CENTUM - Centum Electronics Ltd Share Price

Question 1: "So, when are we going to see our subsidiary become EBITDA positive?"

Answer: Thank you, Nishita. Redeeming subsidiary losses is a high priority. We are finalizing the divestment of our Canada operations, which contributed significantly to these losses. By the end of Q4, we aim to have a clear direction. The European operations are under review since the current macroeconomic conditions are unfavorable. We aim to minimize subsidiary impacts on overall results in the next financial year.

Question 2: "If you would like to give any revenue guidance and margin guidance for FY26 and FY27, that would be great."

Answer: We target 30% revenue growth for FY26, with standalone performance likely driving this growth. On the EBITDA margin front, we expect it to range between 13% to 15%. Standalone growth has been strong, and we anticipate a robust second half to support this guidance.

Question 3: "Can you just give an outlook for the BTS business over the next two, three years?"

Answer: We remain confident about our BTS business. We expect a strong order influx in Q3 and Q4, potentially closing the year at a healthy pace. Over the next three years, we're aiming for a bit over INR 2,000 crores in order bookings, supported by our strong current pipeline.

Question 4: "What are we trying with the Canada business? What options are we considering?"

Answer: We're evaluating a couple of options for Canada. One involves discussions with a third party showing interest in the business. If that doesn't proceed, we may consider a court-assisted exit. A decision is expected within the next month or two.

Question 5: "Is there any update on inventory levels and why it's risen?"

Answer: The inventory increase is primarily due to fulfilling existing orders. We see this as a precursor to expected revenue ramp-up in the second half of FY26. Inventory is obtained against firm orders or customer forecasts, not speculative purchases.

Question 6: "Can you provide an overview of opportunities for the space-based surveillance program?"

Answer: We've identified around INR 1,000 crores in addressable opportunities within space-based surveillance. While we might not capture all of it, we anticipate securing orders this financial year in this domain as we pursue ongoing projects.

Question 7: "What is our order pipeline for the European business?"

Answer: Unfortunately, the demand uptick hasn't occurred as expected in Europe. We face delays in new projects, which are critical for our engineering services. We're monitoring this closely and review strategic options as we explore improving our situation amid intense competition and macroeconomic challenges.

Question 8: "What's the guidance for the second half regarding the losses from the European subsidiary?"

Answer: While I can't provide precise numbers, we expect improvements in the second half. The losses from our European operations should decrease as we fulfill orders, enhancing operational efficiency and managing liquidity better. Overall, we don't expect a profit, but losses will be reduced from the first half.

Question 9: "What is the order book size for the BTS and EMS businesses?"

Answer: For BTS, our current order book stands at approximately INR 650 crores. Regarding EMS, the order book is reported at around INR 763 crores. Both reflect a healthy pipeline for the near future.

Question 10: "Are you exploring opportunities with other shipbuilders beyond your GRSE partnership?"

Answer: Yes, our partnership with GRSE focuses on military navigation systems, which represents a notable opportunity, potentially valued around INR 500-600 crores over five years. We are open to exploring additional collaborations within the shipbuilding sector as it aligns with our strategic goals.