Ladies and gentlemen, good day and welcome to BEL Q2 FY 2027 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Singh. Thank you, and over to you, sir.
Thank you. Good evening, everyone. A very warm welcome on Bharat Electronics Q2 FY 2027 results conference call. On behalf of ICICI Securities, I would like to thank the management for giving us the opportunity to host them. From the management side, we have with us Mr. Manoj Jain, Chairman and Managing Director, Mr. Damodar Bhattad, Director Finance and CFO, and Mr. S. Sreenivas, Company Secretary. Without taking any much time, I will hand over to Manoj sir for his opening remarks. Over to you, sir.
Thank you. I will just briefly summarize the financial highlights for H1, means Q1 plus Q2 combined for the years 2026/2027. The revenue from operations increased to INR 12,824 crore up to Q2, as compared to INR 10,180 crore, with a growth of 25.97%. The profit before tax has also increased to INR 3,467 crore up to Q2, as compared to INR 3,023 crore, with a growth of 14.66%. The profit after tax is increased to INR 2,589 crore up to Q2, as compared to INR 2,255 crore previous year up to the same time, with a growth of 14.80%. The EBITDA up to Q2 is 27.43%. The earning per share is increased to INR 3.54 up to Q2, as compared to INR 3.09.
The order book position as on 10/1/2026 is INR 68,717 crore, and orders acquired till 10/1/2026 in this financial year till now is INR 7,334 crore. That is a brief financial highlights of H1, which includes Q1 and Q2 combined. That is a brief from my side.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Yeah, hi. Good evening, everyone, and thanks for the opportunity. First of all, congratulations for a very good set of numbers. Two questions from my side. The first one is with respect to QRSAM. If you can mention when can we expect to get this order? Recently, one of the companies in their con call mentioned that there is a chance of QRSAM being allotted to private companies as well. Any thoughts on whether our share that we have been mentioning around INR 250 billion would see a decline because of that? That is the first question, sir.
Yeah. So, as you know, QRSAM was developed jointly by BEL and DRDO. BEL was the nominated production agency, and we invested during design phase also. So a lot of learnings have gone in last 10 + years. I think roughly it is started in 2014. Then we have submitted our bid based on the RFP issued to us. As such, and based on our inputs also, order is expected on us very shortly. Hopefully, in next CCS, they may clear. They are clearing one by one all the big projects. So hopefully, we may get very, very soon this order. Private company wala rumor, I think that was mainly because there was one statement somewhere that all the missile orders will be now open to private sector also. But QRSAM is not missile alone.
It is actually a complex missile system, where missile is only one portion of the total project, but it is a complete area defense system. It is an air defense system consisting of different type of radars, launchers, communication systems, interconnection of this, and connecting this to the backbone. So overall, it is a complex system of system, I should say, and for which the expertise are acquired over a period of time by BEL right now. So, I don't think at this point that private wala thing is possible. Technically, may not be definitely because it is a period of 10 to 12 years of cumulative experience of this type of complex system of system, which we have developed over a period of time. Of course, our guru is DRDO, jointly with them only, but we had put our R&D teams from day one in this program.
This program, as of now, and more than 99%, I am confident it is coming to us very soon. But in future, if Government of India decides and if private sector comes up to that level, definitely there will be chances of getting different type of orders to them and may start with some missiles as told in some of the public statements and later on migrate to complex systems also. If private sector comes up, it will be a really win-win over a period of time. I hope I have answered your question.
Mr. Dixit, are you there? As there is no response, we move on to the next participant. The next question is from the line of Umesh Raut from Nomura India Limited. Please go ahead.
Yeah, hi team. This is Umesh Raut here from Nomura. Congrats for very good strong operating performance in second quarter FY 2027. My first question is pertaining to Next Generation Corvette. Given that the contract was now signed with GRSE and Goa Shipyard yesterday, how soon we can expect subsystem level awarding for advanced sort of weapons, sensors, and navigation for you, and whether that awarding will happen on a competitive route or a nomination base? And given that I think now total ordering contract size has increased from about INR 38,000 crore to INR 53,000 crore, do we anticipate incremental changes in terms of ordering size for us?
Yeah. So at least one good news was out of the three big programs, which I think last quarter, we, on call also we discussed the NGC, P75I, and QRSAM, and all the three have some good stakes of BEL. So at least NGC is cleared, and it was signed also by the parent PSUs, GSL and GRSE. We are in touch with them. We already were in touch with them for items which BEL has to supply to both of them. Because those items, as it was told, was developed over a period of time, and now it is technically called buyer nominated equipment, but it has gone through all the processes of multi-vendor and then capability and then functionality, adding, adding, and now only based on the commonality, it was decided to become so-called BNE. So buyer nominated equipment is also a very, very long drawn process.
In this project, there are so many buyer nominated equipment, and those equipment we had given already our BOQ at that time to both the shipyards. But the formal order from them will now start formally. That may take, let me tell you, one day to six months. That is a variation because there are different line items. For different line items, there will be different type of so-called negotiations or terms and condition finalization, et cetera. I cannot tell you exactly when I will have last order of NGC, but technically it may start even tomorrow also. The first order may come even tomorrow also, which will be very small value, but a small value to big value. Total, I am expecting within next six months--
Financial year.
