Digilogic Systems Reports Strong FY26 Performance with 34% Growth in Net Profit, Expands Defence and Aerospace Capabilities

The company reported total income of Rs. 78.27 crore for FY26, marking an increase of 8.4 percent from Rs. 72.19 crore recorded in FY25. Operating income rose to Rs. 77.43 crore compared to Rs. 72.06 crore in the previous financial year, reflecting steady business growth and improved project execution.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 16.5 percent to Rs. 15.18 crore from Rs. 13.04 crore in FY25. EBITDA margins expanded by 152 basis points to 19.6 percent, compared to 18.1 percent a year earlier, supported by a favourable product mix and increased software value addition.

Profit before tax surged by 30.7 percent to Rs. 13.76 crore from Rs. 10.53 crore in FY25. Profit before tax margins improved by 315 basis points to 17.8 percent. Net profit after tax rose sharply by 33.8 percent to Rs. 10.43 crore, compared to Rs. 7.79 crore in the previous year. Profit after tax margins expanded by 265 basis points to 13.5 percent from 10.8 percent. Earnings per share increased to Rs. 4.45 from Rs. 3.74.

The company also generated free cash flow from operations of Rs. 12.63 crore during FY26, supported by strong operational performance, improved inventory management, and better receivables control.

A major highlight of the year was the significant reduction in debt. Following its successful listing on the BSE SME platform in January 2026, Digilogic Systems attracted prominent anchor investors and raised total funds of Rs. 69.66 crore. Of this amount, Rs. 8 crore was allocated toward debt reduction, resulting in total debt declining from Rs. 13.34 crore in FY25 to Rs. 4.06 crore in FY26. Consequently, the debt-equity ratio improved substantially to 0.04 times from 0.40 times in the previous year.

The company has also initiated Project Udaan, a major infrastructure expansion programme involving an investment of Rs. 51.74 crore. The project includes the development of a new 65,000-square-foot facility at TGIIC Hardware Park Phase 2 in Hyderabad. The facility will support electronic manufacturing services, environmental stress screening and qualification, subsystem-level integration, and capacity expansion of existing operations. Construction commenced in May 2026 and is scheduled for completion by May 2027.

In a strategic move to diversify its capabilities within the defence and aerospace sector, Digilogic Systems incorporated Abhedya Systems Private Limited on May 23, 2026, as an 80 percent-owned subsidiary. The new entity will focus on high-performance radio frequency and microwave engineering solutions and will undertake the design, development, manufacturing, integration, and supply of subsystems for radar, electronic warfare, and communication systems serving defence and aerospace applications.

The company reported an order book of Rs. 31 crore as of May 30, 2026. In addition, tenders worth nearly Rs. 110 crore are awaiting finalisation, while identified business opportunities under active progress are estimated at approximately Rs. 150 crore.

Commenting on the company's future outlook, Chief Executive Officer Shashank Varma Jetty stated that Digilogic’s test, measurement, and simulation systems have remained the foundation of the company’s growth for more than 15 years. He said the company is now entering a new phase of expansion with increased investments in research and development focused on future technologies. These investments will strengthen capabilities in radar and communication systems, electromechanical solutions, and high-reliability data-processing boards for onboard applications, enabling the company to diversify its product portfolio and expand into adjacent markets.

He reiterated the company’s commitment to delivering world-class technology developed and manufactured in India for the nation’s defence forces while supporting domestic manufacturing and self-reliance initiatives.

Based on the current order book and project pipeline, Digilogic Systems expects to achieve revenue growth of 25 to 30 percent in FY27, while EBITDA and net profit are projected to grow between 45 and 50 percent.

Chairman and Managing Director Madhusudhan Varma Jetty expressed satisfaction with the company’s performance, highlighting the strengthening of its financial fundamentals and operational capabilities. He stated that India’s defence and aerospace sector is undergoing a transformative phase driven by policy support, increasing domestic manufacturing, technological advancement, and expanding export opportunities.

He emphasised that opportunities in defence electronics, embedded systems, and high-reliability manufacturing continue to grow rapidly and noted that collaboration among industry, start-ups, micro, small and medium enterprises, and the armed forces will be essential in building a globally competitive ecosystem. He reaffirmed the company’s commitment to innovation, quality, and supporting India’s vision of becoming a self-reliant defence manufacturing hub.

With a strengthened leadership team, an expanding technological portfolio, major infrastructure investments, a growing order pipeline, and a significantly improved balance sheet, Digilogic Systems Limited is positioning itself to play a larger role in India’s rapidly evolving defence and aerospace landscape while pursuing accelerated growth in the coming years.