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Earnings Call Overview • Date: August 2, 2024 • Quarter Ended: June 30, 2024 • Hosted by: CEO Ankit Mehta, CFO Vipul Joshi, moderated by Parth Patel • Transcript available on company website • Forward-looking statements include risks and uncertainties
Key Achievements • Surpassed 500,000 flights on systems • Achieved AS 9100D and ISO 27001:2022 certifications • Launched FLYGHT CLOUD for automated drone data management • Gained traction in drone-as-a-service model with enterprise customers • Positive international responses, particularly in the U.S. for border security solutions • Secured five new patents
Financial Performance • Q1 Revenues: INR 86 crores (down from INR 97.1 crores) • Gross Profit Margin: 33.3% • Optimistic about L1 pipeline of INR 300 crores despite current order book of INR 52.4 crores • R&D spending: INR 16.5 crores, all capitalized
Market Opportunities • Potential revenue from collaborations: INR 250 crores from Synthetic Aperture Radar payloads • LiDAR market projected growth from $120 million to $400 million in five years • Strong demand for high-tech drones in logistics and surveillance
Concerns Raised • Decline in employee costs and significant drop in order book • Rising material costs affecting gross margins • Revenue visibility and sustainability of margins questioned
U.S. Market and Partnerships • Significant opportunity in public safety sector estimated at $200 million • Prepared to execute large orders with capacity for over 10,000 drones annually • Partnership with Skylark Labs to enhance Border Management Solution
Conclusion • Emphasis on continuous product development and capturing market share • Assurance of maintaining similar annual results to the previous year despite challenges • Commitment to providing updates on future progress and developments
Submission Details • Date of submission: May 20, 2024 • Earnings call date: May 15, 2024 • Participants: CEO Ankit Mehta, VP Engineering Rahul Singh, CFO Vipul Joshi • Transcript availability: Company website • Signed by: Sonam Gupta, Company Secretary
Key Achievements • Certifications: AS9100D and ISO 9001:2015 • Operational performance: Over 450,000 cumulative flights • US market progress: Beta testing with law enforcement • Transitioning to a franchise model for Drone as a Service • Patents: Secured six new patents, totaling 38
Financial Performance • Q4 revenues: INR 102.3 crores; PAT: INR 10.3 crores • FY24 revenues: INR 314 crores (up from INR 186 crores in FY23) • Order book: INR 125 crores; L1 pipeline: over INR 300 crores
Market Insights • L1 pipeline explained: Strong project visibility of INR 400-450 crores for Fiscal '25 • Cautious approach in the US market: Focus on understanding customer needs • Initial focus on public safety sector in the US
Research and Development • R&D team expansion: Approximately 200 members • R&D expenditure: INR 51 crores in FY24 • Mid-mile project: Concept finalization underway; revenue expected in a couple of years
Capitalization and Financial Strategy • Capitalized amounts: INR 47 crores; INR 38 crores for FY 2023-24 • Amortization period: Three years • Cautious growth projections for the next three years
Strategic Investments • Investment in Nautical Wings: Enhancing indigenous capabilities in drone technology • Focus on reducing reliance on global supply chains
Production-Linked Incentives • 12% PLI impact: Included in Q4 revenue; not solely relied upon for profitability
Future Aspirations • Commitment to advanced technology and global opportunities • Vision of being unrivaled in unmanned systems
Innovation and Collaboration • Encouraging external innovation for drone payloads • Successful collaborations for multispectral, LiDAR, and radar technologies
Financial Performance Metrics • Basic EPS: 10.96; Diluted EPS: 10.77 • Declining contribution margins attributed to growth investments and competitive pricing
Conclusion • Invitation for further inquiries from participants.
Earnings Call Overview • Date: February 6, 2024 • Submitted transcript to BSE and NSE on February 12, 2024 • Participants: CEO Ankit Mehta and CFO Vipul Joshi
Key Highlights • Global Ranking: Increased ranking as a dual-use drone manufacturer. • Patents: Achieved seven new patents. • Innovation Platform: Launched India's first drone innovation platform. • Financial Performance: • Consolidated revenue: ₹90.9 crores (quarter), ₹211.7 crores (nine months). • Order book: ₹175.8 crores as of December 31, 2023.
Q&A Session Insights • Order Pipeline: Substantial opportunities in defense and civil sectors; tracking large deals. • MAKE II Program: Team ramp-up confirmed; initial prototyping expected within the year. • Drone as a Service: Anticipated significant revenue contribution in 3-5 years. • Order Book Analysis: No current split between defense and civil sectors; longer execution timelines for defense orders. • Patent Development: Seven new patents reflect advanced prototypes; two new drone categories introduced.
Market Position and Strategy • Market Share: Ranked fifth globally in dual-use drones; focus on surveillance and intelligence for defense. • Software vs. Hardware: Expertise in both areas; in-house software development for drone functions. • Marketplace Development: Integrating industry software for UAVs; potential for third-party technology automation.
