Highlights of the call

The company's net sales for the quarter ended September has declined by 50% to Rs 14.24 crore. The margin of the company also suffered which has lead to loss of Rs 6.12 crore.

The quarter was very much disappointing, which was for the first time in last few years. The sales of the company suffered due to all the production order in hand are under documentation work and getting delayed. Also 40% of R&D type orders have been transferred to last quarter of the year.

The company's margin suffered due to delivery of the products, which has higher raw material content in it. This has also affected the profitability of the company.

As on date the company has Rs 283 crore worth of orders on hand. The company expects to add two big orders worth Rs 60 crore during the year.

The company enjoys 16% to 18% pre tax level margin in offset order.

Akash missile current order book is Rs 20 crore for 120 units and has already supplied half of it. It is expecting another order for 300 units (Rs 55 crore) from Indian army in next year.

The company is also expecting some 100 units order from air force.

The company earned Rs 20 crore from every 100 missiles order.

The 90% of the company's sales comes from DRDO

The company has long-term debt of Rs 18 crore and working capital of around Rs 30 crore. The company's cash has almost dried up.

The company has planned Rs 6 crore capital expenditure for FY10, mostly in testing equipments.

In defense, at present there is no company, which is in competition with Astra as it is not possible for new player to enter in any ongoing projects in between. As per the Defense norms, it calls for partners at the initial stage of any project or product development. To reach till commercial production level the whole process takes anywhere between 5 years – 8 years. Thus this make the segment almost monopoly with very high entry barriers.

The company has revised its sales target and expects to do sales of around Rs 140 crore for the full year FY10. Out of Rs 140 crore, the company expects Rs 70 crore revenue from defence, Rs 14 to 15 crore from metrology, less than Rs 10 crore from telecommunication and rest from space.

The company expects to have PAT margin of around 16% to 18% for FY10. The company expects volume to go up while cost is not expected to rise proportionately to volume which will lead to rise in PAT margin

The company expects to record sales of Rs 200 crore for FY11.