Thank you, Rhea. Good evening, everyone, and welcome to today's Q4 FY '26 Bharat Electronics con-call.

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 more time, I'll hand over to Chairman, sir, for his opening remarks.

Over to you, sir.

Thank you. Manoj Jain, CMD, BEL this side.

Firstly, I will talk about the financial highlights of financial year '25-'26. The revenue from operations has increased to ₹27,480 crore in '25-'26 as compared to ₹23,658 crore previous year, with a growth of 16%.

The profit before tax increased to ₹8,075 crore in '25-'26 as compared to ₹7,090 crore previous year, with a growth of 14%. The profit after tax increased to ₹6,048 crore in '25-'26 as compared to ₹5,288 crore in the previous year, with a growth of 14%.

The EBITDA has increased to 30% in '25-'26 as compared to 29% in '24-'25. The earning per share also increased to ₹8.27 in '25-'26 as compared to ₹7.23 in year '24-'25.

The order book position as on 1/4/2026 is ₹73,882 crore, and order acquired till 31st March 2026 in the previous year was ₹30,045 crore. This is a brief financial highlight of financial year '25-'26.

As we told in the beginning of the year about the guidance, we have met all the guidance parameter in the last financial year. Thank you from my side as the opening remark.

Good evening, everyone, and thanks for the opportunity. Congratulations for a good set of numbers, sir.

A couple of questions from my side. The first question is essentially that the new orders that we are seeing in defense electronics, particularly centered around new-age technologies, quantum computing, drones, etc.

How do you see BEL developing capabilities for that? Is it that we are cultivating a system of startups kind of working with them to ensure that we get those technologies, or we are working with our ecosystem of other subcontractors, established subcontractors, the unlisted or listed companies in the space?

Just wanted to understand your thought process around it, the kind of capex that it would involve, and how you are building capabilities for these kind of orders that are expected to flow.

Huh? Hello?

Am I audible?

Oh, okay.

I thought I was speaking [unclear]. Yeah.

[unclear]

Sure, I will. Sir, my question was that in the view of the recent orders and developments in the defense electronics space, particularly some of the orders that we have also got in the field of drone electronics, the new-age technologies, quantum computing, just wanted to understand that how as BEL we are developing capabilities for that, whether it is in-house training or whether you're cultivating a system of startups, cultivating those kind of companies that are in new technologies, or is it through the tried and tested mode, the subcontractors that we already have, the kind of capex that would be entailed?

Just want to understand your broad thought process around this. That is the first question.

Okay. As

I heard your question properly now. These cutting-edge technologies, they have to develop it in part of all the collaboration partners.

Partners for us are DRDO, startups, academia, and our in-house strength. This drone electronics, or drone technology, or quantum technologies, whether it is QKD or quantum-safe communication, etc., we are working on all these four pillars of developments.

We have done a good hands-on on this technology, and a few POCs are also given to our defense users. We have totally geared up to tap all these technologies through all these four spectrums of working.

I hope I have answered the question.

Yes, sir, partially. Just wanted to understand whether it will entail more capex from us going ahead, and whether since we're working with a lot of stakeholders, whether it will impact our margins going ahead.

Firstly, let me tell you, margin should be better only when new technology comes in, because new technology means more value addition. Whenever this technology goes to field, definitely there will be more value addition from us.

Margins will be on the higher side only for that. Right now there are no big-ticket projects, capex projects on that.

Now coming to capex infrastructure built by BEL on that, definitely we have developed a good infrastructure because these technologies required a good computing infrastructure firstly, because the underlying technology in that is AI. AI requires a very good computing infrastructure, whether it is CPUs or it is GPUs.

That we have invested heavily. Of the order of minimum 100-plus crores in last 2 years we have invested, and at least around 100-plus 100 to 200 crore worth of investments are in different stages of approval.

That is the main capex which is required. The building and other infrastructure, testing infrastructure, integration infrastructure, that is definitely much less as compared to the compute infrastructure.

That also we are creating at three to four places, including our CRL, Ghaziabad, our CRL, Bangalore, our BSTC, our unmanned system, our network and cybersecurity SBU, and our Palasamudram facilities. At these five places, we are investing on capital or other type of infrastructure.

This CPU-cum-GPU infrastructure is actually created already at our CRL, Ghaziabad, CRL, Bangalore, and software SBU, and PDIC. At these four places already it's been done.

