Centum Electronics misses FY26 margin targets as international restructuring drags
Standalone revenue climbed 25% to ₹973 crore, but margin headwinds from the EMS business leave the company shy of its annual goals.
What's new
- Revenue grew 25% to ₹973 cr, hitting the lower bound of annual growth expectations.
- Order book hits ₹1,645 cr, thanks to a ₹570 cr airborne radar contract from HAL.
- Restructuring of European and Canadian subsidiaries to finish by July 2026.
Why this matters
Centum depends on its ₹1,645 crore order book to fix the margin slippage seen this year. With the cash-draining international units moving toward a July 2026 exit, the company enters a year where it must prove it can hit mid-teens profitability targets.
What we're watching
- Margin recovery in the EMS division as the product mix shifts.
- The final court-supervised sale of the French subsidiary assets.
- Whether annual revenue growth maintains the 25-30% pace in FY27.
The full read
Centum Electronics concluded FY26 with ₹973 crore in standalone revenue, marking 25% growth that reached the lower end of management's guidance. Profitability trailed expectations. An unfavourable product mix within the EMS business kept EBITDA margins at 12.42%, missing the 13-15% target. The growth narrative relies on a record order book of ₹1,645 crore, which includes a ₹570 crore airborne radar contract from Hindustan Aeronautics. Management is attempting to clear the balance sheet, with the restructuring of its overseas units in Canada and Europe entering its final stage. This includes a court-supervised asset sale process in France expected to finish by July 2026. Once complete, these entities will be off the books with no further cash leakage. The next test is whether the firm can use its current backlog to reach its margin goals without the weight of its international subsidiaries.
Questions answered
- What is the status of Centum's loss-making foreign subsidiaries?
- They are classified as discontinued operations, and the restructuring process—which includes a court-supervised sale in France—is set to conclude by July 2026.
- Did the company meet its financial guidance for FY26?
- Revenue growth of 25% was at the lower end of the 25-30% target, but the 12.42% EBITDA margin fell short of the 13-15% guidance.