--before this financial year closure, all these orders from both the shipyards will be there with us. Tentatively, we had, I think, indicated around INR 20,000 crore worth of order. We are sticking to the same value only. Based on our estimate, our discussions with these two shipyards, I think we may get order of this tune only. Around INR 20,000 crore worth of orders. We are expecting in a staggered way, but all of them, 99%, will come in this financial year. As of now, it looks that there will be no slipping of one or two line items. But again, we hoped even for QRSAM also last year, we may get by March, but some slippages because of procedural terms, conditions, some discussions happens, et cetera, happen.
Maybe one or two line item may slip, but as on today, it looks like all the line items of NGC, we may get order before March.
Understood, sir. My second question is pertaining to execution growth. Given that we have mentioned in annual report that we will grow at about 15%-20% in FY 2027 at top line, and given we have achieved 26% growth in H1 FY 2027, would there be any upgrade in guidance for FY 2027 in terms of revenue and even at the margin level?
No. Let me tell you, the thing is, although the growth looks 20% + overall till H1, but that is based on our strategy of making as much uniform our production as possible across quarters. You all may be knowing, generally, last quarter we generally perform better. We, not only we, with all other our partners, MSME partners and other partners also, the January to March productivity is a bit more than other quarters. But we are trying to correct it so that we give efforts and our supply chain partner also give full efforts for each quarter by quarter. So definitely, we have done that type of efforts to see that all the four quarters are more even. So because of that, it looks 25% and 26% looks very good. But overall, we are planning, as of now, between 15%-20%, more than 15% growth.
That only we are expecting. If something more comes, it will be a positive surprise for us also. But as of now, we are planning that only.
Understood, sir. If you can give us some color beyond FY 2027 as well in terms of execution growth, how one should look at, especially given that QRSAM contract now got delayed by almost seven, eight months vis-a-vis our early expectation. Do we anticipate early recognition from the program in anticipation of this program? Have you started any work and so that we can reduce timeline to recognize revenues and we can post probably FY 2028 itself some part of execution from QRSAM? Any color on execution beyond FY 2027?
Definitely. Generally, these type of discussion we do in April con call, because there we will tell with more quantification about next three years what is our projections. But yeah, we review our yearly plans of next three years at every quarter also. But the more concrete data we have at that time. Anyway, once you have asked this question on QRSAM, let me tell you, we have started proactively good work on QRSAM, QT and FOPM realization-related activities, knowing the sensitivity of the program and geopolitical situation around. So, we are confident that once we get the order, we will try to squeeze few months definitely, right? As of now, it looks like at least few months we will escalate ourselves. So few months plus we may get, but overall how much it will impact our yearly targets, today it may be too early to tell that.
But definitely we are very, very serious on this QRSAM program execution.
Thank you so much for this detailed answer. I'll get back to the queue. All the best and happy Diwali, Manoj.
Thank you.
Thank you. The next question is from the line of Dipen Vakil from PhillipCapital Limited. Please go ahead.
Hi, sir. Thank you for this opportunity and congratulations on a great execution and margins. My first question is on the lines of your current order book. Can you help us with the breakup, a slightly detailed breakup of your order book project-wise?
Actually, again, it was already told. We have around 300+ projects for execution. Only the major projects only I will let you know.
Top projects we will just tell you. Electronic fuzes is about INR 4,200 crore. LCA Mark 1 is INR 3,200 crore. LR-SAM is INR 2,900 crore. BMP-2 upgrade is INR 2,600 crore. Ashwini radar is INR 2,500 crore. Electronic warfare suite for Mi-17 is INR 2,200 crore. And one export order is there, which is for INR 1,700 crore. These are the major orders on 1st October.
Got it, sir. My second question is on the lines of order inflow. In the first half, the order inflow has been roughly more than INR 7,000 crore. How do you expect second half in terms of ordering to happen and which could be the major projects that you are expecting apart from QRSAM and NGC, which could help us say sustain our order inflow above say INR 20,000 crore or INR 25,000 crore?
Yeah, definitely we are fully confident. Whatsoever guidance we have given to you at the year start, we are going to meet or exceed that. NGC has come anyway as a big project. But some three, four more projects which are there in pipeline. Shatrughat and Samaghat files have moved considerably well, and we hope to get both the orders one by one before March. HAMMER also hopefully we may get before March. So these three orders confident to get. Then some other orders are there which are of smaller value. P-75I also I am not sure right now whether it will also be cleared. P-75I maybe, as per my guesswork, NGC was the first, second maybe QRSAM, third maybe P-75I. So maybe P-75I may slip to next year.
I am not fully sure, but if it comes in this year, it will be a pleasant surprise for us also, because we have, again, there also lot many line items are from BEL. But that is brief from my side.
Got it, sir. So right now the major order remains QRSAM, NGC, P-75I maybe next year, and without that also we are looking at say INR 15,000 crore -INR 20,000 crore of order win?
Yeah, yeah. So total INR 25,000 crore without QRSAM, and with QRSAM INR 55,000 crore, which was our guidance. We are sticking to that.
Got it, sir. Thank you so much and all the best for second half.
Thank you.
Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Thank you very much for the opportunity. Sir, my first question, just a bit of a clarification. This INR 20,000 crore that you mentioned for NGC, this would include MRSAM thing as well, right? Or this is only the electronics portion?
The electronics portion is radar also. So there is a MF-STAR radar, so that is also part of this, not the missiles. Missiles are excluded. All the electronics, and electronics means communication equipment, EW equipment, and radars. All put together, the number which I have shared with you, roughly INR 20,000 + crore , we are expecting orders.
