Astra Microwave Products: An Investment Analysis

JM Financial has started to watch Astra Microwave Products (AMPL), a company that makes parts for defense technology. They think AMPL is a good long-term investment because the government is buying more defense equipment. This means AMPL could grow significantly over the next few years as it gets more orders from the military. This is particularly focused on growth between 2027 and 2030.

Key Points

• AMPL is recommended as a long-term defense electronics investment.
• Government defense contracts will drive significant revenue growth.
• Orders from MoD (Ministry of Defence) are key to future success.
• Current stock price: ₹888, valuation at 37.4x/29.3x P/E.
• Target price based on 38x multiple, discount to larger PSU multiples.
• Potential risks include delayed orders and government spending changes.

Currently, AMPL makes specialized parts – like radio and microwave technology – for the Indian military. They’re working on becoming a complete solution provider, meaning they design and build entire defense systems, not just individual components. They are focused on things like AESA radar, radar systems for fighter jets, and even technology to fight drones.

As of September 30, 2025, AMPL has a big order book worth ₹2,200 crore. This shows strong demand for their products. Over the past five years (FY21-25), AMPL has grown its sales by 13% each year. They’ve also improved their profits, increasing their profit margin to 25.6% in FY25, compared to just 12.3% five years ago.

JM Financial predicts AMPL will see even faster growth, with sales jumping 18% per year from 2025 to 2028. They also expect the company’s profits to increase by 40 basis points (a small percentage) to around 26% by 2028. This would mean their profits would grow by 23% during this time.

Several important government projects could boost AMPL’s business in the next few years, including the QRSAM project, the ‘Uttam’ radar for fighter jets, and systems for upgrading existing military aircraft. They’re also looking at opportunities in space technology, weather forecasting, and selling products overseas.

To achieve this growth, AMPL plans to do several things. They want to build bigger, more complex systems, often by working with other companies. They will also change the mix of their sales to focus on higher-profit projects and sell more products within India. Finally, they want to keep a strong financial position.

However, JM Financial also points out some potential problems. The government might not give out contracts as quickly as expected, or the government’s spending on defense could decrease. There could also be disruptions in the supply chains that make their parts.

“Ultimately, the success of Astra Microwave Products hinges on the Indian government’s commitment to modernizing its defense capabilities.”