AXISCADES Technologies Limited (532395) Earnings Call Transcript

Good evening, everybody. Welcome to AXISCADES Technologies Limited Q1 FY '27 earnings webinar produced by ElevEase. So I'm Shankhini, I'm the Director of Investor Relations at Dickenson, and I'll be moderating our call today. So joining us from the AXISCADES management team is the senior management group. I'll hand over to Mukund later to introduce the members who will be on the call today. To all our participants, please note that this conference is being recorded, and that some statements in this call may be forward-looking based on current expectations and subject to risks that could cause results to differ materially. You can download the AXISCADES investor deck and press release from the company website or the NSE. I'll now hand over to Mukund. He is the Chief Strategy and Growth Officer and Head of IR from the AXISCADES management team. I'll hand over to him for opening remarks. Over to you, Mukund.

Thank you, Shankhini. Good evening, everyone. Welcome to the AXISCADES Q1 FY '27 earnings call. Thank you for joining us today. I hope all of you have had the opportunity to review our results, which have been filed with the exchanges. I'm the Chief Growth and Strategy Officer for AXISCADES and also Head of Investor Relations. On the call today, we have Shashidhar SK, our Group CFO. I also have members of the senior management team across our key business areas: aerospace, defense, electronics, finance operations and strategy. On behalf of the Chairman and Managing Director, I will begin the call. I will then hand over to Shashi, who will take us through the financial performance and the key numbers related to this quarter. I will then call for the business heads to present their respective businesses, and we'll close our formal presentation with our guidance for FY '27. We will then open the floor for questions. [Technical Difficulty] as a safe harbor. [Technical Difficulty] Our Chairman, Dr. SRN -- on behalf of the Chairman, I'll now read out the speech. Our Chairman has requested the management team at the last investor call to take on the role of presenting to investors. So let me just read the speech of the Chairman. Dear shareholders, thank you for sticking with us. Since I've assumed the role since February 2025, our focus has been constant, sharpen the strategic direction, strengthen the execution and rebuild the company position for sustainable high-quality growth. 6 months in, we are firmly on course. 6 quarters in, we're firmly on course: a sharper, more focused portfolio. The divestment of the non-core and services business is largely complete. Only activations remain and there is a [Technical Difficulty]

Looks like we've lost the line. Just give us a moment. We'll get the management group back on line.

Can you hear me now?

Mukund, we can hear you loud and clear. So thanks to all our participants for your patience. Mukund, you can go ahead. And I think maybe restart with our opening remarks. That would be great. Thanks. Mukund, are you on mute? Can you go ahead?

Hi, everyone.

Yes. Go ahead, Mukund.

Shankhini, in the interest of time, should I kind of talk about the financials and by the time, probably this technical issues should have been addressed.

I'm going to say, yes for Shashi. Yes, Shashi, you can go ahead. We'll get this sorted.