Understood, sir. Secondly, on competitive bidding in the nomination share, I believe roughly 90% of the order book right now is on the nomination basis. But we have seen a lot of private players, including Adani Defence also, getting active across radar, electronic warfare systems, as well as missiles, as you also mentioned. Would you be able to tell us how much of the FY 2028 and FY 2029 pipeline will be competitively bid, and how pricing and margins in those bids would compare with the nomination-based orders?
Let me tell you, whether it is nomination or competition, more or less similar margins will be there. In nomination, we don't get higher margins, you know. How we will win or how we win is based on uniqueness of our product and the indigenization content, which has developed over a period of time in our technology. That only differentiates us from others. Let me again tell you, whatsoever nomination you see today, it was actually started with multi-vendor competition, and we became L1. Then only when the product was good for the next ship or next order, they go for BNE, buyer nominated or nomination happens. Hardly any nomination on this domain has happened because of other reasons.
It was based on the capability developed over a period of time, and indigenization and other benefits which we passed on to our customer also. Because of that only, we are still retaining some of the so-called nomination status. But definitely, the uniqueness is because of our R&D and our indigenization. The unique solutions for their customized needs, which we have understood over a period of time. That definitely is a unique selling point for us. And with that, we will be competitive, and we will have similar margins, let me assure you.
Understood, sir. Thank you very much for answering my questions. I will come back in the queue.
Thank you. The next question is from the line of Amit Anwani from PL Capital Limited. Please go ahead.
Hi, sir. Thanks for taking my question. Just one clarification. You said, currently you have roughly about INR 8,000 crore inflow, and this year base order, including Shatrughat, Samaghat, and HAMMER, we are expecting INR 20,000 crore-INR 25,000 crore. This NGC INR 20,000 crore is over and above the base orders which we are expecting, and will it be in phases?
No, no. NGC order was included in this INR 25,000 crore, because in the start of the year also, we clearly told, including QRSAM, we will have INR 55,000 crore, excluding QRSAM, INR 25,000 crore. In this INR 25,000 crore, major portion will be NGC. As I told, if we get all of the NGC orders before March, then definitely we will give a positive surprise to all of you. But as of now, that I told, six months. So, from November, December, January, February, March, some order may slip to April also. That is our estimation. So, if that slips, even then we are comfortable with our other orders in hand. We are definitely going to cross INR 25,000 crore. But if NGC, all the orders are converged before March, then definitely we are going to cross INR 25,000 crore, excluding QRSAM.
That's why we are retaining our guidance, and we are confident, and we are putting all our efforts to converge on all these nine items, including NGC, different eight to 10 line items. So, we are confident, but guidance point of view, we still want to stick to INR 25,000 crore and INR 55,000 crore only.
Right. So, if this happens, then you will be crossing by large margin if NGC orders come in next four months.
Certainly, certainly.
And sir, in terms of timelines, what will be the timeline for NGC for your execution, and also timeline for the few large orders which you highlighted, which are part of the order book, including the fuzes, LCA, BMP? That will be helpful.
Except fuze. Fuze is only now remaining, I think, six to seven years more. Remaining all orders are next three years, typically, three and a half years only. All other orders we are going to execute within that time. And NGC also, I think it is for around four-plus years, which we will take to execute after getting this order. Depending upon the ship construction plan, actually. It depends upon GRSE and GSL, and I hope they are taking help of so many MSME and other vendors to speed up their so-called production and integration of all these electronic systems. They may ask us to prepone. In that case, we may have to supply next three to four years. But we are not finding any challenge in production of these line items, because these all line items are well in our production pipeline.
There are no surprises. In case they want to prepone it, we can definitely execute it. But that all depends upon in next few months when we get the confirmed order. With that order only, we will know the exact delivery dates, what they have negotiated with their principal customer, and how much they want to pass on to us timelines. But hopefully, three and a half to four years is the maximum execution timeline for my NGC orders.
Right. Second, sir, on drones, there's been lot of talks about very strong pipeline. Where are we in terms of I think you also talked about working towards counter-drone systems. Just wanted to understand how Bharat Electronics is shaping up in terms of the drone-related products like kamikaze or counter-drones. If you could brief on the drone side and any prospective pipeline we are looking on the drones.
Yeah. As you rightly told, this is one of the big business growth area for any company, including BEL. So many other private sector companies, startups are there in this particular thing, but there is a scope for each one of us. Because type of drones requirement, you might have seen also in the recent conflicts, how much and different type of drones are required. Surveillance-related drone, kamikaze drone, 1,000+ km drone, 2,000+ km drone. So those type of things are there. Drone over drone catching drone. So like that, there are hundreds of use cases, including logistic drones, like that. So there are hundreds of use cases are there, and in the market, there are very good so-called initial products, I should say. But those initial products have to convert into a reliable supply chain-based product with enough hardening.
So BEL is working with lot many startups, as well as has its own in-house programs, to see that we give reliable, trustworthy solutions which can test the forward area or jamming area type of environment also. So we are working very, very closely with six to eight startups right now. And they have come up with a technology, great technology, of course. But this type of a regularization or making it more and more robust, we are doing, and we started bidding also. Few orders we have got this year also, but that orders are of the order of INR 50 crore, INR 100 crore type of things. I am looking at some bigger orders in next one year or two-year timeframe of the order which we can tell in investor's call also.
