In an interview with CNBC TV-18 Amit Mahajan, Director-Technical & R&D, Paras Defence & Space Tech said that the company's Q1 margin was impacted by higher employee costs and that they are targeting Rs 100 crore revenue from the drone business by FY25.
When asked about the company's ability to achieve its predicted profit margin of 30-40 percent for the current year, Mahajan said he wouldn't revise the prediction as the company has a strong order book value.
Also Read: Paras Defence Consolidated June 2023 Net Sales at Rs 48.32 crore, up 18.55% YoY
"I have always maintained we are a company, which cannot be judged on the basis of quarterly results so I am not going to revise my guidance. It is between conservatively 30-40 percent and this quarter is in no way an indicator as to how we're gonna perform in the coming year," Mahajan said.
The director also addressed the slight reductions in margins, which the company witnessed in this quarter but cited investments in manpower as a reason for the decline.
"Our margins will sustain, the quarter one shows a slight reduction in margins but that's probably because our employee benefit costs have gone up in the last few months because we have been investing in our own manpower, which is going to fuel our growth in the future," he added.
Also Read: Paras Defence shares surge 7% on JV with Israeli company
When asked about the range in which the margin is likely to be in the next couple of quarters, Mahajan said that the company is likely to close the year with a margin of "28-30 percent or slightly better than that".
Talking about the company's future bids and the status of the company's order book value, Mahajan said the order book stands in excess of Rs 650 crore. He also added that the company has opportunities in front of it in excess of Rs 2,000 crore.
"We have opportunities in front of us in excess of Rs 2000 crore so that's that's something which is increasing exponentially from year on year," Mahajan said.
When asked about the contribution of Paras Defence & Space Tech's drone business and export orders in the overall order book value, he said the drone business accounts for less than five percent of the total order book value.
"If you want me to put in absolute figures it is(drone business) still less than five percent of our order book value so drones are yet to make a positive influence, which is a good sign," Mahajan said.
Addressing the company's possible foray into exports, the director said that the company is not focussed on exports at the moment and is busy with domestic opportunities. However, he didn't rule out the possibility and said that the exports would come as a 'natural growth or progression' in a year or two.
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