Yes. Sorry for that, and good evening again to everyone for joining the AXISCADES Q1 FY '27 earnings call. Dr. SRN and Mukund, of course, will take you through the strategy and the position with respect to the various verticals, especially with respect to the retained business. And my task is to take you through the numbers, what is reported, what sits inside it, and what tells you about the business we are building. So this quarter, we have delivered the highest revenue in the company's history, and we also reported a net loss. This is nothing but the arithmetic of doing 2 things inside the same quarter, divesting one business and building another, while the cost overlap. This is the first quarter of that transition, and it is the quarter in which the cost of transition is most visible and the benefit of it is least visible. The consolidated revenues for the quarter was INR 346 crores, up 42% year-on-year and 27% sequentially, the highest in the company's history. Of the INR 140 crores of revenue that shifted out of FY '26 on supply chain and operational grounds, approximately 40% got converted in Q1, and the balance is planned across Q2 and Q3. The Q1 FY '27 results and the financial statements as what you see is a direct reflection of the treatment of divestment transaction under accounting standard Ind AS 105, where the Engineering Services business being divested to Akkodis is now shown as discontinued operations, splitting the quarter into INR 163 crores of discontinued operations and INR 183 crores of retained or continuing business with comparative periods of Q4 FY '26, Q1 FY '26 and the full year FY '26 are carved out on a like-for-like basis. So just to talk about the retained business or the continuing operations, the one you are now invested in, the business grew and the revenues grew by 94% year-on-year to INR 183 crores from INR 94 crores in Q1 of FY '26. Now coming to the profitability. As an inevitable consequence of the divestment transaction, the company is required to unwind certain balance sheet positions as per Ind AS 105 and has incurred costs with resultant impact on profitability. The reported EBITDA for the combined business of discontinued and continuing operations was INR 27.9 crores, and the reported PAT loss is at INR 14.8 crores against INR 20.9 crores of PAT reported in Q1 of FY '26. The reported loss is nothing but an accounting consequence of the value-creating divestment transaction. Every rupee of that gap is identifiable. Firstly, we took a INR 13.1 crore one-off provision inside the EBITDA line, which essentially is about INR 9.62 crores of receivable provisioning, largely on an aged Defense transaction that we have chosen to provide for conservatively while we continue to pursue recovery with the Ministry of Defense. Plus, we also had to take a INR 3.5 crore hedge provision resulting from the unwinding positions as a result of the divestment and that do not transfer to the divested business. And most importantly, we took a INR 21.81 crores transaction cost in the Q1 pertaining to the divestment which is taken below the EBITDA as an exceptional item, which is roughly half of the estimated INR 45 crores, about 2% of the total transaction value of the divestment. This is -- this will be accrued, and this will record -- the actual divestment transaction will now record an extraordinary gain of approximately INR 1,255 crores on the completion of the divestment transaction in Q2, Q3, essentially, this is a timing issue. Normalized for these items, which is roughly around INR 34-odd crores, essentially about INR 21 crores, INR 21.81 crores of the transaction cost, which is sitting as an exceptional item below the EBITDA line and about INR 13 crores of the provisioning which we took as a result of the transaction and a conservative provision as what we took on the receivables, the normalized for these items, EBITDA was at INR 41 crores at about 11.8% margin, up from 20.5% year-on-year. Normalized PBT was INR 23.1 crores and normalized PAT was INR 20.2 crores. This is the business we actually ran and returned money while paying for its own transformation. Now let me talk about the retained business. And let me be equally direct about what is not yet in and where it needs to be. The retained business of Defense, aerospace manufacturing and XiDA posted INR 8.7 crores of EBITDA, which is INR 18.3 crores when you normalize it for the receivables charge, which sits in the continuing business. The continuing business does not yet cover the INR 8.9 crores of finance cost and INR 8.8 crores of depreciation, which it carries. The divestment has been done on a cash-free and debt-free basis. So the earning business leaves, which is, of course, the aerospace engineering services, the automotive, the energy vertical, and the heavy engineering, when the group's borrowings the corporate cost and the cost of building the replacement still stays in the continuing business. AXISCADES, the listed entity, brings it out very clearly. INR 6.1 crores of revenue, which is the manufacturing aerospace revenue, which we recorded in Q1 against INR 12.9 crores of operating costs and INR 6.4 crores of finance cost, which is, in fact, about 72% of the overall retained finance cost. Closing -- as a result of which the numbers look the way it is looking and closing the divestment on schedule, retiring the debt and deploying the proceeds into capacity is, therefore, our single most important near-term priority. And the discipline is already visible. The employee cost fell from 53% of revenue to 44% of revenue even as we hired for the manufacturing pivot, and Mistral delivered INR 122 crores of revenue at about 14.5% EBITDA margin while absorbing its own provisions. The one clear drag is ADD Solutions, our non-core European unit, which recorded a INR 4.8 crore EBITDA loss and a INR 6.7 crore PAT loss, which sits in the continuing business, effectively constituting most of the continuous business loss of INR 7.04 crores for this quarter. It is loss-making. It is noncore, and it will be exited and action plan is already underway with closure targeted by Q4 of FY '27. Cash on the balance sheet, meanwhile, rose 78% to INR 81 crores ahead of the first tranche of divestment money and the property, plant and equipment rose by INR 40 crores in 1 quarter as capacity is built on the ground for the Power 930 ramp-up. The Akkodis transaction is valued at $237 million or approximately INR 2,256 crores, which the shareholders have blessed on the July 27 and is in the process of closing in 2 phases. Phase 1 is targeted by 31st August, which is this month, with about INR 190 crores of post-tax cash coming in and Phase 2 by 30th November, bringing a further INR 525 crores in cash. It funds the Power 930 vision and our planned acquisitions without any equity dilution. During the quarter, the Defense business in the continuing business category delivered a record INR 125 crores in revenue, up 112% with an underlying EBITDA of INR 13 crores, which is up 15% year-on-year. And 8 design wins and order wins since April took the assured forecast visibility to INR 4,500 crores plus to be executed in the coming quarters and years. XiDA was the strongest stream, INR 49.5 crores, up 63% year-on-year in terms of revenue at a 33% EBITDA margin, and it added 2 marquee global technology customers as customer logos. Aerospace manufacturing capabilities are being built bit by bit, both in terms of talent and aerospace capabilities and certifications through planned acquisitions. To return to where I began, this quarter's reported loss is the cost of running 2 companies inside 1 set of accounts. Every element of it is identified, quantified, and either is behind us or scheduled to close within the next quarter. The business we are building on to Power 930 earned a normalized EBITDA of INR 18.3 crores despite carrying the strategic costs, which I talked about in terms of the manufacturing pivot, which is taking place, which are still to turn into revenue on a platform that grew 95% year-on-year with about INR 4,500 crores plus of assured Defense visibility and INR 1,255 crores of gain on divestment still to be recorded in the profit and loss statement. In closing, I will say the results declared are expensive for a quarter, but will compound for the next 40 quarters. Thank you. Now Mukund, of course, I've dealt with all of this. I would now hand over to Mukund to take this forward.

