IdeaForge announced it has received the required approvals to stock and sell products in the US unmanned aerial vehicles (UAV) market. During its second earnings call for FY’24, the company discussed its plans for entering the new market as well as strategies for the Indian market. While answering queries, officials also talked about the company’s plans to integrate AI technologies in their drone equipment.
MediaNama went through the last two earnings call of IdeaForge to understand the developments in the drone sector at the national and international level. Towards the end, MediaNama has also included some key takeaways from the Q1 earnings call on drone-opportunities and challenges in India.
Key takeaways from Q2 earnings call
On entering the US market
IdeaForge gets approvals to sell drones in the US: IdeaForge received the necessary approvals to stock and sell products from its US subsidiary at the end of the latest quarter. According to Ankit Mehta, CEO of IdeaForge, the company is currently in the process of shipping its systems to the US.
“My expectation in FY ’25 and ’26 is to have the international business overall contribute meaningfully to the overall revenue… However, in this financial year, we should expect marginal movement there given that we have just started to enable the process of building the opportunities over there,” he said.
During Q1, IdeaForge had appointed three value-added resellers for the North American geography to build an opportunity base in global markets. These are individuals who receive the purchase order from the end customer and place a back-to-back order onto the company which then supplies to the customer via the resellers.
Focus to pitch flagship products: The company will be pitching its flagship products – UAVs or drones meant for surveillance, mapping and reconnaissance – in the North American geography.
“If you look at the North American geography, particularly, given that the fact that they have a lot of resistance presently towards the traditional markets from which a lot of the products that are deployed there are being phased out actually, progressively, we do expect a meaningful contribution from those geographies definitely in the two-to-four-year time frame,” said Mehta.
On plans for the Indian market and use of AI
Enhancing supply chain in the Indian market: While discussing strategies to improve the working capital cycle Vipul Joshi, CFO at IdeaForge, said the company is trying to bring the supply chain to the Indian market by improving the overall payment terms with local vendors and the size of business with existing vendors.
Drones to use AI for GPS-denied navigation: IdeaForge announced the development of an AI-supported quadcopter drone with GPS-denied navigation features. This means that the drone will be able to navigate environments where GPS is unreliable or unavailable, like underwater, indoors, dense urban areas, signals-jammed regions using data that the drone collects.
Stating that the company intends to leverage open-source AI, Mehta said, “We are trying to infer the world more accurately with greater precision, and that’s what our customers want that the environment that they are observing can be interpreted by the system on its own. And therefore, we will be leveraging [open-AI and generative AI] capabilities wherever we can help aid the inference from the imagery that our systems capture more effectively.”
Some interesting takeaways from the Q1 earnings call
Civil use of drones will soon overtake defense usage: IdeaForge stated that the global trend in the drone sector suggests that civil use of drones will overtake defense use in the next 2-3 years.
“If India were to follow suit, even if with a lag, we do expect that civil side of the opportunity will also be large. However, we may not be addressing all of the buckets in the civil side of opportunity,” said IdeaForge.
Law enforcement and security as large buckets of opportunity: Regarding opportunities for companies in the civic sector, IdeaForge said it considers law enforcement and various security forces as “one large bucket of opportunities.” The next “bank of opportunities” is for mapping applications particularly where land surveying is involved.
“The opportunities in certain other segments with respect to mapping and inspections are growing increasingly from that point of view. And also the plan that we have with respect to looking at logistics as an opportunity, particularly for middle mile operations, as we disclosed as one of our strategies, is again an area we expect to be able to address a very large and sizable market opportunity,” said IdeaForge.
China’s export restrictions do not affect IdeaForge: One of the stakeholders asked the management about the recent China restriction on export of certain components required for UAVs and its impact on IdeaForge and India. Responding that the restriction comes from a data security standpoint, the management said that IdeaForge has a longstanding policy of not sourcing components for their data-related subsystems from certain regions.
“[The restriction] is also something which we planned for as it was a restriction that was emanating in the US market as well, where they have a very clear policy called National Defense Authorization Act, under which they do not allow drones that contain components which carry data from certain geographies to be inducted into their forces,” said the management, concluding that the move does not have any impact on the company. However, from an industry perspective, the company said the restriction is likely to have an impact since a lot of players use components related to data with Chinese origin.
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