Rossell Techsys Limited , a leading provider of mission-critical solutions for the aerospace and defense sector, has reported a robust performance for the first quarter of fiscal year 2026. The company's management shared insights on its growth trajectory, diversification efforts, and future outlook during a recent earnings call.

Financial Highlights

• Total income for Q1 FY26 nearly doubled to INR 88.29 crores, up from INR 45.60 crores in Q1 FY25.
• Profit before tax improved from a negative INR 5.98 crores to a positive INR 4.01 crores.
• Profit after tax rose from a negative INR 4.47 crores to a positive INR 2.98 crores.

Operational Highlights

• The company's customer base has expanded significantly, growing from just 4 customers in 2020 to over 30 customers currently, with 26 active engagements.
• Rossell Techsys has diversified its portfolio beyond defense, venturing into space, energy, and semiconductor sectors.
• Boeing's contribution to the company's revenue is expected to be approximately 40% this year, down from previous years, indicating successful diversification efforts.

Future Outlook

• Management anticipates substantial growth in financial performance for the full year, with expectations of a multi-fold increase in revenue and potential multi-fold increase in profitability.
• The company is targeting EBITDA margins in the range of 18% to 22% in the short term.
• Rossell Techsys is evaluating inorganic growth opportunities to expand its capabilities and move up the value chain.

Strategic Initiatives

• The company is undertaking a capacity expansion of 15,000 square feet within its existing premises at an estimated cost of INR 1.5 crores, expected to be operational by Q3 FY26.
• Rossell Techsys is focusing on increasing its technical capabilities from the current 5-7% of aircraft components to 12-15% in the near term.
• The management is considering a fund-raise initiative to fuel growth and support expansion plans.

Sector-wise Performance

Challenges and Mitigation

• The company acknowledged an increase in inventory and working capital but stated it as a strategic decision to support growth.
• Management expects inventory levels to normalize by the end of the fiscal year, with a target of achieving a three-month inventory cycle in the long term.

Rishab Gupta, Managing Director of Rossell Techsys, expressed confidence in the company's growth prospects, stating, "We are very well positioned this year. As a company, we're expecting significant growth on our top line and bottom line, and that should continue in the short-, medium- and long-term."

The management's focus on diversification, capacity expansion, and potential inorganic growth initiatives positions Rossell Techsys for continued growth in the evolving aerospace and defense landscape.

Rossell Techsys , a leading aerospace and defense solutions provider, has reported a stellar performance for the first quarter, with significant growth in revenue and a return to profitability. The company's strategic expansion into new sectors and its growing customer base have contributed to this impressive turnaround.

Financial Highlights

Rossell Techsys reported a total income of INR 88.29 crores for Q1, representing nearly 100% growth compared to INR 45.60 crores in the same quarter of the previous year. The company achieved a significant turnaround in profitability with a profit after tax of INR 2.98 crores, compared to a loss of INR 4.47 crores in the previous year.

Key Financial Metrics

Expanding Customer Base and Diversification

The company has successfully expanded its customer base from just 2 in 2022 to over 30 currently, with 26 active engagements. This diversification has reduced the company's reliance on a single customer, with Boeing now expected to contribute around 40% of revenue, down from nearly 100% in previous years.

Rossell Techsys has also diversified its portfolio beyond defense, venturing into sectors such as space, semiconductors, and energy. The company now operates primarily in:

• Defense (60-65%)
• Semiconductor (10-12%)
• Space sectors (8-10%)

Approximately 80% of revenue comes from the USA.

Order Book and Future Outlook

The company holds:

• Strategic agreements worth approximately INR 2,500 crores
• Confirmed purchase orders over INR 700 crores

Management projects:

• EBITDA margins of 18-22%
• PAT margins of 8-12%

These projections indicate a positive outlook for profitability.

Capacity Expansion and Workforce Growth

To meet growing demand, Rossell Techsys is:

• Expanding capacity by 15,000 sq ft within existing premises
• Estimated cost of expansion: INR 1.5 crores
• Expected to be operational by the third quarter of this financial year
• Increased headcount from 680 to 960 employees

Management Commentary

Rishab Gupta, Managing Director of Rossell Techsys, commented on the results: "Quarter one has been a strong start to the year. Our total income has grown significantly, marking a near doubling in top-line performance. We anticipate a substantial growth in our financial performance for the full year."

Future Plans

• Evaluating a fund-raise initiative in the near term to fuel growth
• Looking at forward integration to increase technical capabilities from current 5-7% to 12-15% of aircraft components
• Exploring inorganic growth opportunities through acquisitions to expand into areas such as system integration, actuators, and solenoids

Dividend Announcement

In line with its commitment to shareholder value, Rossell Techsys has announced a 10% dividend.

As Rossell Techsys continues to diversify its portfolio and expand its global footprint, the company appears well-positioned for sustained growth in the aerospace and defense sector. With a strong order book and improving profitability, the company's outlook for the coming years remains positive.