Premier Explosives Ltd. is targeting a margin of 18% to 20% in FY26, led by a diversified defence portfolio, according to Managing Director TV Chowdary.
“Defence sector definitely contributes the highest margin, which can come up to 25%,” he told NDTV Profit in a conversation on Monday.
Premier Explosives is providing the government-owned, company-operated services to the Indian Space Research Organisation. There, the margin is coming down because it’s a 10-year contract, Chowdary said.
“For bulk explosives, it will be something like 5% to 7%. The average margin will be in the range of 18% to 20%,” he said.
He clarified that the company’s top-line target for 2030 is Rs 1,000 crore, not Rs 10,000 as reported previously. Chowdary added that the margins are expected to hold steady or improve beyond the 20% mark by 2030.
Premier Explosives expects new orders worth approximately Rs 700 crore during the current financial year. In Q4 FY25, the company received a “very important” order from BrahMos Aerospace. Initially valued at around Rs 24 crore, the company expects it to double.
The company’s confidence in its future outlook is backed by diversification within its defence portfolio.
“We cannot say we are a propellant manufacturing company. We are manufacturing devices that are contributing well to the defence turnover. That is countermeasures and mines, then medium-calibre ammunition and also export of RDX and HMX (high-melting explosive),” he emphasised.
The dependence on defence is not going to come down because most of the turnover will come from defence only. Within the defence, reliance on one product or two products will come down, according to Chowdary.
He provided an update on the operational impact of an explosion at one of its facilities in Telangana in April. He reassured that the financial hit would be limited to “around Rs 20 to Rs 25 crore”.
However, the top executive confirmed that the Telangana Pollution Control Board granted temporary operational permission for three months, with a review to follow. Production of other products, including propellants and munitions, continues unaffected at other plants.
Chowdary attributed the quarterly volatility to the nature of the defence business, where delivery schedules and inspections can cause figures to fluctuate. “Some quarters it goes up and some quarters it goes a little down,” he explained.
He expressed confidence that any profit shortfall from FY25 would be made up in the coming two quarters.
Watch
. Read more on Business by NDTV Profit.