Thank you very much, Shashi, and thanks for stepping in. Apologies to everyone on the call. We had a technical issue at the -- just checking if everyone can hear us clearly. Yes. Apologies that we seem to have had a technical issue at our end. However, thank you, Shashi, for stepping in and for covering the aspects that I wanted to cover. Let me now move on forward from here. I'll cover the continuing operations, which, as you know, is a business that will define the future of AXISCADES. This business has performed very strongly this quarter. We have had a continuing revenue of INR 180.7 crores. This includes our Defense business, and this includes our ESAI business, and this includes the Aerospace business. It excludes the businesses that are being divested away, both Engineering Services as well as Aerospace Services. It also excludes ADD Solutions, the business that Shashi has already referred to, where we will be finding a solution in terms of divesting that by the end of this financial year. Defense, before I hand over to each of the Defense, ESAI, XiDA and the Aerospace business heads, let me just give you a broad overview of how the business has performed in this quarter. Defense, over 111% year-on-year growth. Clearly, this is over 2/3 of our continuing revenue as of this quarter. Our reported EBITDA was weaker at INR 2.6 crores. And this was because of certain one-time costs that we had to absorb of about INR 9.6 crores this year -- this quarter. The underlying EBITDA is at INR 11.2 crores, a 9.7% margin -- a 9.7% margin. And further on Defense, in terms of our wins, in terms of our -- what else we have looking forward, I'll hand over to the Defense business soon. The ESAI business, the ESAI business, as you know, has been now rebranded as XiDA. What we have done is headquartered this out of the United States because that is where our customers are, that is where the technology is, that's where the capital is, and that's where the resources are. Clearly, this business has performed wonderfully with the new domiciling of the business. Revenues were at INR 49.5 crores with EBITDA at INR 14.7 crores of EBITDA, giving an EBITDA percentage of almost 30%. Where did this come from? This came from a business transfer that we acquired the business of another partner, and that contributed a stupendously high 46% EBITDA margin, clearly giving us a 30% EBITDA margin combined with the legacy business that we do in the XiDA business. Aerospace, which is our upcoming manufacturing business, post exiting the servicing business, manufacturing now becomes the future of the Aerospace business. Even before we have actually added capacity, we already have a team in place. We have invested well-ahead in terms of leadership and in terms of having the right people, and that has already shown in terms of a INR 6 crore revenue for this quarter. EBITDA being negative, which reflects the investment that we made into this business going forward. So to close, before I hand over to the Defense business, clearly, 2 streams chugging on a full steam and very, very profitable. One funded out, while the other one, the Aerospace business yet to show over the next few quarters. Over to you, Babu. Thank you.