Growth and Revenue Projections • Innovative Partnerships: Collaborations with companies like GalaxEye; exploring mergers and acquisitions. • Revenue Challenges: Vast market potential with emerging use cases; international market exploration. • Operating Costs: Stable or increasing operating expenses expected as demand scales.
Operational Metrics • Capacity Utilization: 80% for a single shift; 60,000 flights recorded in FY24. • Flight Targets: Ambitious goal of one million flights in the next couple of years. • ESOP Costs: Expected normalization to 40-50 lakhs per quarter.
Competitive Landscape • Quadcopters and UAVs: Capacity remains unchanged; focus on differentiated products. • EBITDA Margins: Projected sustainable margins between 25% to 30%.
Additional Notes • R&D Costs: Capitalized as product development expenses; other expenses include provisions and recruitment. • Export Sales: Currently low, under 2-3%, as the company begins to enter the market.
Conclusion • The call concluded with Mehta thanking participants and wishing them well for the upcoming quarter.
Earnings Call Overview • Date: November 8, 2023 • Participants: CEO Ankit Mehta, CFO Vipul Joshi, Moderator Amay Yardi • Focus: Unaudited financial results for the quarter and half year ended September 30, 2023 • Transcript available on the company's website
Strategic Focus • Expansion of addressable market through drone applications and collaborations • Transition from proof of concept deployments to early commercial contracts, especially in North America • Introduction of a mobile service center for enhanced customer support • Ongoing product development, including a new quadcopter drone with advanced features
Financial Performance • Quarterly revenue decreased by 41% year-on-year to INR 23.7 crores • Gross margin reported at 42.1% • Fresh orders secured worth INR 169 crores, increasing order book to INR 253 crores • Confidence in future revenue growth, particularly from international markets
Revenue Guidance and Order Pipeline • No specific revenue guidance for fiscal '24, but expectations for meaningful growth • Order execution is typically lumpy with a year-long fulfillment timeline • Substantial opportunity pipeline tracked, but conversions are uncertain
R&D and Margins • R&D expenditures of 20-22 crores in the first half, similar expected in the second half • Variability in margins acknowledged, with expectations to align more closely with Q1 figures
Production and Supply Chain • Primarily in-house production with some vendor utilization • Revenue recognition linked to product dispatches and customer readiness • 29% of revenue from imports, mainly electronic subsystems from Taiwan
Market Opportunities • Increased focus on civil procurement due to regulatory clarifications • Growing civil drone market domestically, with defense sector remaining a priority • Development of a middle-mile logistics drone project for enhanced logistics efficiency
Working Capital and Revenue Predictability • Efforts to optimize payment terms and reduce lead times for inventory management • Inventory built only after receiving orders to avoid overstocking • Variability in revenue recognition timelines due to customer scheduling delays
Conclusion • Strategic shift towards tactical drone segment driven by customer demand • Emphasis on leveraging advancements in AI for drone systems • Call concluded with gratitude and season's greetings from CEO Ankit Mehta
Earnings Call Details • Date of Submission: August 16, 2023 • Quarter Ended: June 30, 2023 • Call Date: August 9, 2023 • Participants: • CEO: Ankit Mehta • CFO: Vipul Joshi • Moderator: Ashish Shah (JM Financial) • Transcript Availability: Company website • Signed by: Sonam Gupta, Company Secretary
Company Performance Highlights • IPO Success: Oversubscribed 106 times • Revenue Growth: Over 150% quarter-on-quarter, reaching INR 97.1 crores • Profit Margins: • EBITDA Margin: 29.4% • PAT Margin: 19.4% • New Order: INR 88 crores from a defense customer, delivery within 12 months
Key Discussion Points • Project Timelines: Execution largely within the current fiscal year; some deliveries may extend into the next year. • Supply Chain Concerns: High localization mitigates impacts from China's export restrictions on UAV components. • Working Capital: Targeting a networking capital cycle of around 200 days; inventory days reduced from 205 to 85. • EBITDA Variability: Fluctuations expected due to order shipment structures. • Market Opportunities: Ongoing demand from the Ministry of Defense; growth potential in civil applications.
Competitive Landscape • Tendering Process: Emphasizes technical qualifications and real-world demonstrations. • Logistics Drone Market: Focus on middle-mile drones; not targeting every segment. • Compliance: Confirmed compliance with U.S. National Defense Authorization Act regarding component sourcing.
Future Outlook • U.S. Operations: Initial revenue expected this year; significant results anticipated next year. • R&D Investment: Increase in R&D team; ongoing investment in technology development. • Market Growth: Indian drone industry expected to grow over 18% in the next five years.
Conclusion • Strategic Positioning: Company poised to capitalize on the growing defense market through innovation and expertise. • Management Insights: Emphasized the importance of collaboration and technology transfers to enhance product performance.