Because INR 50 crore, INR 100 crore orders we don't want to even discuss in the investor's call, and you also may not be interested in those type of things. But definitely, I hope next year we may get at least one or two big orders in this based on our six to eight big leads and big tie-ups which we have done with the startup community. I am confident this will yield us very, very good business in years to come. And same thing is about counter-drone. Counter-drone, luckily, last three to four years, we have established ourselves as a reliable supplier of high-end counter-drone systems. So high-end means which is having hard kill options also. In that hard kill option, now we are adding microwave DEW based on our own in-house efforts as well as our DRDO efforts. So that we are adding.
We have got very good leads for some of the foreign countries also. We have successfully demonstrated our counter-drone solutions, which are quite unique at world level also, and very, very cost-effective. So we are hopeful to get good export orders very soon, because very good developments, very good trials were concluded. So we are hoping we may get good counter-drone solutions for exports. Overall, drone and counter-drone definitely is one of the most focused area. After our missile, arms, and ammunition, the second most focused area for us is drone and counter-drone. And we may give you very good pleasant surprise during Aero India also. We may launch a few products at that time, let me assure you.
Thank you, sir, and all the best. Thanks.
Thank you. The next question is from the line of Pinakin Parekh from HSBC Bank Limited. Please go ahead.
Yeah, thank you very much, sir. My first question, again going back to the QRSAM. On that INR 30,000 crore order, sir, what will be the value in your estimate for the core missile manufacturing, which possibly could be opened up to private sector? Because BEL will not be manufacturing missiles, right? It will be manufacturing the systems around the missiles.
Yeah, definitely. Right now, we are not manufacturing big missiles, but a few missiles we have started manufacturing also. But not QRSAM missile, let me tell you. QRSAM missile was developed by DRDO jointly with BDL. This question actually you should refer to BDL, that how they will take this challenge. But based on the available information and public domain, I think their QRSAM missile was not there. They have written some four or five missiles names that these missiles DRDO is opening up for private sector, which may take private sector also some time to absorb. But I don't think QRSAM missile was there in that list. But anyway, that question you specifically ask to BDL, because as I told, for us, QRSAM is a system of system with large complex radars, communication system, interconnection of all these launchers and missiles.
As of now, BDL is the design partner for DRDO for QRSAM missile. In case DRDO changes their plan or something happens, I do not know as on today, then that missile capabilities, if other fellow develop, it may be splitted to them. But definitely at that time, BEL also will come and pitch in because BEL also has, over a period of time, acquired enough knowledge, enough infrastructure for the manufacturing missiles. Let me again assure you, reasonably good infrastructure there even for QRSAM missile also. If government decides, we are capable of manufacturing QRSAM missiles also. But right now, our official LRLACM and Pralay missile, we are the DcPP partner for DRDO, and we expect some orders in future for these two missiles.
Then there are some three, four more missile programs which are strategic in nature, so we are just involving ourselves with the design agencies for those. But these two anyway had come to public domain also, where we are the formal DcPP partner. Definitely, we are putting missiles also as one of our focused area of development, because missiles, you may be knowing, actually 60%-70% of missile is electronics. The cost of missile, 60%-70% goes in missile electronics. Remaining only goes into other two major components. So, the biggest component, I should say, of missiles is electronics, and where we have proved our strengths now. Okay?
Got it, sir. Just continuing with the QRSAM program, you mentioned in the beginning of the call that you do not see the private sector, at least in this first INR 30,000 crore order to be part of it, maybe going forward. Sir, do you see the QRSAM program or variants of this come through again and again over the next few years as India builds out its air defense system beyond what it is going to be on offer?
Definitely, yes. We told earlier also, this is the first order. Whatsoever we are going to get will be the first order. Like Akash system, you just see the history. The first order, I think around 20 years back, roughly, we got. After that, we are going to get multiple series orders. We already got some three, four series, and two, three more are there. Because with every three to four year or five year, some technology refresh happens, some extra enhancement happens for the same technology. There will be, based on the political and geopolitical, sorry, geopolitical situations, there will be requirements for strengthening more and more. You all have seen the recent conflicts. The two hot things in the market which are required by everybody in the world is drone, obviously counter-drone, and missiles.
For these two markets, definitely very, very big markets are there for these two segments. We are also working seriously to capture as much as we can in these two domains.
Got it. Thank you very much, sir.
Thank you. The next question is from the line of Subramaniam Yadav from SBI Life Insurance. Please go ahead.
Thank you very much, sir, for the opportunity. If you can update us on the AMCA project. I believe the bid submission date was end of October. If you can give us some color on that.
Yeah, why not? AMCA is one of the prestigious projects for us. As we have told earlier also, we have done this bid jointly with L&T. L&T being front-ending, and we are giving them full support in a 50/50% consortium basis. We have already submitted the bid. As per our internal estimate, it is very, very competitive bid. So we are hopeful to be L1 after technical evaluation, and then the bid will be opened, and we are hopeful we will be L1. That way, we will jointly with L&T, means the private sector, it will be a really good model of public-private partnership, which we are really working for this program and many more future programs. We also are now aligned ourselves to this type of public-private partnership. You can ask L&T how their experience is in their investors call. I do not have any issue.
But our experience of working with L&T is really great and very, very accommodative. Both sides sat together multiple times, and I hope we have given a very, very optimum solution or optimum bid to the agencies, and we are confident we are going to win.
So when can we expect the outcome of this?
Pardon? Can you repeat?