Thank you, Mukundan. This is Sharadhi Babu, I'm Head of Defense. I will handle the presentation for both Defense and XiDA today. And as Mukund mentioned, the Defense this quarter has recorded a very strong growth quarter-on-quarter and year-on-year. And I would like to update the audience that we had several wins, and we have added quite significant pipeline to our forecast visibility. And here, number one, on the technology side, our Defense, we have moved on, on both our strategic initiatives, which includes our presence in directed energy weapons and missile systems. So we have been technically selected and approved for the transfer of technology for 30-kilowatt laser directed energy weapon. And we have received orders from -- on the missile systems, which includes the subsystems, the electronic subsystems and also certain select high-end mechanical subsystems. Here, we are developing and developing a mobile firing platform and also a mobile mast system for the long-range missile system. And we have been now -- we have received the development order production order for the onboard electronics on -- for the anti-tank missile and also on the BrahMos missile. And we have also received orders for the EWS for the helicopters and also the antenna beam control systems for the Uttam radar. And with all these wins, we have added the forecast visibility about INR 332 crores. Overall, our visibility stands now at -- assured forecast visibility stands at INR 4,557 crores. Any further questions, I would be glad to answer at the end of the session. I will also cover the XiDA business, which is -- which Mukund has given the financials. Here, I'm very glad to inform the audience that we have added 2 of the world's largest technology companies as customers. This business transfer, which Mukund has mentioned. So we have now -- based on our legacy ESAI business, we are now supplying the most modern and innovative semiconductor equipment for the largest of the customers. One of them is semiconductor equipment manufacturer and the other one is the world's largest AI and hyperscale technology company. And here -- and already, this is visible in the current quarter, and it is poised for a strong growth quarter-on-quarter. And this platform is held through the wholly-owned U.S. company and which is giving us the complete customer proximity and also the engineering talent and the India is the mirror architecture for supplying of the equipment. So this -- and this arrangement also gives us a strong visibility on new customer portfolio, which will be -- which we will be serving over the next few quarters and which is based out of the U.S. And again, here on the XiDA, I'll be glad to answer any further questions. Now I'll hand over the mic to Mohan, who will brief you on the Aerospace business. Thank you, all.

Good evening, everyone. This is Mohan. Let me turn to Aerospace. Our manufacturing story is now becoming real. We have signed a non-binding offer for AS9100 certified precision manufacturing company. Our due diligence is in the advanced stages of completion and is expected to complete in Q2. This transaction when completed on an annualized basis, the FY '27 revenue would be about INR 180 crores with an EBITDA of INR 39 crores and with a 22% margin. This single transaction jumps our aerospace manufacturing capability and becomes the metallic manufacturing backbone for our Defense and Electronic businesses. And we are not building this in isolation. We are building a world-class infrastructure around it. The center for advanced manufacturing, 240,000 square feet on a 20 acres at Devanahalli, designed as a quad-use facility for aerospace, defense, space, and electronics, 1 campus and 4 growth engines. You would have noticed aerospace manufacturing revenue clocking at INR 6.1 crores in Q1. We have built a team in advance to make it happen. We have put a 30-member aerospace leadership team in place ahead of the acquisition and ahead of the revenue because aerospace qualification runs in years, not quarters. We are front-loading the team so that when the acquisition closes, we execute from day 1 instead of spending a year building capability, we could have built today. Put together this acquisition, we are currently evaluating a second transaction. And together with an organic growth, we are targeting an annualized run rate worth of INR 375 crores in revenue and INR 84 crores in EBITDA by Q4 FY '27. With this, we would have replaced the lost EBITDA due to the divested business. And the platform we are building here is the one that takes towards INR 1,000 crores by FY '29. And our approach is invest ahead of the curve and leverage the opportunity. We shall share further excitement in the next quarter call. Thank you. I'll pass on to Mukund.

