are we too narrowly focusing on radars and certain segments of the defense industry?

And secondly, if -- and it's the right thing to do, which is to invest in IP, but that requires serious capital. So how much money are you planning to spend on IP over the next couple of years? And why can't we aspire to have margins, which are upwards of 20% to 25% if we have our own IP.

[S. Reddy, executive]

I'll answer this. Let me take the IP question first. The IP -- Astra, think of Astra as a platform for a second, right? We have a track record, we have the capability side, we have the marketing ability, et cetera, which has been there and it's only now that we are opening it up from an IP acquisition, IP collaboration kind of -- we spoke about there are products, and personally, I cannot go into details of these products, but there are products which are being contemplated, where, let's say, we have the capability to make the radar, right?

Then can we add in the next logical step, which has to be taken in the battlefield. If an incoming threat is detected by the radar, right? Can my system alone do? I may not have the necessary IP for that. So do I create it from scratch? Do I reinvent the wheel? Or do I collaborate with somebody who has the IP and create a better product and combine our resources and create a product?

It may not necessarily require [indiscernible] capital to do so that way, right? Because it is equally in the interest of the other party also, our collaborators to commercialize the product.

As I mentioned, 2 transactions have been done, they will result in significant IP accretion over a period of time for Astra. We are not really spending much on these acquisitions -- on these IP collaboration if I may say. So I would delink IP from owning the IP exclusively, but we'd rather focus on more collaborative approach, that's contributing a lot towards commercializing and taking the lead in creating products other than, which also links with your earlier question.

We -- if you look at our history, we were quite small, and we will be across -- we will cross INR 1,000 crores in this year itself. And our focus has been to productionize the orders which have been coming in, okay. Productionization of existing orders coming in and keeping pace with the growth in a way did not give us the leeway or the time required or the effort required to productionize -- sorry, to productize. So productionization versus productization okay? Which is our focus going forward?

So if you see organic, when we talk of organic growth, organic growth is coming in from our regular productionization of the order flows, which is coming in. But now, we've given our size and as you have very rightly said, we have the size now, okay, where we can offer ourselves as a platform. And that will allow us to focus on products, which on a recurring basis, when they sell, gives us the kind of margin expansion and sales expansion, which we are looking for. And that's where probably we surprise, which we speak about on account of a Leap strategy will come in.

But let's wait for the time, let the numbers reflect what we are saying. So right now, we focus on, then we'll give you the guidance, we focus on the productionization of the orders. I hope I'm answering your question -- I've answered your questions.

[Hiren Ved, analyst]

Yes. Yes. I have one more last question that we have seen that in many different companies, supply chain is becoming a big constrain. And are we working on being that we are not constrained in terms of productionizing because of supply chain issues and creating enough other sources, if something that we've seen with a lot of other players in the industry side. I just wanted to have your views on how you guys are thinking about this constrain.

[Atim Kabra, executive]

I don't think we are expecting any supply -- serious supply chain constraints. Well, I guess, given the size, given our management focus on the productionization front, I think we are fairly well set in this particular area. Where we see constraints on the evolving technology, where manpower is -- trained manpower is hard to come by -- for the next gen of products where we need the Leap projects.

So to answer your question, we are fairly well appraised of the supply chain challenges, and therefore, resilience is being built into the system. Of course, if you have external events like sanctions and all, that's a completely separate gain. But other than that, we don't significantly see any supply chain challenges.

[Maram Reddy, executive]

Just to add to Mr. Atim. See, basically, we import electronic components and, of course, a few complex PCBs from abroad. But otherwise, the rest all like we will be sourcing out from indigenization thing. And also, I would like to highlight one point here is, we do ourselves with our strategic components as we design and we get it fabricated like MMIC going on. So these are our components which usually will have a serious impact based on the geopolitical situation. So that's something which, in fact, is advantage to us that all these strategic components we have within our control. Otherwise, usually, we don't have any supply chain issues for general electronic components or PCBs.

[Atim Kabra, executive]

Actually, this is a very important point. And when you talk about competition, thirdly, you should consider the fact that we have a very significant net block, which has been created, okay? So the capabilities have been created upfront. And now is the time to reap the benefits from the investments, which have been made over the last so many years into the company. So our return ratios were not looking good because the investments have been made upfront. And now as production scales up, we will see our ratios are -- [indiscernible] right? Our ratios are improving significantly.

[Operator]

[Operator Instructions] The next question is from the line of Col Sarjeet Yadav from Mount Intra Finance Private Limited.