When can we expect the outcome from this bid?
Again, it is a guesswork only because that is the other side. The DRDO has to decide on that because as you know, ADA is the agency who had floated this RFP for selecting one of the partner. Typically, again, it is my guesswork, it may take two to three months of technical evaluation because still we have given lot of details, technical details were asked, and we have given all three of us different consortium. Because it is a big project, I expect two to three months of technical evaluations, and then they may open the price bid. Hopefully before March, and we may get a positive surprise.
Okay. Thank you. Thank you very much.
Thank you. The next question is from the line of Jyoti Gupta from Ashika Institutional Equities Limited. Please go ahead.
Thank you so much for the opportunity. I have a couple of questions. One, that following the approval of 8 Next Generation Corvettes, how much of the estimated INR 70,000 crore-INR 75,000 crore program opportunity could actually accrue to BEL through combat management systems, radars, electronic warfare suites, and communication equipment. When should we expect the first order to materialize, and what would be the likely timeline? Second is, we know that there are a lot of work which is happening in terms of fixed-wing HAPS. What is BEL's role in the Indian Air Force high-altitude pseudo-satellite program, particularly in communication surveillance payloads? Because looks like this is going to be the most important technology in the future.
My third question is that, in small platforms or contracts that we have received, specifically on the low-level lightweight radar order, which is INR 770 crore from the Army, does this radar have additional export potential, and could the program lead to follow-on orders for deployment across additional Army formations? Last is the INR 1,251 crore Ground Based Mobile ELINT System, which BEL has secured from the Indian Army again. Is this a standalone deployment or part of a larger networked electronic intelligence program? Could there be an additional order for similar systems?
Yeah. Although you were supposed to ask only two questions, but anyway, I will answer them.
I am so sorry.
No issues about me, but others may object, I don't know. Your first question actually is a repeat question, I should say. I had answered it that NGC different line items, you also mentioned all line items beautifully. It may take one day to six months.
Okay.
Overall time, I can't tell right now because we are in discussion with both GSL and GRSE. Some similar discussion we already had done in March itself. In the month of March, we thought we may get order. Quite good homework is done. Based on that only, I'm telling it may take one day to six months of different line items to convert into confirmed PO on us.
Okay.
Now, second question about HAPS. HAPS is a very good program. Multiple usage will be there. But as per my understanding, it is still maturing. It is not a matured solution. It is still maturing. When it is maturing, there are multiple technologies. One is even DRDO developing, one is even CSIR lab is developing. Then there are some Indian companies also are there in the race who claimed that they have this capability. But we are closely watching all of them, let me tell you. Because I feel still we don't have matured product. This is our assessment. Maybe we are wrong, but our assessment is it's still maturing, so we are careful in selecting a right partner so that my development risks are minimal and my winning probability is more in that program.
We are in that process of selecting a right partner for HAPS.
Okay.
Okay. Regarding the INR 770 crore project.
Yeah.
That project, we are going to execute quickly only. This is technically, there was similar order earlier also, so based on that experience only, we are confident we can execute this. We strategically don't disclose whether we are going to export any product by name until we get the order. As such, my side, no comments about whether this radar I can export or not.
Okay.
Okay. I hope you understand that.
Yes, sir. I do, sir.
Same thing is about GBMES. GBMES for Army, we have got the order, very good order. It is very much strategically required. Its deployment is kept confidential always in this type of EW programs. Let me tell you, all the products which we give are generally very agile, which can meet different type of terrain or other requirements. Always, nowadays, we are giving solutions which are networkable. That is our basic thing. Like, every product should have AI, and every product should have a networkable feature. Means it can be networked with another system. These two features, I think for last five years, whatsoever programs we have developing, at least these two features are there in any program. Because without this, in today's war scenario, nobody would like our equipment to be-
Exactly.
These two features are always there in our thing. How it will be exploited or not exploited will be depending upon end user, and that will be definitely a strategic answer which finally end user only keeps with him. They even don't disclose to us also. How they are effectively using in operation depends upon them. We don't dictate or we don't control that. Let me again assure you.
Okay.
Hope I have answered all four questions.
I just want to ask, could there be an additional order for this? Because, right now-
Yeah. For all EW also, actually EW-related projects, you might be seeing now very, very increased requirements because overall the environment, EW-wise also is very, very hostile.
Yes.
Technology has changed so much in last five years also. You might have seen 3G to 4G to 5G to 6G. That is only about communication. Same thing is in radar also, the technology is changing so fast. EW mainly is for radar and communication systems jamming, mainly. Okay, so once the technology has changed, requirement of these type of EW systems is ever increasing now.
I just want to know, are these agile in hostile, like the technology is agile enough to interpret or let's say withstand the changing hostile environment? Or does it like it is standalone or, [Foreign language].
Again, you are asking a strategic question--
Okay, fine.
--which I will not answer--
Okay.
--for this project. But I will again tell you, in general, all projects which we are supplying, in general, they are highly agile, highly networkable, and highly deployable in different terrains.
Done. Okay. Thank you, sir. Thank you so much.
Thank you. The next question is from the line of Ajinkya Jadhav from KRIIS Portfolio. Please go ahead.
Thanks for the opportunity. My first question is regarding an MoU that BEL has signed with MIDHANI and BEML for advanced steering and control system for heavy-duty combat vehicles. What is the status on this program, and has it moved from the developmental stage to the commercial procurement?
