Digilogic Systems Ltd (DIGILOGIC) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to Q2 and H1 FY '27 earnings conference call of Digilogic Systems LTD, hosted by Antique Stock Broking. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjeev B Zarbade from Antique Stock Broking. Thank you, and over to you, Mr. Zarbade.
Sanjeev B Zarbade (Antique Stock Broking): Thank you, operator. Good evening. On behalf of Antique Stock Broking, I welcome you all to the 1H FY '27 earnings conference call of Digilogic Systems Limited. I am pleased to have with us today, Mr. J. Madhusudan Varma, Chairman and Managing Director, Mr. J. Shashank Varma, Whole Time Director and CEO, Mr. J. Hitesh Varma, Whole Time Director and CTO, and Mr. Sriharsh Vadakattu, Chief Financial Officer. Along with the management team, congratulations to Mr. Varma and Team Digilogic for delivering steady profit growth in 1H and all, all and all the best for the future. So, may I now invite Mr. Madhusudan Varma to discuss the results, post which we can take the Q&A. So over to you, Mr. Varma. Thank you.
J. Madhusudan Varma (Digilogic Systems Ltd): Thank you. I am Madhusudan Varma. I am the Chairman and Managing Director of Digilogic Systems Limited. Good afternoon, ladies and gentlemen. At the outset, let me thank Antique Stock Broking for organizing our H1 FY7, '27 earning call to interact with investors and analysts. As you are aware, Digilogic was founded in year 2007, and we operate in India Indian aerospace and defense sector. In the present geographical scenario, creating deterrence has become a need of the hour for all countries in the world. However rich and wealthy the country is, if you do not have a strong and effective defense force, they are always vulnerable to the neighboring countries who may have expansionist ideology in their governance. Hence, having a strong and effective defense force has become the need of the hour for all countries. In the age of technology, the wars are not won only by strong artillery and infantry troops. It has become more of a war using technology. In this context, all guided weapons like missiles, rockets, guided bombs and drones, etcetera, have become very critical for war arsenal of defense forces. They are expendable in nature, cost-effective and more destructive when compared to the fighter planes and warships. Guided weapons have a very precise in selecting the targets to make sure that there is always a pinpoint attack with minimum collateral damage in the surroundings. Any kind of misguidance can cause a catastrophic effect on the civilian population. Hence, the effective lab testing of various components or onboard systems or critical for both critical and noncritical which are flying in their weapon in, on their weapons, becomes very critical and essential. Keeping this in view, the Government of India has while allocating the budget itself, made sure that the enough emphasis is maintained and good amount of fund is allocated to cater for internal testing while evaluating these critical systems. This is where Digilogic plays a major role in providing automated test equipment and checkout systems
J. Madhusudan Varma (Digilogic Systems Ltd): into production and integration. Now, I request our CEO, Mr. Shashank Varma, to take you through our business model and other key initiatives initiatives being undertaken within the company. Over to you, Mr. Shashank.
J. Shashank Varma (Digilogic Systems Ltd): Thank you, MD, sir. Let me give you a quick update on our business and other key initiatives. Coming to our H1 FY '27 business performance. During the year, we have executed 36 number of projects valued at around 33.18 crores. The key customers serviced by us include public sectors and DRDO agencies. I am happy with how the first half of 2026 has shaped up for us. We have grown on every front that matters, be it revenue, margins, or profits. And that's a credit that goes to our customers who have trusted us and our team. Test, measurement, and simulation systems remain at the heart of what we do, and that isn't going to change anytime soon. What we have done is to strengthen our R&D. We have bought on board experts on these markets, and they have joined Abhedya Systems, our wholly owned subsidiary. If things go to plan, Abhedya should start its commercial commercial production in H2 FY '29. And we are excited about what that could mean for our group. We are excited about the progress with which project Udaan is taking shape. Once the facility is ready, it will be a catalyst to help Digilogic reach the next orbit. We also want to make sure we are ready for the opportunities that is coming our way and there there are more them more of them every year. So right now, we are putting proper SOPs in place and upgrading the technologies we are we use everyday across all our key functions. We expect to wrap this up somewhere between December 2026 and March 2027. And once it is done, I believe we'll be in a sharper, faster, and more scalable organization. On year-on-year basis, in FY '27, based on our H1 performance, current order book of Rs. 20 crores and order pipeline of 54 54 crores, business opportunity identified and under progress is close to around 189 crores. We are confident of achieving a growth of 25% to 30% top line, 30% to 35% in EBITDA and PAT. For more, I think I'll hand over to Mr. Harsha, our CFO.
Sriharsh Vadakattu (Digilogic Systems Ltd): Thank you, Shashank. Before we delve into the numbers, we would like to quickly bring to your notice that typically, in defense industry, H2 is a much stronger period compared to H1. For instance, we have reported revenue of 78 crores in FY '26, out of which H1 was 19 crores and H2 was 59 crores, which emphasizes the weightage of the H2 period. Hence, comparing H1 to H2 is not an apple-to-apple comparison. Now, getting into the financials. In terms of financials, our revenue grew by 91% from 18 crores to 34.96 crores. Our EBITDA grew by a healthy 126% from 3.45 crores to 7.81 crores, and our PAT grew from 1.9 crores to 4.76 crores in H1 FY '27, thus registering a growth of 151%. With this, we can open the floor for Q&A.
Moderator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. So the first question is from the line of
Moderator: Krishna from MoneyPurse Finserv LLP. Please go ahead.
Sai Krishna (MoneyPurse Finserv LLP): First of all, congratulations to the entire team for the great set of numbers. I have a couple of questions. Madhusudhan sir, in our presentation we have mentioned that high precision gimbal system and the custom-built single board computer will be in will come into our product portfolio very soon. When can we expect this product and what kind of revenue expected from this new product?
J. Madhusudan Varma (Digilogic Systems Ltd): Okay. Now when it comes to timeline of this product becoming active and going marketable, it should be somewhere mid of next financial year that could be somewhere mid of '27. We we will be in a position to make the system marketable. When it comes to kind of market potential what we are talking about, the this is could be because this system the way we are building it, it is totally reconfigurable system and applicable to most of the onboard applications. It means with this we are of the opinion this will be able to add up minimum probably 3 to 4 crores a year to start with, from which we will break-even and from thereon what is going to be in a scalable scenario where we will be able to get add more numbers to it because this product is going to be part of most of the programs and that's how we are looking at. That is the reason we have invested on this and making it live.
Sai Krishna (MoneyPurse Finserv LLP): Got it, sir. My second question is in our H2 last H2P presentation we have mentioned that our topline growth will be 25 to 30% and EBITDA will be 45 to 50%. We have given the guidance for this financial year. However, this up presentation when I saw it the topline growth has been same it it was stable and when it comes to EBITDA guidance it has been reduced to 30 to 35%. Why is that so?
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