Centum Electronics: Rs 1,797 cr order book and a Buy call

Centum Electronics (NSE: CENTUM) designs and manufactures electronics for aerospace, defence and space. Its products span embedded computers, actuator controllers, AC/DC converters and line-replaceable units. It has a 10-year-plus Thales relationship and supplies electronics for the Rafale, A380, A350, B787 and AW189. What happened: Q1 FY27 standalone revenue was Rs 204.8 crore (+10.7% YoY, -40.5% QoQ); continuing-operations PAT fell 12.9% to Rs 13.5 crore. Build-to-Specification (BTS) was Rs 56.6 crore, EMS Rs 148.2 crore (EMS +20% YoY). The consolidated headline PAT of Rs 105.5 crore includes a Rs 94.3 crore one-off gain from the court-approved deconsolidation of Centum T&S Group and French subsidiaries on 4 June 2026; recurring PAT from continuing operations was Rs 11.2 crore. Why it matters: The standalone order book was Rs 1,797.2 crore at Q1 FY27-end, up 31% YoY; BTS orders rose over 40%. A key win: Rs 66 crore Phase-I HAL order for AESA radar for the Utility Helicopter-Maritime platform, with Phase-II serial production potential of around Rs 500 crore. Revenue spanned India 46%, North America 31% and Europe & UK 23%. BTS margins of 18-20%+ versus EMS margins of 9-10% make the BTS mix the key earnings lever. What I am watching: BTS revenue share rising within the Rs 1,797 crore order book, the Rs 66 crore AESA radar execution and Phase-II conversion, and debt reduction from the current Rs 122 crore standalone borrowings. My stance: ICICI Securities initiated with a Buy and a Rs 5,900 target, implying 42% upside from Rs 4,157.50. The story makes sense if BTS scales. But the historical net-profit record has been uneven. I do not hold a position in Centum Electronics at the time of writing. This is not investment advice.