This was a very, very challenging futuristic project, let me tell you, developing this type of a critical technology, where our portion was mainly electronics. MIDHANI portion was mainly materials, and the BEML portion was mainly the basic so-called engine control. We had done our first level study and found that we are capable of developing this as a technology. But this technology requires much more larger investments, and that investments are possible with some investment from our side and some in the form of grants. We are just sitting together, all the three companies, and how to fund this project. Because when the large investments are there, although technology has to be developed, but we are looking at some technology development funds or some other funds from Government of India for developing this critical technology. Right now, it is in that phase of finalizing.
But technology understanding, complexity, and what type of investments are required, that homework jointly we have completed.
Got it. My second question is regarding the indigenization of the materials that we require. Are there any special alloys or steels that we still import that can be indigenized with the help of MIDHANI, the local player? Is there any scope we can increase the percentage of indigenization with the help of local player for the RM procurement particularly?
Understood your point. This point is more related to HAL and other companies, even shipyards, because they actually use these materials much more. For us, electronic material is more important than the so-called mechanical materials, like steel or alloys, et cetera. Hardly in our product, 1% or 2% is the material cost of these type of things, because ours is mainly electronics. Whatsoever small requirements which we have, it is always shared with MIDHANI, and most of this is shared on the SRIJAN portal also, so that indigenization can be done for that. Because our volumes are not much, I do not know whether what priority private sector or MIDHANI is doing for that. As such, this is not very, very critical. For electronic system, these mechanical subsystems are not that critical. There are multiple alternates available for us.
Like for engine material requirements are much, much tougher than so-called my electronic packaging material. For me, mechanical items are more of packaging or system engineering-related role they play. But in an engine or in an aircraft design, their role is 10 times more. The challenges for this material indigenization right now is shifted to, for us, is electronics material indigenization, and remaining we have left to MIDHANI and private sector through SRIJAN portal.
Got it. One more if I can, is on the NGC, what will be the new suite of a sensor versus the earlier corvette that we will be supplying in terms of sonar, radar, if you can throw some light on that, new systems that we will be fitting in?
Let me tell you, for every new program, some delta changes always happen, because technology is changing. Electronics, defence electronics technology changes so fast that some delta changes will be there. So, product name looks the same for you, but within that, there is a technological upgradation or some extra value addition which keeps being done. So, we cannot say it was the previous order, same only we are manufacturing. No, there are some delta changes based on the requirements, and that is a continual activity. All type of EW sensors, radar sensors, they are communication equipments, are there as part of every ship, and here also it is there. So, type of equipments look same, but technology-wise, there is continual upgradation from program to program.
Got it. That answers my question. Thank you, sir.
Thank you. The next question is from the line of Mohit Pande y from Citi Re search Private Limited. Please go ahead.
Yeah. Good evening, sir. The first question is on QRSAM. Sir, given there has been a delay, is it possible that the actual size of the order could be greater than INR 30,000 crore? Because I understand the INR 30,000 crore number was first spoken more than a year back, and costs have increased in the interim. Is that how it may play out? Yeah.
Generally, we also wish like that they give us escalations after the conclusion of price. But typically, as a government process, one year, one and a half years escalations they do not give. Until because of various reasons, the project delays too much, and we have to absorb that. Mostly we may not get any escalation, maybe barring if we are lucky, maybe some six months escalation. If they clear, very good. That will be a positive news for you and me. But as of now, I am expecting INR 30,000 crore order to come to us.
Understood, sir. Second question is around the missiles that you mentioned earlier in the call. I understand you are having an old MoU with Tamil Nadu Industrial Explosives and MIL as well. Are there plans to enter into ammunition or explosives also for the missiles?
Yes, yes. We have formally declared ourselves, and it is coming in our annual report also. This Tamil Nadu Industrial Explosives Limited is now owned by BEL. For the next 30 years at least, it is there with BEL. We have already done good investment there, and some of the missiles integration activity we have started there also. Definitely we have a very good understanding with MIL also, of course, so that some of the support for ammunition. Because in Tamil Nadu Industrial Explosives Limited, we have only hot integration facility, not the ammunition. We are having ammunition integration capabilities right now. Ammunition-making facility we do not have as of now, and for that we are depending on MIL and Solar Industries, and so many other companies have come up now.
Two, three more companies have come up in private sector also, who can give ammunition to us, and we are having very good understanding with a few of them. Ammunition per se, we are right now not there, but if strategically it is required and business demands are there, we can develop that expertise because reasonably we have some knowledge on that also. But as of now, our main focus is hot integration, means ammunition integrating within the missile. That itself is a great technology and a lot of safety and other security features and infrastructure is required for that. Presently, we are more focusing on that instead of developing ammunition per se.
Understood, sir. Last question is on the execution, 26% revenue growth despite a tough base. Any particular reasons that has led to such a fast execution despite the order book being, order backlog being down YoY? That would be the last question.
Okay. No, no. Order book, we are not worried right now because as we have told now, INR 68,000+ crore we are having, and hopefully INR 55,000+ crore we are going to get before year end. So order book, we wanted to execute as much as we can. Let me tell you, some of the We have now started our own time delivery score. We are improving a lot, and whatsoever we had committed to our own users, we are prepounding by another one month, two months type of thing. That's why you have seen this thing. Secondly, which I told earlier, we wanted to correct ourselves to give more uniform output across each quarter. So that correction also we wanted to do instead of loading ourselves in the last quarter and then having suspenses for all of you also.