Thank you, everyone. Thanks, Mohan. An update on where we stand on our infrastructure. As you're very well aware, we have the DAL, the Devanahalli Aero Land Complex, which has been commissioned and on schedule. We have moved our existing supply chain and logistics capability set up. We also have set up testing labs. We have set up SMT lines, and this facility is fully functional. Many of you have visited this facility at various points over the last year and have seen how it has developed over the last 18 months or so. We also have the Devanahalli Atmanirbhar Complex, which is a 20-acre plot just a stone throw away from DAL and very close to the Bangalore International Airport. This is going to be a flagship Aerospace and Defense and Space manufacturing hub. It also -- we have started building the satellite manufacturing, assembly, integration and testing facility for the Space business. The third complex that you've been hearing about is the Missile Atmanirbhar Complex. This is in Hyderabad. The land had been acquired this quarter, we had actually done the groundbreaking in early July of this year. Construction has begun on this complex. This complex will support missile subsystems as well as strategic electronics. The location in Hyderabad is deliberate. This fits very well within the missile ecosystem that is being developed in that city. The new facility that we are setting up, which Mohan had referred to in the aerospace coverage, is a center for advanced manufacturing, again, in Devanahalli. The land allocation is well in progress. We -- it's a 240,000 square foot and 20 acres of land. And this is just a few kilometers away from DAC and DAL. This will house manufacturing capabilities, not just for the aerospace business, but for all the other 3 businesses having a common platform servicing 4 businesses. Let me now move on to the guidance. As you know, ever since this new management has been in place, we have made several commitments to the markets. We have committed and we have delivered against each of the commitments. Most important of the commitments was the fact that we would grow into a manufacturing and a product and solutions company while divesting our services portfolio. And we do all this without actually -- without any equity dilution or any material long-term debt. The divestments are well underway. We have divested -- as you are aware, we have divested the Engineering Services business in the month of May and the Aerospace Services business in the month of June. Both of these are progressing well towards closing. We expect to close the Engineering Services divestment in this quarter itself with the money coming in a week later. We will expect to close the Aerospace Services business in the next quarter with, again, the proceeds coming in shortly after that. Both of these would give us almost INR 920 crores of proceeds, proceeds that we'll be using for our manufacturing acquisition build-out. More importantly, what happens to the revenue that we have divested away? We clearly have committed to replacing these revenues, both organically as well as inorganically. Organic revenue growth will happen through the kind of growth that you have seen already on the Defense and ESAI businesses. Inorganic growth would happen through acquisitions, one of which Mohan already referred to, several more that are in the pipeline and are likely to close this quarter. We are committing back to our guidance that we had made originally at the beginning of this financial year, which is at INR 1,377 crores revenue in FY '27 on a continuing operations on an annualized pro forma basis. EBITDA, the EBITDA that we have divested away, as Mohan has clearly referred, is being brought back at a price that is at a fraction of what we sold it for. The acquisition in the aerospace, as well as the organic growth, as well as further acquisitions in the XiDA business will help us bring back this EBITDA by FY '27 on a normalized pro forma basis. So both on revenue, EBITDA as well as earnings per share, we are well on-track towards achieving our Power 930 goals. We have committed to several specific activities that we'll be doing over the next 3 quarters. One of them that I already referred to is closing the divestment across the next 2 quarters. The other is, as you're aware, we had deferred certain revenues due to supply chain logistics. We are well on-track to have recovering that. This quarter, out of INR 142 crore deferral, we had recovered over INR 60 crores, and we'll be recovering the rest over the next 2 quarters. Acquisitions, again, well on-track. We are committed to delivering on the Aerospace acquisition by this quarter and a XiDA acquisition by this quarter with closings within this quarter and early next quarter. We have several more in the pipeline, and we expect the third and the fourth to close within the next 2 quarters. ADD Solutions, which you know is a business that has been a drag on our businesses across the last 5, 6 quarters, we are working towards a sale, which could realize over the course of FY '27. On the Space business, which is a fledgling business, as I've already mentioned, we have already set up and are working on the manufacturing and the integration and the testing facilities as part of our new DAC complex. We will also be entering into strategic partnerships, and we'll announce these partnerships during the course of this quarter, both at the Bangalore Space Expo as well as the World Space Business Week in Paris. And finally, scaling up of our businesses. We expect our Defense businesses on the back of an extremely strong 4,500-plus assured forecast visibility to grow at over 75% year-on-year over the next several years. We also expect our ESAI business to grow by over 100% this year on the back of both organic growth as well as acquisitions and business partnerships we have in place. This is a commitment that we are making to our shareholders, and we believe that each of these commitments is something that we will be able to deliver to in the time lines indicated. Thank you very much. That brings a close to my presentation. I will now hand over back to Shankhini, who will then open up the floor for Q&A.

[Operator Instructions] We'll take the first question from Deepak Poddar.

