Centum Electronics Q2 FY27 Profit Soars 77%

Centum Electronics reported standalone revenue of INR 3,121 million and a profit of INR 228 million for Q2 FY27.

Reader Takeaway: Strong defense order inflow drives 77% profit growth, though monitoring working capital efficiency remains essential for investors.

What just happened

Centum Electronics posted a strong performance for the second quarter of the current fiscal year. Revenue jumped by 52% year-on-year to INR 3,121 million, while PAT saw a significant increase of 77% to INR 228 million. EBITDA margins expanded by 87 basis points to 12.69%, reflecting improved operational efficiencies as the company scaled its high-complexity defense and aerospace projects.

Why this matters

The company’s strategy of balancing Build-to-Specification (BTS) projects with its Electronic Manufacturing Services (EMS) segment is showing results. BTS operations are delivering higher margins, while the EMS segment provides predictable cash flow. The company’s order book is currently valued at INR 20 billion, marking a 38% growth compared to the previous year, which provides visibility for future revenue growth.

Business Updates

Key order wins include an export order for advanced electronics systems worth INR 305 million and a follow-on naval navigation system order valued at INR 515 million. Additionally, Centum reached critical design milestones for its indigenous AESA Radar program. The firm also added three new marquee customers to its EMS portfolio, indicating continued market penetration.

What changes now

Operational efficiency has improved, with net working capital days reducing by six days. The Days Sales Outstanding (DSO) specifically improved by nine days to 106, supported by focused collection efforts during September. This improvement in the cash conversion cycle is a positive signal for balance sheet health.

Risks to watch

Investors should track the execution pace of the INR 20 billion order book. As the company takes on high-complexity defense contracts, maintaining high-reliability standards and managing the potential impact of long project lead times on cash flows will be critical.

What to track next

The market will look for consistency in margin expansion and the company's ability to convert its high-value defense pipeline into realized revenue in the coming quarters.