[Sarjeet Yadav, analyst]

One question about this delay. So we are hearing a couple of things that firstly because of the GE engines, that everything is getting delayed. And secondly, also the Israeli company is unable to provide the AESA radar. So we are -- our company has been supplying AAAU for the AESA. So how do we see these twithout situations? It looks like a risk because of the delays, at the same time, opportunity when we see the Israeli company unable to supply. Can you comment on this sir?

[Maram Reddy, executive]

Yes. On the first part of your question, regarding the supply issue of GE engine. Of course, we are not authorized to comment on that. But, yes, we also heard about this. There were the issues. But also, we understand from the customer that they have been making alternate arrangements and I don't think they can put any delay factor as far as other sensors are concerned. In fact, the open radar, whatever being planned is, the discussions are going very actively. And maybe next 3 to 4 months' time frame, we should be in a position to get the first contract.

So there is all the discussions are going on. So we don't see any major delays. But though there may be slight delays incur, but we don't see any major issues as far as that particular part is concerned. The second is regarding the other imported radar, which is not being functioned that also, again, we are not authorized to comment on that. But yes, that is something which the DRDO is trying to push as early as possible to HAL, and probably, we may get more quantity in case if that cannot supply this particular radar.

So, we are geared up. As far as Astra is concerned, we are geared up to produce in numbers. In fact, we enhanced our facility. Recently, we have added [indiscernible] bonding facility by a virtue of which, in fact, our subsystems that is a TR module of those radars, we can produce manyfold in terms of about 20x than what we made it with semi-automatic facility. So that way, we have enhanced our infrastructure, we scaled up our capacity, we geared up to manufacture as many as numbers as they want.

[Operator]

The next question is from the line of Ketan Gandhi from Gandhi Securities and Investments Private Limited.

[Ketan Gandhi, analyst]

Just a two -- couple of questions. One, I just missed, did you give any guidance for the order intake for this year?

[Maram Reddy, executive]

Yes, we have given.

[Ketan Gandhi, analyst]

Can you please repeat? I just missed it. I'm sorry.

[Maram Reddy, executive]

In the range of INR 1,200 crores to INR 1,300 crores.

[Ketan Gandhi, analyst]

Okay. Great. And sir, do you want to share any update on Manpack SDR?

[S. Reddy, executive]

Yes. Actually, the flight -- there is a final test, they are planning to conduct sometime in mid-October. I think it is -- all the procedures have been through. I think mostly by mid-October, we will have a field test. So once after the test, we will come to know who were all will remain in the frame.

[Ketan Gandhi, analyst]

So any final -- I mean, total how many final contenders for this? Last time you mentioned about three. Is it the same or any changes?

[S. Reddy, executive]

Yes. As of now, it's three.

[Operator]

The next question is from the line of Niraj Mansingka from White Pine Investment Management Private Limited.

[Niraj Mansingka, analyst]

Just wanted to know what are the top 5 programs that may -- would be critical for the company for the next two years in terms of order book?

[S. Reddy, executive]

We didn't get you. Can you repeat again, your question?

[Niraj Mansingka, analyst]

My question is, what are the top 5 programs that would be critical for our order book attrition and revenue growth in the next 2 years?

[S. Reddy, executive]

There are many projects as we have been addressing radar and electronic warfare domain, especially if we take in the radar, we have been addressing air-borne radar and also the ground radar, ship-borne radars in all three segments. Like airborne radars, we have been working for AWC Mk1, Mk1A, and also we are waiting for [indiscernible] for Mk2. Similarly, like LCA Mk1A, we are already there, and we will be addressing Mk2. So there are many opportunities that are coming out. Similarly, there is Su-30 opportunities also will come.

Of course, these are all in competition. So we have to wait and see how many we win in that. Similarly, like in the ground segment, there are many radars like [indiscernible] repeat orders. These are all in which our customers [indiscernible] likely to get.

So we will be getting [indiscernible] from those particular segments and shipborne, Navy, as I said, we are likely to get some repeat orders from Navy. So these are all some of the opportunities in as far as the radars are concerned. And in the electronic warfare, we've been working for Jammer for LCA Mk1 and as well as we have been working on the ongoing production programs of the Nayan Shakthi, [indiscernible] Shakthi and all these programs we have there. And also we are there in the EW programs of [indiscernible]. So all these programs, we have some models on hand, and we are likely to get more orders, repeat orders on this from these customers.

[Niraj Mansingka, analyst]

Okay. But anything which comes to your mind that this is like, for example, we have this Uttam. I mean large order that you think you are issued, but just a deal [indiscernible].