Sir, just first, I wanted to understand what is the thought process behind this Aerospace division divestment? It's kind of giving you INR 70 crores, INR 80 crores kind of EBITDA on an annual basis. So I understand that you have aspiration for aerospace manufacturing, right? But can't we have done it both together? And so, what would be the thought process behind that?

I'll probably answer the question also. I'll ask Mohan to pitch in as and when required. Clearly, for us, in the 4 core areas that we focus on is Aerospace, Defense, the XiDA business, which is electronic semiconductors AI and the Space business. But we also had clearly indicated that a part of our Power 930 program, we would move from being a services-focused company to being a product and solutions company. And it is this path that we have set out on. As part of this Power 930 goal, we had indicated, obviously, a sale of the Engineering Services business, but we also felt it was the right time to be actually moving away from Aerospace Services into aerospace manufacturing. We had indicated the reasons why we had done that at the previous call that we had in the previous quarter. But let me again clarify on those aspects. One, we do see many of our services OEMs looking for consolidation in this market. So the option for us is really to grow further by acquiring other businesses, other businesses in the same services area or by selling to a global leader, we will be able to take this business and grow it further. Why did we choose the latter? Because we found the price that which we could offer the latter as well as the deployment of the proceeds from that into our core Power 930 vision would enable us to do that without any incremental equity dilution. Mohan, would you like to add anything more on this?

Absolutely. So the value that we are able to generate by this is what is a differentiator, number one. Number two, the manufacturing aspect, which you also asked, is more of a sticky business. So we are getting into long-term contracts a highly predictable business, and that is actually leveraging some of the activities that we are doing in Defense, Space, and Electronics. So it means that we are able to consolidate and leverage all of our business verticals and provide a total end-to-end solution to our customers. I hope we have answered your question.

Yes, you have answered. So couldn't we have done it both simultaneously? I wouldn't that be an option?

Being a hypothetical question, yes. But when we look at the strategy, the idea was to grow more into a product-based business. So hence, the decision is purely based on that.

Okay. Okay. Understood. And regarding the provisions that you mentioned about, I mean, INR 22 crores, I mean, where are this accounted? INR 10 crores is the provision for receivables, INR 3.5 crores for hedge and INR 22 crores for deal costs. Where has been this accounted in this financials?

Shashi, can I hand it over to you?

Yes. So if you look at the financial statements as what has been filed, the INR 21 crores of the transaction-related cost is sitting in discontinued operations as an exceptional item. It does not come out specifically on the face of it. If you go to the notes to accounts, you'll be able to find that. And with respect to the provisions which I'm talking about, which is about INR 6.5 crores for a provision with respect to an order which we executed for the Ministry of Defense and another INR 3.14 crores for a Defense PSU. And then the unwinding of the hedge provision of INR 3.5 crores is actually sitting in the continuing business, which is a part of the other expenses, which you see here in the continuing operations.

We'll take the next question from the line of Koushik Mohan.

This is Koushik. I just wanted to understand what will be our number as come to the PAT level? Because I can understand on the EBITDA level on side. But can you give a clarity on the PAT level?

You're talking about the normalized PAT?

Yes, normalized PAT. With INR 1,377 crore top line this year closing is what we are talking about, I just wanted to understand what will be our PAT.

You're talking about the quarter 1...

Guidance for the FY '27.

Can I take it?

Yes, yes, please.

Yes. So as you have indicated, we'll be replacing the EBITDA through both organic growth and inorganic acquisitions. We have indicated an EBITDA of INR 270 crores. We expect PAT to be broadly around about 50% of that number. It could be higher because we'll actually have a less -- we'll have proceeds from the divestment that will be available to us that will help us pay down some of our debt and reduce our interest cost.

So we are talking about INR 135 crores as our PAT, am I right?

Broadly around those regions, yes.

Okay. So we have a lot of acquisitions and a lot of disinvestment of the business are going on, right? So this number will be not impacted. So I can think that Q2, Q3, Q4 will be ramping up and these numbers will be coming at you, right? Is what my understanding right?

That's correct. We expect the acquisitions to kick in over the next few quarters, which will actually contribute to the top line and the bottom line.

Perfect. And my second question, I just wanted to understand what is the update on the acquisition side? I can understand in the Q3, we'll be having one settlement of the money. And Q1 this year -- this quarter, we'll be having one settlement of the money. With that, we are going for an acquisition. What will be our acquisition status? Here in the presentation, it is not mentioned very clearly for me. Can you give the updates, like, by this is the time that we hire in the line.

