Digilogic Systems Limited has achieved a significant financial milestone by fully repaying its outstanding Indian Bank term loan of ₹8.42 crores on January 31, 2026, utilizing proceeds from its recent Initial Public Offering. This strategic debt reduction aligns with the company's stated IPO objectives and strengthens its financial position for future growth in the defence and aerospace sectors.

Debt Repayment Details

The company utilized a combination of funding sources to complete the loan repayment:

This prepayment was originally earmarked as one of the key objectives in the company's IPO prospectus, demonstrating management's commitment to reducing debt burden and optimizing capital structure.

Business Focus and Market Position

Digilogic Systems operates primarily in the defence and aerospace sectors, specializing in Test, Measurement & Simulation (TMS) markets. The company serves an established clientele including premier defense organizations through its comprehensive portfolio of test systems, application software, and services.

The company's business verticals encompass automated test systems, checkout systems, radar and electronic warfare simulators, data acquisition systems software, and intellectual property cores. These solutions cater to critical applications in missile testing, radar systems, avionics, and satellite technologies.

Financial Performance and Growth Projections

The company's recent financial performance shows consistent improvement across key metrics:

For FY26, the company has provided specific growth guidance, targeting 20-25% revenue growth, 30-35% EBITDA growth, and 40-45% PAT growth. The company currently maintains an order book of approximately ₹46 crores and is participating in bids worth approximately ₹200 crores.

Project Udaan Expansion Initiative

The company outlined Project Udaan, a major expansion initiative funded through IPO proceeds of ₹69.66 crores. The fund utilization breakdown includes:

Project Udaan aims to expand current verticals through additional workspace capacity, introduce manufacturing of electronic sub-systems with build-to-spec and build-to-print capabilities, establish in-house environmental stress screening and qualification facilities, and enable section-level integration of sub-systems. The project is on track for completion by end of FY28.

Management Commentary

Madhusudhan Varma Jetty, Chairman & Managing Director, appreciated the long-standing support from Indian Bank and emphasized that this full repayment significantly reduces debt and financing costs. He expressed confidence that with orders on hand of ₹46 crores and participation in bids of ₹200 crores, the company is well-positioned to achieve its FY26 growth targets of 20-25% growth in topline, 30-35% growth in EBITDA, and 40-45% growth in PAT.

Digilogic Systems Limited, a technology solutions provider for India's defence and aerospace sectors, has announced its Initial Public Offering (IPO) scheduled to open on January 20, 2026, and close on January 22, 2026. The Hyderabad-based company, founded in 2011, specializes in Automated Test Equipment systems, radar and Electronic Warfare environmental simulators, application software, and embedded signal processing solutions.

Strong Financial Recovery in FY2025

The company demonstrated robust financial performance in FY2025, showing significant improvement across key metrics. Revenue recovery was particularly notable after a decline in the previous year.

The company's profitability metrics showed substantial improvement, with PAT margin expanding from 4.64% in FY2024 to 11.25% in FY2025. Total assets grew by 104.22% to ₹72.57 crores, while equity increased significantly to ₹33.46 crores.

IPO Proceeds and Expansion Plans

The company has outlined specific utilization plans for the IPO proceeds, with the majority allocated toward infrastructure expansion.

The new facility will feature environmental test capabilities for electronic sub-systems, aimed at enhancing operational capabilities and reducing dependence on outsourcing. This expansion aligns with the company's strategy to strengthen its end-to-end solution offerings.

Business Profile and Market Position

Digilogic Systems operates through two facilities - its Corporate headquarters in Hyderabad and a marketing office in Bangalore. The company holds strategic industry certifications including AS9100D for aerospace quality management and ISO 9001:2015, positioning it as a qualified supplier for critical defence applications.

Key business characteristics include:

• Customer Loyalty: 98% of revenue in H1 FY2025 came from repeat customers
• Government Relations: Empanelled as Development cum Production Partner (DcPP)
• Experience: Over 18 years in defence and aerospace sectors
• Leadership: Management team with over 38 years of combined industry experience

Risk Considerations

Despite strong financial performance, the company faces several operational and financial risks that potential investors should consider.

The company's operating cash flow showed volatility, turning negative in FY2025 despite strong profitability improvements. This pattern indicates potential working capital management challenges typical in project-based defence businesses.

Growth Trajectory and Market Opportunity

The company's financial metrics indicate strong growth momentum, with revenue CAGR of 13.46% and PAT CAGR of 93.29% over the FY2023-25 period. The current ratio improved to 1.61 in FY2025, indicating better liquidity management.

Digilogic Systems' positioning in India's defence sector aligns with the government's focus on indigenization and increased defence spending. The company's reusable engineering platforms and comprehensive solution capabilities provide competitive advantages in securing repeat business from government entities and defence PSUs.