During Monday’s trading session, the shares of a leading technology solutions provider surged nearly 9.8 percent to Rs. 487.3 on BSE, after the company announced the restructuring of its defence and aerospace business.
With a market cap of Rs. 2,053 crores, at 12:26 p.m., the shares of Axiscades Technologies Limited (ACTL) were trading in the green at Rs. 484.7, up by nearly 9.2 percent, as against its previous closing price of Rs. 443.7.
What’s the news:
Axiscades Technologies Limited (ACTL) announced a strategic restructuring initiative to enhance the business operations of its Defence-focused subsidiaries, Mistral Solutions Pvt. Ltd. and Axiscades Aerospace & Technologies Pvt. Ltd. (ACAT).
Restructuring of ACAT:
According to the latest regulatory filings with the stock exchanges, ACTL completed its acquisition of Mistral in 2022.
As a result, ACTL now oversees two defence-focused entities: ACAT, a 100% defence pure-play company, and Mistral Solutions, which operates with a 60% focus on defence and 40% on semiconductors.
The ACTL Board has decided to restructure both ACAT and Mistral, including leadership realignments, to take advantage of commercial and technological synergies, expand and reposition Mistral’s semiconductor business, and enhance operational efficiencies.
The restructuring process, initiated in Q3 FY25, is expected to conclude by Q4 FY25.
During this transition, ACAT’s operations will be integrated with Mistral. However, ACAT will remain a separate entity to retain its Defense Industrial License and other critical defence OEM contracts until all components of ACAT are fully integrated into Mistral.
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Restructuring of Mistral:
The restructuring aims to position Mistral as a key global player in the defence and AI-powered hypergrowth sectors, with a business split of 60% defence and 40% hypergrowth, driven by the increasing demand for its semiconductor expertise.
Mistral will follow a three-pronged strategy to expand its footprint in the defence and aerospace markets:
(i) Program Expansion: Increase the number of defence programs and boost revenue per program (RPP), primarily through DRDO, Defence PSUs, or Tier-1s.
(ii) Unmanned Systems Development: Focus on unmanned combat and logistics platforms for Defence including drones, anti-drones, and self-destroying drones, as part of its Direct-to-Defense (D2D) offerings.
(iii) Partnership Growth: Expand engagements with traditional partner OEMs, particularly the Big 6 of Europe.
To reflect this transformation, Mistral will reposition itself as a “Chip to Product” C2P company.
Financials:
Axiscades Technologies reported a marginal growth in revenue from operations, experiencing a year-on-year increase of nearly 5.2 percent, rising from Rs. 252 crores in Q2 FY24 to Rs. 265 crores in Q2 FY25.
Likewise, during the same period, the company’s net profit increased from Rs. 11 crores to Rs. 12 crores, representing a growth of around 9 percent YoY.
Stock Performance:
The stock has delivered negative returns of nearly 13.2 percent in one year, as well as around 4.6 percent returns in the last six months. So far in 2024, the shares of Axiscades Technologies have given negative returns of about 28 percent.
About the company:
Incorporated in 1990, Axiscades Technologies Limited is principally engaged in the business of Technology Services and Solutions.
Written by Shivani Singh
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