Yes. It is covered in the multiple slides. One, of course, I'll cover from an aerospace perspective. The aerospace, we are talking in Q2 and which is coming out very clearly in my slide. So we will be completing the -- it's already NBOs issued and we are in the advanced DD phase. Our expectation is that we will complete the activity by -- before the end of Q2. And we also have one more, which we are evaluating. And if it -- if everything goes as per our plan, that also we should be completing it by Q4. So these are the 2 opportunities that we are pursuing in aerospace.

Maybe I can just cover on the XiDA side. On the XiDA, as you know, we are already underway with the business transfer agreement. And the business will -- as an acquisition will happen to us by this quarter. Again, we are committing to doing that with this quarter. So we'll have 2 acquisitions in place, generating revenues and generating bottom line by the end of this quarter. We do have a few other acquisitions, which we cannot disclose at this stage because they're still in the non-binding stage. As we get to a binding agreement and Board approvals, we will come back to the market and announce those acquisitions.

Okay. And just on a clarity basis.

Sorry, I can just clarify -- I can just also clarify the Q3 and Q4 as we have clearly committed in our guidance, we will have one of those coming into Q3 and coming into Q4.

Perfect. I just want another clarity. How about our next year is looking like? Because a lot of things are happening this year. I can understand this is the transforming stage of the year for the entire life of what we are talking about FY 2030 top line of the guidance. So how is the next year looking like? Do we have this kind of replica effects in next year also or this is the year that everything will be settled properly?

When you say I think we settled properly, you're talking about the cost...

As well as employees and everything, whatever we have everything here.

A majority of our acquisitions will be in place by the end of this financial year, which -- and they start generating revenues and EBITDA for us. We will continue scouting the market for acquisitions. And why are we looking for acquisitions? Because we do see very interesting opportunities where we can quickly scale up in terms of capabilities, in terms of customer access and in terms of getting in a specific order book or a specific certification that an existing target already has. So we will be in the market for it, but these acquisitions will be much smaller in scale compared to what we're doing this year.

We'll take the next question from the line of [ Prafull Rai ].

I have two questions. One is on the Defense order, which is of INR 4,500-odd crores. I wanted to get a sense of what is the time line for execution of this order? Can you give a broad time frame that this is the end number of years in which you are going to do that? That is question one. Second question is, what is the Defense order pitch pipeline we have? If you have a target of the order intake for the year as a whole? These are the 2 questions I have.

I think first one, to answer your question, we are covering this entire forecast visibility before FY '30, which is approximately about 3 years, there could be some spillover in the fourth year. And to address the second question, I think Mukund already gave the FY '27 guidance. So we have that well in place.

You see because this...

Just to clarify, it's a 75% revenue increase year-on-year in FY '27 in Defense.

Okay. 75% year-on, but this is a finite time frame order. So you'll have a very strong growth for next year also.

Absolutely.

And my second question was on the pipeline of Defense. Can you throw some light in terms of what is the kind of pipeline we are building because we are adding capacities to just get a sense of what kind of size of business we are expecting in addition to what we already have.

The pipeline is quite huge. As you know, we are covering the pipeline across the unmanned systems, the missiles and also the radar and EW are our core area. We have almost the visibility that we have is exceeding about INR 24,000 crores. But that is a huge pipeline, which actually converges into the forecast visibility, which we have stated.

Last question, this INR 930 crores, the target which we have, we have been stating that for a while. Given the restructuring of the business we are doing, are we still maintaining that objective or there is a change in the...

I will let Mukund answer that.

Power 930 objective was in terms of -- had several components to it. One was in terms of a focus on certain sectors, which we are well on-track on. Other was in terms of moving us from being a services to a manufacturing company, which we are well on-track on. You can see that happening right now. And the third, of course, was the revenue targets as well as the PAT targets. We did at the time of formulating Power 930 said today's revenue will be tomorrow's PAT. And that was the FY '24 revenue of INR 960 crores, which we believe will be the PAT target by FY '30 of INR 960 crores. We believe all these acquisitions, these divestments, the capital that's come in and the growth that we have in the organic business will help us achieve those targets. So our Power 930 targets remain still absolutely firm.

If time permit, can I ask one more question?

Yes, go ahead.