Last year, we have done some upgradation of the infrastructure. Now we are going to create one separate high-performance computing infrastructure very soon.

Great, sir. The second question is essentially on the semiconductors.

If you could highlight what part of our total COGS is semiconductors, and the recent increase in semiconductor prices, whether we are able to pass it on, or we have to absorb this?

Let me tell you, all semiconductors right now are imported, because still in India that infrastructure is just coming up. Semiconductors, although they are very very important component for us, but there are other systems, subsystems, other technology components, including compute resources and other things are there.

Semiconductor per se is around 17% to 19% of our material cost,

VOP.

VOP. We can say value of production.

That is there. Per se semiconductor cost increase, if at all it increases, it affects only this portion only.

Overall on the margin and that, it may not affect us that much. Of course, we are in the process of indigenizing some of the technology itself.

That way we will compensate for this price offset.

Great, sir. I will come back in the queue, and all the best.

Thank you.

Hi, sir. Good evening.

This is Umesh Raut here. Sir, my first question is pertaining to submarine program that is being talked about in between India and European OEM, and this is probably getting finalized with Mazagon Dockyard with the value of closer to ₹90,000 crore.

About this program, what kind of opportunities in terms of flow-through orders that BEL can expect?

Definitely, in all submarine program or ship-based program, major electronics comes from BEL. Of course, in this program, especially this P-75(I) program, there will be some foreign component also, because a foreign partner is working with MDL, and of course indirectly is working with us also.

Some foreign component with good indigenous content will be there. There are some components which are home-grown and which will be inducted as part of this.

I can again tell you, more than 50% to 60% of electronics in this program will be from BEL. We are in very very advanced stage of discussion with MDL and with this foreign partner of MDL for that program.

There are around six subsystems we call as part of this submarine program. Their technical names are communication suite, navigation complex system, the combat weapon control system, combat information system, torpedo fire control system, missile fire control system.

Like that, some six subsystems are there which are primary all are electronics driven. These all subsystems will be part of our BEL kitty.

Understood. Specifically on this only, in a per-ship cost or per-submarine level, how much of electronics could be the percentage cost of total submarine value?

Roughly ballpark number, if you can give?

I can't tell you exactly, but around 25% to 30% typically comes to electronics portion generally. In this particular one, because there is a foreign element also, it is not totally homegrown or in-house, so that's why the ratio may slightly vary 5% plus/minus on this numbers.

Understood, sir. My second question is pertaining to QRSAM program.

Where are we in terms of finalization? I think in last call you mentioned probably by March or June end this year you are signing this contract with customer.

Any update about this? Once we get that program, how soon we can expect execution to start?

Whether we will have similar set of margins as compared to our existing business, or margins could be lower in initial stages and probably it could be more back-ended in terms of higher margins?

Okay. As I told last time also, we were actually hopeful that by last year last quarter itself we may get, or else first quarter of this year.

We are still fully optimistic that before June end we may get this order. There is only 5% to 10% chance that it may slip to July, but otherwise we are confident as on today also that by June end we may sign this contract.

All the paper formalities, all other evaluations, all technical, PNCs, etc., different stages are there, they all are over. Now in the process of necessary approvals at various stage in ministries.

We are confident that in next 1, 1 and 1/2 months, it should be over. Worst case it may slip by one more month.

We are not expecting more than that delay as of today. Regarding the program, once we sign the program, within 18 months we are supposed to give the first of production model.

We have already started gearing up the initial homework what is required for this. We have already started, so that we don't want to slip on this first target of 18 months.

We will definitely give our first of production model within 18 months of signing the contract. After that only, the real bulk supplies will start.

Regarding the margins, etc., it is too early to say whether it will be a bit more than that or a bit less than that, because once we finalize contract, back-to-back contract with our tier 1, tier 2 suppliers, then only we can come to know how much maybe that. Definitely it will be similar orders only.

May not have too much change, but exact quantification of the project we will come to know once we sign the contracts with our tier 1 and tier 2 suppliers.

Understood. My last question is more of on the bookkeeping side.

If I look at other expenses for the quarter gone by, those were up by about 36% year-on-year. Any one-off provisioning that you did during the quarter?

DF sir will tell, yeah. Yeah.

These are basically regular provisions due to increase in operations. For example, performance warranty, as the turnover increases, we need to provide more for the performance warranty, and certain other expenses which are in line with the scale of operations also.

