Synopsis: A defence-focused electronics manufacturer closed FY26 with a record order book, a marquee radar win from a state-owned aerospace major, and sharply improved standalone profitability. A strategic exit from loss-making overseas units and rising foreign institutional interest add further context to the story.
Indian defence electronics has quietly become one of the more compelling investment themes on the back of Make in India, indigenisation pushes, and rising export ambitions. Companies that have spent decades building certifications and trust with strategic customers are now seeing that patience convert into order books and margins. One such company’s latest annual numbers offer a good look at how that shift is playing out.
With a market capitalization of roughly ₹5,284 crore, the shares of Centum Electronics Limited were trading near ₹3,580 apiece, with a 52-week range of ₹3,916 to ₹2,044.20, and they are trading at a P/E of approximately 52x.
Order Book Signals Strong Visibility
The company closed FY26 with a standalone order book of approximately ₹1,645 crore, up around 23% year-on-year, giving it healthy revenue visibility heading into FY27. Within this, the Build-to-Specification (BTS) segment, which serves defence, aerospace, and space customers, carried an order book of close to ₹800 crore, even as fresh order inflows for the year came in lower than some analysts expected due to timing delays in program approvals.
Management has flagged that a chunk of orders worth ₹100-150 crore that were expected in FY26 have simply spilled over into the current fiscal, and it continues to guide toward medium-term revenue growth of 25-30% at the standalone level.
A Marquee Radar Win From HAL
The standout development of the year was securing an AESA radar program from Hindustan Aeronautics Limited for the UHM platform, with a total opportunity size exceeding ₹570 crore over the life of the project. The order is structured in two phases, a development phase worth roughly ₹66-67 crore to be executed over two years, followed by a much larger production phase worth over ₹500 crore running out to FY30-31.
The company also won its second complete radar system order, this time for satellite and space debris tracking applications, a long-range, high-power radar that management describes as complementary to the airborne UHM program. Together, these wins deepen the company’s positioning in systems-level defence electronics rather than just component supply.
Exposure Across High-Growth Sectors
The business operates through two engines, Build-to-Specification and Electronics Manufacturing Services (EMS), spanning defence, aerospace, space, semiconductor equipment, industrial electronics, and electrification. The BTS segment grew standalone revenue by 37% year-on-year in FY26, driven by execution across space payloads, radar subsystems, and land and missile programs.
The EMS business grew 21% year-on-year, supported by a ramp-up with a global semiconductor equipment customer along with new wins in industrial electronics, electrification, and grid automation. Margin profiles differ meaningfully between the two, BTS typically runs at an EBITDA margin north of 20%, while EMS, being largely cost-plus contract manufacturing, tends to stay in the 9-11% range.
Financial Snapshot & Business Overview
On a consolidated basis, revenue for FY26 stood at ₹953 crore, up 29% year-on-year, with EBITDA at ₹135 crore, up 37%, translating to a margin of 14.22%. Profit before tax from continuing operations grew 73% to ₹115 crore, while profit after tax from continuing operations roughly doubled to ₹101 crore, with diluted EPS from continuing operations coming in at ₹68.19.
Once the loss from discontinued operations, largely the Canadian and French subsidiaries under restructuring, is factored in, the overall reported consolidated profit after tax slipped into a loss of around ₹52 crore for the year.
Management has been clear that this is a legacy drag rather than a reflection of the core business, since the continuing operations more than doubled their profitability. Balance sheet metrics improved as well, with total debt to equity at a comfortable 0.28x, working capital days improving to 142 from 159 a year earlier, and adjusted return on capital employed rising sharply to 21.16% from 12.40%, pointing to a business that’s not just growing but also getting more efficient with the capital it deploys.
Cleaning Up the Overseas Book
A large part of the profitability story this year has been about what the company chose to walk away from. Its Canadian operations were discontinued during the fourth quarter, and its French subsidiary entered a court-supervised legal restructuring process, with management not expecting any material cash realisation from the eventual sale.
Importantly, the balance sheet already carries liabilities from these units well in excess of their assets, so management does not anticipate further meaningful exceptional charges from this process going forward. The stated intent behind the move is straightforward: the overseas units had been dragging down both revenue growth and margins at the group level for years, masking a standalone India business that had been compounding steadily.
Rising Institutional Interest
Shareholding data also points to growing confidence from institutional investors. Foreign institutional investor holding rose from under 1% in late 2023 to 3.31% by June 2026. Since last quarter, only the FII has increased their stake by roughly 1%, while domestic institutional holdings climbed from under 8% to nearly 20% over the same period.
Between a fatter order book, a headline-grabbing radar win, and a cleaner balance sheet post the overseas exit, the pieces for a sharper India-focused growth story are visibly in place. Whether execution on the newer defence programs keeps pace with the order momentum, and whether margins can climb back toward the company’s own 13-15% guidance band, will likely decide how the next few quarters are read by the market.
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