A Diversified Growth

In addition to seeing a very good opportunity in Defence Exports, BEL, has been continuously exploring diversification into allied Defence and non-defence areas. In conversation with Bhanu Prakash Srivastava, Chairman and Managing Director, Bharat Electronics Ltd

Show: Aero India 2023 - Day 3
Bhanu Prakash Srivastava

SP's ShowNews (SP's): Please tell us about your participation in Aero India this year.

Bhanu Prakash Srivastava (Srivastava): Bharat Electronics Ltd (BEL) will showcase state-of-the-art products and systems spanning every domain of its business at the 14th edition of Aero India 2023. The products and systems to be on display have been clustered as 'Communication', 'Electro-Optics and Laser', 'EW and Avionics', 'Homeland Security & Smart Cities', 'Medical Electronics', 'Naval Systems', 'Network Centric Systems', 'Radar and Fire Control Systems', 'Tank Electronics and Gun Upgrade', 'Weapon System', and 'Outdoor Display Products'. In addition, BEL will also showcase its R&D capabilities by launching/demonstrating some of its new products and technologies. The company has set up an Experience Centre at its stall to showcase its Voice Analysis Software and Augmented Reality/Virtual Reality for Universal Simulator.

The highlight of BEL's outdoor display will be Weapon Locating Radar (mountain version), Akash Air Defence System, Ant-Radiation Decoy System, Surveillance Radar, Air Defence Fire Control Radar, Automatic Manpack SATCOM Terminal, Anti Drone System and Mobile Communication Terminal. The entire set of state-of-art equipment on offer will be a force multiplier for any Defence force and civilian requirements.

SP's: Can you brief us about BEL's financial performance; what has been the impact of the pandemic on your growth?

Srivastava: BEL continues to be a profitmaking PSU, despite challenges posed by the pandemic, global chip shortage and stiff competition. FY 2021-22 saw the company registering a record turnover of 15,044 crores, a growth of nine per cent over the previous year. BEL became the first Defence PSU to cross the landmark market capitalisation figure of 80,000 crore, and declare the highest ever dividend of 450 per cent. The company has increased its authorised capital three-fold to 750 crore and issued bonus shares in the ratio 2:1. This year, we are confident of continuing the good show and achieve a revenue growth of 15 per cent and EBIDTA Margin of 21-23 per cent.

Akash Weapon System

On this occasion, I would like to share with you the good news that the Ghaziabad Unit of BEL has won the twin honour of CII EXIM Bank Business Excellence Award (2022) and the Jury's Commendation for Role Model Organisation. The Award is the highest level of recognition in the CII-EXIM Bank Award for Business Excellence.

SP's: Please tell us about BEL's exports. What are the major products and who are the customers?

Srivastava: BEL achieved recorded an Export turnover of $33.30 million during FY 2021-22. Major products exported included Coastal Surveillance System, Trans-Receive (TR) Modules, EO-IR Payload System, Compact Multi-Purpose Advanced Stabilization System (EOS CoMPASS), Solar Hybrid Power Plant, Data Link, Electro-Mechanical parts, Low Band Receivers (LBREC), Medical Electronics, Spares for Radars, etc.

BEL is fast expanding its global presence, putting its best foot forward to give a thrust to exports worldwide. All-out efforts are being made to tap new markets across the globe, including the Indian Ocean Region (IOR) and friendly foreign countries (FFCs).

The Government is encouraging defence exports through many policy initiatives and has set a target of 35,000 crore by 2025. BEL has identified Exports & Offsets as one of its thrust areas and has drawn up plans to offer its select products and systems to various export markets.

Some of the other products and systems which are being promoted for exports include Homeland Security solutions, Smart City solutions, Border Protection Systems and Coastal Surveillance System. Having established a Coastal Surveillance System (CSS) for a few neighbouring countries, BEL is interacting with the Ministry of External Affairs for supply of CSS to other friendly countries.

BEL is also focusing on Offset as a potential avenue for revenue generation. BEL is interacting with many foreign OEMs to meet Offset obligations in various programmes of the MoD. BEL has identified contract manufacturing (build-toprint and build-to-spec) for foreign OEMs and partnerships in the form of Transfer of Technology of the latest systems and solutions as areas of emerging export opportunities. Efforts are also on to establish long term supply chain relationship with global players.

SP's: Tell us about your initiatives to diversify into the civilian business.

Srivastava: Defence, being the mainstay of BEL, has traditionally been contributing to around 80 per cent of the Company's annual sales revenue. BEL, however, has been continuously exploring opportunities in allied non-defence areas. The Company aims to increase its non-defence share in the overall business in the coming years.

Some of the areas BEL is focussing on in non-defence include solutions for Civil Aviation sector including Air Traffic Controller Radars, Anti Drone systems, Space/Satellite Electronics, Satellite Assembly & Integration, Unmanned Systems, Solar Business, Railway and Metro solutions, Software as a Service, Network & Cyber Security, Energy Storage products for Electric Vehicles (Li-ion & Fuel Cells, Charging Stations, etc), Homeland Security & Smart City businesses, Smart Meters, a range of Medical Electronic and health care solutions, Artificial Intelligence, Communication Radios & Networks, Composite Shelters & Masts, etc. This wide bouquet of businesses in nondefence would play a key role in driving BEL's growth in the coming years.

SP's: In recent years, the Government of India has stressed on the need to involve the MSMEs, private industry and startups in the Defence sector. What are BEL's initiatives to promote such initiatives?

Srivastava: The Defence Sector is being opened up for private sector participation with the evolution of Defence Procurement Procedure. In this changing business scenario, BEL is focusing on enhancing interactions at various levels and building long-term relationships with customers, emerging Strategic Partners and other key stakeholders in the Indian Defence industry as a trusted and committed partner.

Be it the efforts that the Company has been putting in to engage in collaborative R&D in addition to augmenting its own R&D set up — its recent attempts to outsource work to Indian private industries and MSMEs, or the path breaking decision to go in for Public-Private partnerships to execute turnkey projects, BEL is leaving no stone unturned to ensure that it is in sync with the Government's larger goal of indigenisation and self-reliance.

BEL has formulated a long-term Outsourcing and Vendor Development Policy and has been taking several initiatives in order to broaden the domestic vendor base by implementing online vendor registration and e-procurement processes including GeM. This is in line with the 'Make in India' initiative where enhanced thrust has to be put to develop domestic players. Make in India Display Cells have been established at all Units of BEL. The procurement from MSMEs by BEL has been over 20 per cent in the previous years. BEL also takes part in various events organised by the Government of India to promote MSMEs.

Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the growth of startup businesses, to drive sustainable economic growth and generate large scale employment opportunities. BEL has identified several areas for partnership with startups in new emerging areas including Machine Learning, Cyber Security, Artificial Intelligence, Embedded Computing and other latest technologies which can be used for Defence electronics applications.