[S. Reddy, executive]

Yes. Actually, see the mandate is clear. Yes, air force, I mean like HAL is planning to take some quantity in the first phase. Exact quantity will come to know in a couple of months' time frame. But yes, [indiscernible] has already given clearance for 12 numbers, two for the first phase. And then there afterwards, they will invest more and more. And going forward, yes, there is a -- as you know, all of you know, this [indiscernible] so once they get contract, probably they will start working in that also. So we are hopeful to get more quantity from Mk1 itself.

[Niraj Mansingka, analyst]

Last question. So what is causing a delay in the Virupaksha project?

[S. Reddy, executive]

Yes. Actually, the customer -- DRDO is working on the configuration part. I think what we understand that they are working on this configuration. Once they complete, they will be floating RFPs, and once these are in the competitive mode, so we'll be competing with that.

[Niraj Mansingka, analyst]

Okay. But any thoughts on when you see this scale up?

[S. Reddy, executive]

Scale up for?

[Niraj Mansingka, analyst]

Virupaksha, any thoughts on when you see this?

[S. Reddy, executive]

[indiscernible] contract itself [indiscernible] from the DRDO, I think, probably we are expecting RFPs mostly by next quarter.

[Niraj Mansingka, analyst]

Okay. Last question on the Akash missile. BDL has also put an [indiscernible] manufacturing facility. So -- and what we thought was you were sole suppliers of that. So any comments on how did it impact you?

[S. Reddy, executive]

No. BDL has been [indiscernible] facility and manufacturing is the -- I think it's the -- understand better. I think it is a gimbal seekers. But, no, what we are working is totally different. We are working on [indiscernible] seekers. And in that, we got a few development contracts from DRDO in one particular frequency, then we have already delivered, and we are expecting some small repeat orders also.

And other brand, we are trying to complete it by this month end. So we are working in a totally different technology as far as [indiscernible] is concern. The other technology where BDL and other companies are working on that, those seekers also we have RF components. We have been supplying to [indiscernible] and other companies.

[Operator]

[Operator Instructions] The next question is from the line of Rupesh Tatia from Intel Sense Capital.

[Rupesh Tatia, analyst]

My first question, sir, is, with respect to Uttam radar. So, in this, we only supply antenna units or we supply other components as well?

[S. Reddy, executive]

We supply Antenna Active Array Unit, complete antenna unit. And other parts, there are three more companies who have been supplying a small portion of it. But the 75% of this radar cost is supposed to be antenna unit only.

[Rupesh Tatia, analyst]

And that is exclusively supplied by us?

[S. Reddy, executive]

As of now, yes, we have exclusively right now.

[Rupesh Tatia, analyst]

And sir, I mean, what would be the value for radar package?

[Maram Reddy, executive]

No, I don't want to go more specific into the radar cost and all, because this is an open conversation. I wanted to maintain confidentiality part.

[Rupesh Tatia, analyst]

Okay. And sir, then what would be opportunity size? I mean Uttam will be used in, I think, Tejas from 28 aircraft onwards. And then would it be also used in Sukhoi or near upgrades as well, what is the opportunity size for Uttam radar?

[Maram Reddy, executive]

Well, in fact, we are expecting around close to INR 1,100 crores to INR 1,200 crores worth of business from the Uttam radar in the next 3 to 4 years' time frame.

[Rupesh Tatia, analyst]

But it would be used in all these programs? Or they're just [indiscernible].

[Maram Reddy, executive]

I'm not talking about Sukhoi. Sukhoi is a different one. I'm not talking or discussing about Sukhoi. This is only LCA Mk1 [indiscernible] Phase 2 also, Phase 1 and Phase 2 to put together.

[Rupesh Tatia, analyst]

Okay. Okay. So LCA only, Phase 1 and Phase 2, it is INR 1,100 crores. Okay. And then second question, sir, is that Ashwini radar, are we involved in that program in India?

[Maram Reddy, executive]

Yes, we also bid for that. And we are in competition. And I think [indiscernible] is going up. So we don't want to give you any information. So yes, we have participated in that program.

[Rupesh Tatia, analyst]

So when is the result expected of that tender, Ashwini radar? And then -- I mean what components would we be supplying? And what would be -- I mean, would it be significant to our site, the order size?

[Maram Reddy, executive]

[indiscernible] tender and RFP and in the competitive changes, I do not want to disclose more details about this.

[Rupesh Tatia, analyst]

But we supply all the components or only 1 or 2 components?

[Maram Reddy, executive]

That is what I'm saying. We do not want to discuss anything beyond that. Please appreciate that fact -- this is a competitive tender.