There are some of course LD-related expenditure also in this. Overall based on scale of operations, this expenditure has increased.

Provisionings for the full year FY '26 more or less were similar to FY '25?

Total provisions.

Total provisions as a percentage of sales were similar to FY '25, or were there any increase in FY '26?

No, FY '26 definitely there's not increase. It's almost similar only, on the similar pattern.

Understood, sir. Thank you.

Thank you so much and all the very best.

Thank you.

Thank you for the opportunity, sir, and congratulations on a great execution and margin. Sir, my first question is on your existing order book, sir.

Sir, can you help us with the breakup of your existing order book in terms of project-wise and what will be the timeline to execute the current order book?

Yeah. The order book of around ₹74,000 crore mainly consists of some big-ticket few items I will just list out: the electronic fuses, the LRSAM, the LCA Mark 1 Mark 1A LRUs for Tejas, BMP-2 upgrade, spares, services, and miscellaneous items, Ashwini radar, then EW suite for Mi-17 V5.

These are the major projects which we are going to execute in next 2 to 3 years. Out of that, I think all items we are supplying next year also, although the electronic fuse is for another 7 to 8 years more, 7 years more, and BMP-2 upgrade also is for another 2 years.

Remaining are 1, 1 and 1/2 years we are going to execute these orders.

Got it, sir. Is it possible to quantify some of the big-ticket items?

Yeah.

Electronic fuses around ₹4,300 crore still left for us for next 7 years. LRSAM around ₹3,500 crore, LCA around ₹3,200 crore, BMP-2 upgrade around ₹2,800-plus crore, Ashwini around ₹2,460 crore, Mi-17 V5 around ₹2,200 crore, spares, services, miscellaneous again around ₹2,500 crore.

These are some of the major items which are to be executed in '26 and beyond.

Got it, sir. Sir, my second question is on the line of your order inflow guidance for the upcoming year.

Excluding QRSAM, what can be the order inflow that you're looking at in FY '27?

This data anyway I will tell in my closing remark about the guidance for this year.

Got it, sir. Sir, then I'll fall back on the queue, sir.

Thank you.

Good evening, sir, and congratulations on strong execution continuing. Sir, first question is on the DAC approvals that we saw last year, almost ₹6 lakh crore.

Sir, and this year we have seen almost ₹30,000 crore of base orders. Is there a possibility of base orders seeing a step-up next year as these approvals come into order inflows?

Definitely, that anyway I will tell in my closing remark what we are looking at for this year and beyond. Please wait for the closing remarks.

Understood, sir. Sir, second is on the other income.

It seems to have come off. What could explain that for this quarter?

Is that exchange-

Mainly during the year, the average interest rates have been less. Average yield from the banks has been less.

That is the major reason for the other income decrease.

Understood, sir.

Of course, FE increase has also caused some effect on that.

Sorry, sir, last part I did not get.

Which inc-? Foreign exchange impact is also there in that.

Other income reduction is on account of these two: average interest rate reduction and foreign exchange variations.

Understood, sir. Sir, and just also wanted to understand on exports.

The share of export orders in the backlog seems to be increasing, what is driving that?

The order book is healthy from export point of view. We have around $496 million US order book for this year and subsequent years.

Some of the orders are to be executed in 2 to 3 years. That's why once I will give guidance about this year, I will tell what is executable in this order book in this financial year, what if we have planned.

That I will tell at the end of this call.

Understood, sir. Sir, and one bookkeeping question.

If you can share the amount of advances that are there? Operating cash flow this year seems to have improved.

Is it driven by increase in advances? That is what I want to understand.

No, over the year, the cash flow has been more or less good, as you can see from the cash balance at the year end. Advances as at the year end is around ₹12,500 crore from the customers.

Okay. Sir.

Sir, that's it from my side. Thank you so much.

Thank you.

my question is again on the fact that your order book has not grown this year, in fact it has been flat for some time, because now your annual order inflows are very similar to your revenue number. In that situation, how long can you maintain this 15% plus kind of revenue growth?

Is it feasible to maintain that level, or do we come down to a lower level of 12%, 13% over medium term? No,

definitely that answer I will tell at the end of this call. Let me tell you, I think last year also we told that every year we get some fixed set of order, and every 3 to 4 years we get some big-ticket projects.

That big-ticket projects will take us with a good healthy position of the order book and execution and a good growth rate. Like this year QRSAM, definitely we are going to get now anytime soon.