We wanted to make it more uniform. So it is more of a correction of that as well as our fast execution speed. We don't want to delay now. Whatsoever delivery commitments are there, we wanted to extend one or two months this side only. We don't want to go to the other side, and we are putting all our efforts to see that our execution track record closes to 100% as early as possible.
That's heartening to hear, sir. Thank you so much and wish you all the best. Thank you.
Thank you.
Thank you. The next question is from the line of Atul Tiwari from JP Morgan. Kindly go ahead.
Yes, sir. Thanks a lot. Just one very quick question. I do not know whether it has been discussed. QRSAM obviously has been delayed multiple times now. Any color on, you know, what has caused the delay and, you know, are we still on track to get it, you know, over next couple of months before this financial year closes?
No, delay is not that much. We were optimistic last year. We told if we are highly optimistic that we may get by March. We knew in the month of January, February itself, the type of complexity of the documents itself, which was very, very huge, it may spill over. As CMD, I was optimistic and as I am always. The thing is, internally we also knew it may be minimum August, September only. It has not slipped that much. Yeah, I was expecting in the NGC time order, we may get QRSAM also. Anyway, when big, big orders are there, it takes its own time for the decision makers also. They have to sit together for each project one by one. We are hopeful in next CCS we may get positive surprise.
We are not alarmed by the delays right now. Anyway, as I told, we are compensating some of the delay by doing some advance action for the FOPM realization, for which we have done some good proactive investments related to QT and related to realizing this with our supply chain partners also. Actually, let me tell you, in this particular project, we have got very, very good support from our supply chain partners, whether they are from public sector or whether they are from private sector. Whether they are big private fellow like L&T or a small MSME vendor, they all are investing on their side itself so that the FOPM realization, the first of production model realization is done ahead of time.
That itself is a very, very good news for all of us that yes, in this program also, it is again a good model of public-private partnership where in this, the private sector, maybe around 200 + MSME partners will be there, and roughly around 70% of the orders which we are getting will be distributed across these 200 + MSME partners. Right now, they are done reasonably good investment from their side also. Based on this good ecosystem and good confidence they have on all of us, I am hopeful that this few months delay in acquiring order will not translate into execution. The execution we will be even faster than the expectations of users.
Okay. Thank you. Thank you.
Thank you. The next question is from the line of Sahil Karia from White Pine Investment Management. Please go ahead.
Yeah, thank you for the opportunity. Sir, could you just give us some color on the Virupaksha order that is going to come? Like, what are the timelines and what amount of order are we expecting?
Yeah. Again, this order we have got as a development order only right now. Production orders will take time because I think overall sanctions, proving a radar in an aircraft is a really a good challenge, let me tell you. That challenge is not only for Indian companies like HAL or LRD, it is equally applicable for even foreign companies also. Toughest, let me tell you, because I am also an R&D engineer, toughest is airborne platform qualification of any technology. Radar, which is very, very, very critical sensor for an airborne platform of Su-30 or LCA type, it takes its own time. So right now, we are just executing that development order and giving our LRU to LRD, and then integration and other things will be done by them. Overall timelines are being decided by LRD for this program.
We are confident maybe around 2028, 2029, we may get production orders for this radar.
Okay. Okay, thank you, sir. The next question is on the missile seekers that we manufacture and develop. Could you just give us a list of all the missiles for which the seekers are being supplied by BEL? Because I believe for some key missile programs like BrahMos and all, BEL doesn't supply the seekers. Also for the ATGMs that we manufacture indigenously in India. Could you just give us some color on that? What is the quantum of orders that we can expect going forward?
Yeah. Seekers are of two types mainly. One is RF and one is IR. So we are in IR and RF, both type of seekers, let me tell you. As you had observed rightly that we are not there till date in BrahMos seeker. We are there in some other missile seeker programs like Akash, Astra, and others, but not BrahMos. But we know the technology for BrahMos seeker also. So proactively, we had started developing that seeker also. Because they are in different band, different sizes, different specs are there for each and every seeker program. But we have now capability to develop ourselves these seekers, because you may be knowing present seekers were actually designed by DRDO. They were our guru, but system engineering and some of the critical components in BTS mode was developed by BEL.
But over a period of time, we have developed good confidence to have these type of seekers end-to-end by us. We are doing. If I am not wrong, ATGMs typically have IR seekers. IR seekers are again used for various applications, and we have very good strength in designing IR seeker. Although, of course, our first IR seekers are again from DRDO, but we are developing strength for developing our own IR seekers also. And we have a very good manufacturing setup for these IR seekers at our new factory in Machilipatnam, near to Machilipatnam, Nimmaluru. There we have created a very good state-of-the-art I4.0 compliant infrastructure for these IR seekers manufacturing. Overall, we are increasing our role for different type of missile programs, the both type of seekers, DRDO designed, DRDO designed and upgraded, and our own design. All these three things we are there.
And let me tell you, seekers also, mostly in many of the missile programs, have 20%-30% of the cost of the missile is actually seekers. Very, very critical, most costliest component. We are eyeing a high business volume. You may be knowing for missiles and drones, as I told, huge requirements are there in India and even abroad also. And each missile nowadays will have seeker. So, seeker also, if you have missile business, if you estimate X, typically 0.2-0.3X will be the seeker business within that. That much only I can tell you.
