Rossell Techsys plans to spend up to Rs 15 crore as capex for the next 3 years

Rossell Techsys posted a 20 percent jump in revenue to Rs 260 crore in fiscal 2024-25. It holds purchase orders worth Rs 800 crore and has strategic agreements with defence manufacturers totaling Rs 2,800 crore.

Aerospace and defence firm Rossell Techsys is planning to spend Rs 10 crore to Rs 15 crore every year as capital expenditure towards the company's research and development budget and also intends to expand its manufacturing presence in the aerospace supply chain through greenfield expansion or acquisition, Managing Director Rishab Gupta told Moneycontrol.

"Currently, Rossell Techsys has the capability and capacity to manufacture and carry out maintenance of seven percent of an aircraft's needs, the idea is to expand in the next three years to supply parts and carry out maintenance for 15 percent of an aircraft," Gupta told Moneycontrol.

The Bengaluru-based company is also in talks with multiple airports across India to set up an aircraft maintenance, repair and overhaul (MRO) base. Gupta added that Rossell Techsys plans to tie up with the biggest MRO brands and airports in the country to offer these highly technical services.

"Aircraft MRO is very specialised across different domains, be it for engine maintenance, structure maintenance or the cockpit, so on and so forth, and no one company in India has the capability to do everything in-house. They will definitely need to partner with different companies. So our strategy is, we specialise in certain domains and will be tying up with different companies to expand into the MRO space in India," Gupta said.

Rossell Techsys currently works with 26 different foreign aerospace and defence companies including Honeywell, Lockheed Martin, Boeing, General Electric, Israel Aerospace Industries and a couple of German companies to provide design, development, engineering, prototyping, testing, integration, installation, commissioning, repair, upgrades and maintenance till end of life, apart from delivering services related to electronic systems and electrical wiring interconnection system.

Gupta added that in the last past 12–18 months, the company has been increasing its focus on the Indian market.

"We’re working with key domestic players like IAF, HAL, BEL, and others. The goal is to expand both our product portfolio and order book in India. There’s significant potential here, and we definitely want to increase our domestic work share, although we’ll continue to maintain our global footprint as well," Gupta said.

A large portion of the company's revenue was linked to Boeing till the pandemic, but since then Rossell Techsys has expanded to increase its client base to reduce its dependency on one client, Gupta said.

"Boeing will contribute to 40 percent of our top line in 2024-25, while 60 percent of our revenues will come from other clients," Gupta said, adding that the production challenges at Boeing did have an impact on the company's turnover in 2023-24 and in the first two quarters of 2024-25, but said the company expects a significant increase in revenue from Boeing.

"A company like Boeing will get back on track for sure. Things have started to stabilise with them. Fortunately, on the defence side, they haven't faced so many challenges as they have in the commercial side. So it is more streamlined," Gupta said.

Gupta added that Rossell Techsys has an order book of around Rs 3,000 crore from strategic long-term contracts and has an additional Rs 900 crore worth of contracts which will likely be finalised soon.

He expects the company's electrical panels segment to lead revenue growth with the electrical harness segment expected to contribute a significant portion.

Rossell Techsys posted a 20 percent jump in revenue to Rs 260 crore in fiscal 2024-25. It holds purchase orders worth Rs 800 crore and has strategic agreements with defence manufacturers totalling Rs 2,800 crore.

Rossell Techsys specialises in solutions focusing on high-performance assemblies and sub-assemblies. Partnering with global defence majors, it delivers mission-critical products from India. Spun off from Rossell India Ltd in August 2024 in a strategic move that would allow the new company to access new markets independently, and look at more enhanced growth, it was listed on the National Stock Exchange and BSE on December 9, 2024.

The company reported an 18 percent year-on-year growth in its revenue to Rs 186 crore in FY23, with absolute EBIT or earnings before interest and taxes improving to Rs 23 crore, while EBIT margins were stable at 12 percent. The EBIT margin was at 12 percent for the first quarter of FY24 as well. Rossell Techsys is yet to publish its results post-listing.

The company, unique in Asia for its NADCAP AC7121 certification, continues to build onto its legacy of excellence and innovation in the aerospace and defence industries.