[Rupesh Tatia, analyst]

I see. I see. Also, the next question, sir. I think we have a [indiscernible] with, I think, one of the labs for NETRA primary radar. So -- and I think some order is expected in NETRA or order is received. I'm not clear. So can you maybe talk about what kind of commercial orders are expected in NETRA? And then will we supply only primary radar or some other components as well.

[Maram Reddy, executive]

NETRA, you are talking about Mk1 -- AWC Mk1.

[Rupesh Tatia, analyst]

Yes, yes. Mk1.

[Maram Reddy, executive]

We have supplied subsystems of primary radar and this [indiscernible] supplied in a few years back, and we are getting some repeat contracts for maintenance and also further more [indiscernible]. So we have orders on hand and also, we are likely to get some [indiscernible].

[Rupesh Tatia, analyst]

So NETRA, sir, there is no like active order. I thought there was an order for some 11...

[Maram Reddy, executive]

We've orders and is under execution. In this quarter, in Q2, we are going to execute that.

[Operator]

[Operator Instructions] Next question is from the line of Ravindra Shah from RSH Investments.

[Unknown Analyst]

Sir, I have 2 questions. The first question is, can you please elaborate a bit on your Bangalore facility, like for which business, this facility will be dedicated? Domestic defense, Space or other business segments?

[Maram Reddy, executive]

Originally, we have created the facility for our systems integration and testing, especially in the radar and the electronic warfare domain, and we have built NFDR facility also and also assembly handlers to handle and address the radar systems. And also, we have created a space division in Bangalore facility. We have incorporated 100% subsidiary unit as such space technology is limited, and that group is basically going to address all future satellite requirements. And that is what -- they are also working in the same facility. We have created the infrastructure to make a particular requirements.

[Unknown Analyst]

Okay. Okay. Got it. And what kind of opportunities do we foresee in the global space business on the BTS side?

[Maram Reddy, executive]

Actually, we are focusing more in the Indian market as of today. We would like to address this Indian market and then wanted to address the global market. Yes, opportunities are there. [indiscernible] is very large as far as this segment is concerned. So that is the reason why we are investing into this particular picture. And we are planning to enhance our operations in this particular segment. But to [indiscernible] and all, we don't have as much as far as the global business is concerned, but for Indian, yes, we have a figure, based on that we worked out our business model.

[Operator]

The next question is from the line of Keshav [indiscernible] from BHH Securities Limited.

[Unknown Analyst]

Thank you sir for an excellent set of numbers. Am I audible?

[Maram Reddy, executive]

Yes, yes.

[Unknown Analyst]

Yes. So I just wanted to know about the seasonality of margins and revenues and profits. So we did an EBITDA margin of 15.5% for Q1 of FY '25 versus 2.3% for Q1 of FY '24. And for Q4 of FY '24, we did a margin of 22.8% versus year-on-year margin of 12.2%. So can you comment on the seasonality of margin, sir?

[Maram Reddy, executive]

See, basically, we have used the word seasonality because even as a top line, most of the top line happens in Q3 and Q4. And the margins are directly related to the top line, [indiscernible] of the margins. Then again answering the specific question, in terms of the margins, what you have indicated, which I've already answered earlier. Essentially, it all depends on the product mix. Suppose, if I have a major defense product being sold in a particular period, probably my margins will be much higher than the previous quarter, where the sales would have been more towards exports. So generally, the product -- the margins are directly related to the product mix. And hence, we have the seasonality of the margins is indicated.

[Unknown Analyst]

Got it. Now can you have some band or you cannot predict the bandwidth? Would it be within 15% to 25% is what one could expect or you don't know to pass any comment on this?

[Maram Reddy, executive]

I can give an indicator gross margin. Below that, I do not want to get on. The gross margin generally around 40% to 45% will be there, if my overall defense, I mean the domestic mix is in excess of 70% in a particular period.

[Operator]

[Operator Instructions] The next question is from the line of [indiscernible] Shah from RH Investments.

[Unknown Analyst]

So I have one question. What kind of margins does the Space business comes is, and is it same as the domestic Defense orders? Or is it better than that?

[Maram Reddy, executive]

No more or less, we carry the same margins between Space and Defense.

[Operator]

Thank you very much. Ladies and gentlemen, we will take that as a last question. I would now like to hand the conference over to the management for closing remarks.

[S. Reddy, executive]

Thank you, everyone, for attending and sharing your thoughts. I hope we answered all your questions and look forward to meet you again at the end of Q2. Thank you very much, and good evening. Thank you.

[Atim Kabra, executive]

Thank you guys.

[Operator]

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