Krishna Defence & Allied Industries Ltd

- The company has recently done a fundraising round aiming to raise close to ₹15-20 crores for CapEx and ₹35-40 crores for working capital. - No specific mention of plans for immediate new fundraising through debt or equity beyond this. - Fund usage from the recent fundraising is aligned to support anticipated order flows and capacity expansion. - No declared plans for shutting down the dairy business, implying ongoing interest in operational funding. - The management did not disclose any explicit future fundraising intentions during the call.

- The company is undertaking a brownfield expansion adjacent to its existing facility in Halol, Gujarat. - Planned CapEx of approximately ₹15-20 crore is allocated for this expansion. - The new facility will manufacture weld consumables and bulb bars, increasing capacity from about 2,000-2,500 tons annually to around 4,000 tons. - Civil infrastructure work and equipment orders are underway, with the facility expected to be operational by September-October 2024. - Total CapEx block is around ₹14 crore, with over ₹11 crore deployed specifically in the defence business. - The company raised ₹50-60 crore recently; around ₹15-20 crore intended for CapEx and ₹35-40 crore for working capital. - Expansion aims to double capacity and increase revenue potential from ₹180-200 crore to about ₹350-400 crore from the existing facility. - The company focuses on R&D and development of new defence products, targeting a diversified product portfolio.

- The company targets a growth of approximately 40% CAGR in sales/revenue over the next three years. - Demand is expected to increase from the shipbuilding side for existing products. - Existing capacity expansion plans aim to increase production capabilities, supporting revenue growth from around ₹180-200 crores to ₹350-400 crores. - New products under development, including composite doors and electronic warfare communication systems, are expected to contribute to future revenues. - The company aims to diversify its product portfolio with 7-8 products, each targeting ₹50-100 crores in revenue, reducing dependency on a single product. - Export opportunities and tie-ups with foreign partners are being explored but specifics are currently confidential. - Overall, management remains optimistic about scaling revenues with increasing market share and product pipeline expansion.

- The company targets approximately 40% CAGR growth over the next three years. - Revenue is expected to grow significantly, driven by expanding shipbuilding orders and product ramp-up. - EBITDA margins are anticipated to improve, aiming to reach around 20% in the next 1-2 years, though actual margins may settle between current (~15%) and aspirational levels. - Operating leverage is expected to kick in with increased production, enhancing profitability. - PAT margins increased to 10.06% in H2 FY24 and are likely to improve alongside revenue growth. - The company plans capacity expansion (doubling manufacturing capacity) to support growth. - Unit economics for products like bulb bars will improve with scale, supporting higher margins. - Overall, earnings, operating profits, and EPS are projected to grow strongly aligned with 40% revenue CAGR and improving margins.

- Current order book is above ₹230 crores as of early FY25 (Page 6, 8). - Recent large order of ₹88 crores received on April 3, 2024, to be executed over ~8 months, spilling into Q3 FY25 (Page 11-12). - Additional orders are in process, under evaluation or tendering stage, expected to close within the financial year (Page 13). - Order pipeline expected to support 40% CAGR growth for the next three years (Page 20). - Orders typically have a gestation period ranging from 6 to 24 months depending on complexity (Page 11). - Total block capital employed around ₹14 crores; ₹11 crores deployed in defense business indicating ongoing capacity utilization for pending orders (Page 26).