Astra Microwave expects its JVs to take off next year
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Hyderabad: Astra Microwave Products Ltd, a maker of subsystems used in the defence and telecommunication sectors, is expecting a pair of joint ventures to take off in the next financial year, which will help it earn an additional Rs.1,800 crore in revenue over five years.
One of the ventures is with Israel’s Rafael Advanced Defense Systems Ltd for joint production and supply of tactical radio communication, electronic warfare and signal intelligence systems. This venture is awaiting clearance by the ministry of defence.
The second is with Canada’s Unique Broadband Systems Ltd for ultra high frequency broadcasting, satellite uplinking and medical imaging products.
“The Canadian JV business will start from FY18 onwards and we expect to have at least Rs.300 crore of turnover from this JV in the next five years. Similarly, Rafael JV revenues will start from next fiscal year, if we complete all the formalities this year. So in the next five years, we have the prospects for about Rs.1,500 crore,” M.V. Reddy, director of operations & business development, Astra Microwave, said in a conference call on 30 April.
The company has projected sales of Rs.450 crore this year (FY17) against Rs.500 crore it had earlier hoped to achieve on the back of export targets.
Almost 80% of the company’s orders come from the defence sector. The Indian government’s Make in India programme is meant to encourage manufacturing in the sector, but building capacities and completing projects remains time-consuming.
“So we had planned some sales in this year but because of the delay in the order of the business we had expected, we will be shifting to the next year. So this year we will have only Rs.450 crore in sales,” said B. Malla Reddy, managing director, Astra Microwave, in a 30 April conference call.
The FY18 sales could then be Rs.550 crore. In FY16, the company’s revenue was Rs.420 crore.
The company, along with Bharat Electronics Ltd, is also finalizing the terms of the light combat aircraft project for the Defence Research Development Organisation (DRDO). This involves making AESA (Active Electronically Scanned Array) radars.
“In the first phase probably they (DRDO) are planning around close to 100 numbers, so initially we will be doing some 2-2 numbers (half) each; BEL and Astra. This is something which is in the discussion stage, it is not finalized yet,” Malla Reddy said.