Synopsis: A defence small-cap company has approved in-principle demerger of its Space, Meteorology and Hydrology division into a separately listed entity, aiming to unlock value, enhance strategic focus, and drive sector-specific growth.
A small-cap company that is engaged in the business of design, development and manufacture of sub-systems for Radio Frequency and microwave systems used in defense, space, meteorology and telecommunication has come into focus after board approves demerger.
With the market capitalization of Rs. 9,285.62 crore, the shares of Astra Microwave Products Limited were trading at Rs. 975.80, down by 1.56 percent from its previous day’s close price of Rs. 991.30 per equity share.
News
Astra Microwave Products Limited has announced that its Board has granted in-principle approval to explore the demerger of its Space, Meteorology and Hydrology business into a separate entity. The restructuring will result in the creation of two independently listed companies; Astra Microwave Products Limited, which will remain focused on Defence and Aerospace.
And Astra Space Technologies Private Limited (ASTPL), which will exclusively house the Space and Weather-related businesses. The approval is preliminary, and final terms including structure and share exchange ratio will be decided after requisite reports and regulatory clearances.
Strategic Rationale
The company stated that the move is aimed at unlocking shareholder value and sharpening strategic focus. By separating Defence and Space operations into two focused platforms, each entity can pursue sector-specific growth strategies, improve governance and accountability, and adopt clearer capital allocation frameworks.
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The restructuring is also expected to reduce structural complexity, enhance transparency, and broaden the investor base by offering distinct investment opportunities in two high-potential sectors.
Growth Opportunity
The Space, Meteorology and Hydrology business is described as a scaled-up, profitable, and high-growth vertical driven by rising demand for satellite design, assembly, and satellite data applications across domestic and global markets.
ASTPL is positioned as an integrated player spanning upstream hardware, midstream integration, and downstream data applications. However, the segment is capital-intensive and execution-driven, requiring focused leadership and investment to scale technical capabilities and expand satellite-related solutions.
Post-Demerger Structure
Post completion, Astra Microwave will operate as a pure-play Defence and Aerospace company while retaining its stakes in joint ventures and wholly owned subsidiaries. ASTPL will function as an independently listed entity with mirror shareholding identical to Astra’s existing structure. It is proposed to be listed on both the BSE and NSE, with the Space business transferred on a going-concern basis to ensure operational continuity.
Financial Impact
Management expects the transaction to be value accretive over the medium to long term by enabling focused growth, better capital deployment, and improved operational efficiencies. The structural clarity is also expected to help attract capital and talent, particularly as India’s space ecosystem gains momentum globally.
Approvals and Timeline
The demerger will be implemented through a Scheme of Arrangement under the Companies Act and SEBI regulations. It will require approvals from the Board, shareholders, creditors, stock exchanges, and the National Company Law Tribunal (NCLT), along with other regulatory clearances.
The company aims to complete the process and list ASTPL by Q1 FY28, subject to timely approvals. During the transition, business operations are expected to continue without disruption to employees, customers, or partners.
About the Company & Financial
Astra Microwave Products Limited designs, develops, and manufactures radio frequency (RF) and microwave subsystems primarily for defense, space, meteorology, telecommunications, and civil applications. Its product portfolio includes radar electronics, electronic warfare systems, telemetry and strategic electronics, satellite subsystems, ground-based radar systems, weather monitoring equipment, and homeland security solutions. The company also exports its products to international markets. Incorporated in 1991, it is headquartered in Hyderabad, India.
A return on equity (ROE) of about 14.4 percent, a return on capital employed (ROCE) of about 18.7 percent and debt to equity ratio at 0.24 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 57.7x similar as compared to its industry P/E 57.7x.
The company reported revenue of ₹260 crore in Q3FY26, registering a marginal 0.4% year-on-year (YoY) growth compared to ₹259 crore in Q3FY25. On a sequential basis, revenue increased 20.9% quarter-on-quarter (QoQ) from ₹215 crore in Q2FY26, indicating a strong recovery in topline performance during the quarter.
EBITDA stood at ₹83 crore in Q3FY26, reflecting a healthy 9.2% YoY rise from ₹76 crore in Q3FY25. On a QoQ basis, EBITDA surged 72.9% from ₹48 crore in Q2FY26, highlighting significant improvement in operating efficiency. The sharp sequential jump suggests better cost control and improved execution.
Profit after tax remained flat YoY at ₹47 crore compared to ₹47 crore in Q3FY25. However, on a sequential basis, profit grew 95.8% from ₹24 crore in Q2FY26, nearly doubling quarter-on-quarter. The strong QoQ bottom-line growth indicates margin expansion despite relatively stable annual revenue growth.
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