Just to follow up on that, like, what could be our capacity of seekers? Like, how many seekers can we manufacture at our facilities in a year? If you could just give us-
Combined IR and RF seeker, 1,000 + we can make easily right now. And if need arises, we can scale it up if required to two to three times more. Because as you may be knowing, seekers are like radar. RF seeker is like radar, IR seeker is like my IR camera. Technically, technology is more or less similar. So, we have good technological understanding of this subject, and because we have a large infrastructure for radars and for IR-based sensors, which can be converted very quickly to the seekers requirement. As such, infrastructure-wise, we are not having any bottleneck for both type of seekers program. But as and when need arises for scaling up, we are ready for that. We don't see any challenge, but right now, combined strength of 1,000 +, we definitely have.
Okay, sir. Okay. If I could please one more question. Do we expect any good amount of orders in the EOIR segment for the drones as well as for the direct energy weapons that we are developing?
Yeah, EOIR also is always a very, very strategic and good technology to be there. We have developed over a period of time a very good strength for EOIR. As I told, these are required for seekers, it is required for cameras, it is required for drones, it is required for multiple places. So, we have various programs how to increase our presence in this EOIR segment. Critical technologies in our control except detector. The basic detector still is not totally in our control, which jointly with DRDO we are working. Very good progress has been done for the basic detector. But barring the detector, all other subsystems, signal processing, optics, we have very, very good strength. So, we can make multiple type of solutions based on this so-called critical technological components. I don't see any challenge in that.
But yeah, detector, there are challenges which we are overcoming jointly with DRDO.
Sir, on the DEW weapons, are we into RF DEW, like HPM, high-power microwave weapons, or laser weapons? Which type of weapon are we developing for the direct energy?
Both types of weapons we are developing, microwave as well as laser-based. Laser, the original technology is from DRDO, and microwave also right now the technology is from DRDO only. But we are exploring other options, including our own in-house options for developing different types of DEW weapons. Because again, it is an ever-changing field. Every six months, some new technology comes. So, we thought, although we are supporting our DRDO friends very well, but why not develop some in-house strengths also? So, some of the proactive R&Ds we have taken, both the domains, with our own in-house teams, as well as we have seen some of the good startups also have come up in these two niche technology domains. So, we are working jointly with them also.
Overall, we have all the three approaches, and we are confident that some good solutions we will immediately offer to our customers, other than what we have already offered to them.
Okay. Do we see any orders coming in, like, or any-
Sorry to interrupt. Sorry to interrupt, Mr. Karia. I would request you to join back the queue for more follow-up questions.
Operator, we will take up the last question, please.
Yes. The next question is from the line of Umesh Raut from Nomura India Limited. Please go ahead.
Yeah. Hi. Thank you for follow-up question. Sir, my question is pertaining to more of a strategy that probably the Indian forces can adopt, given that probably in future or currently as well, we are seeing multiple cybersecurity-related threats in other sectors. We have supplied very large install base of defense electronics products historically to all armed forces. So, how do you see this opportunity in medium to longer term kind of planning for BEL? At the same time, probably if you can also give us color on possible upgradation of IACCS system that Indian Air Force is looking for, and expansion of IS further north as well.
You told you will ask one question, but actually you asked three questions. Anyway, I will try to answer as much as possible, because it is the last question. Cybersecurity, as you have rightly told, it is need of the hour. As a technology, we understood this need at least 25 years back. We opened a basic research on cybersecurity at our Central Research Laboratory 25 years back. We had created group, and they started developing niche technology, which are underlying technology for this domain. Today, what's our C4I solutions which are in field, the cybersecurity component of that is developed in-house by BEL, let me assure you that. There is a good requirement of these cybersecurity solutions for non-defense also. So, defense, let me tell you, we have very good solutions which are already in place.
But non-defense, because the technology is changing, because the networks are evolving for non-defense critical infrastructure, so many, so there how we are focusing as an extra focus or as an extra business opportunity. That's why we created this new SBU itself, Network and Cyber Security, as a separate SBU in our Bengaluru complex some two years back, now two and a half years back. They started giving very good results in so-called civilian domain also, cybersecurity-related things. We have got good orders. I think right now also we are executing something like INR 400 crore-INR 500 crore worth of orders in the cybersecurity civilian domain. Opportunities or good leads which may convert into a good business of thousands of crore in the pipeline. So we know the importance of cybersecurity for civilian domain.
And defense domain, it doesn't go as a line item, but it goes as an inbuilt package for our C4I solution, as part of our C4I solution. So we are definitely in that domain, and definitely there is a good growth prospectus for that. IACCS next version, I want to avoid the answer because it is strategic in nature. That's why I- But let me tell you, whatsoever our users are expecting for future IACCS, we have developed those critical technologies already. Okay. I hope I have answered whatsoever I could.
Thank you. Thank you, sir.
Thanks. Thank you.
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Yeah. Our closing comment is the same as our starting comments of the year. We are going to meet our guidance given at the start of the year. We are working for that. Revenue growth of 15%+ although there may be some positive surprises as you have predicted, but right now we are confident we will have 15%+. EBITDA margins of around 28%. The order inflow of INR 25,000 crore minimum, excluding QRSAM, and including QRSAM, INR 50,000 crore. R&D investment of INR 2,200 crore+. CapEx of around INR 1,200 crore. Defense to non-defense business, typically 90 to 10. We are going to meet this guidance which was given. We are confident to meet that guidance. Thank you from my side and my team of Director Finance and our Company Secretary.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.