That way, after 2 or 3 years, we again have one or two big-ticket items in pipeline, which are more than 20, ₹25,000 crore type of one big-ticket item definitely will be there to recoup. Otherwise, the constant order flow will be there based on our all different type of portfolios.

With that, definitely we are going to have very very good growth rate. That anyway I will tell you at the end of the program.

Let me again assure you, there will not be any down trend we have seen. We are highly optimistic for next 5 years at least where our main leads are, and we are confident we will have higher trajectory only, not at all a lower trajectory.

Sir, in addition to QRSAM, which is likely to come very soon, could you talk about a few more larger projects, say, in excess of say ₹50 billion or ₹30 billion order size, which would come to the company over next 2 years?

Certainly. NGC, there are so many subsystems of NGC, next generation corvette program, which definitely will come this year, and if few may spill over to next year also, few subsystems.

At least 50% of the subsystems we are hoping to get this year only in NGC program. The Shatrughat and Samaghat EW solutions, we are hoping very very soon.

P-75(I) which I listed just before, there are a lot many six subcomponents within that, we are going to get some order for that this year. HAMMER program, we are expecting very soon.

Shakti phase 4, we are expecting very soon. MFRX radar for naval ships also we are expecting very soon.

These are some of the big-ticket items which we are going to get mostly in this year itself, a few may spill over to next year. It is '26-'27 and slightly beyond '27-'28, this mix of the project which I have listed just now to you.

Sir. Thank you.

Thanks a lot.

Thanks for taking my question. My first question is on Project Kusha.

I was reading somewhere that India is preparing for maiden firing trial of Project Kusha's air defense interceptor by late July. Just wanted if you could give some color around that, and what is our role and what kind of order we could get for this prototype?

Let me tell you again, this program is spearheaded by DRDO. We are one of the largest development-cum-production partner for them.

As such, this question is more relevant to DRDO. Of course, when we are their DCPP partner, we know what's our portion we are developing for them.

Those portions, various radars, various control centers, communication systems, they are in very very advanced stage of delivery or prototype realization. I can only tell about what portion I am driving directly, but the total program and trial directives and which missile to be tested first and in what configuration, these all are decided by DRDO.

This question actually directly relates to them. It's me, I am only answerable for these subsystems right now.

Got it. The second question is on data center.

We have the ambition to target the government data center business. What's our order pipeline for this business and are we seeing any success over there?

Data center business already there are so many players. We wanted to give some unique solutions.

Uniqueness comes from two fronts. One is from security point of view, to give a more cyber-safe solution.

That we have taken a few leads where we are adding cybersecurity components of ours, but otherwise the server and other components are COTS. That is one set of target customers for us, where we have got some few hundred crores projects only right now.

The big chunk is waiting for us where we wanted to give totally indigenous total data center solution, with hardware and software stack also and cybersecurity components, all are home-grown: a few from our own company, and a few from our Indian development partner, C-DAC. We are in very very advanced stage of discussions with them to provide end-to-end totally home-grown data center solutions for large number of customers.

Once we click on that, that orders we are expecting of the tune of 2,000 to ₹10,000 crore somewhere in between. Right now maybe a few hundred crore we already have, but a good leads are there, we may expect around 1,000 to ₹5,000 crore type of business from the first segment of business.

The larger segment of business is through this total home-grown solution of data center, which we are eyeing at little bit more. We are in advanced stage of discussions with C-DAC and then their tier 1, tier 2 suppliers.

Sure, got it. Thank you.

Hi, sir, thank you for the opportunity and congratulations for a good set of numbers. Sir, first question on the constantly improving gross profit margins.

If we see from FY '24 to now, we are almost at 49%. There's a substantial improvement in the gross profit margin over past 2 to 3 years.

Considering that you highlighted what is going to come from the current order book for execution, what is your sense on the gross profit margin for FY '27?

Again, I will tell you at the end, although I know the answers for many of this, because unnecessarily I did not want to repeat that. Definitely I will tell all these points at the end.

Let me again tell you, this profit margins are because of mix of products. Product mix year on year slightly vary, and based on that, some variations will be there.

That we predict at the start of the year, and generally we are up to the mark of what we predict. This year although we have done the prediction, and that predicted value I will tell you in my closing remark.

Right, sir. Sir, second question, you alluded that we're looking for at least 4 to 5 years of good growth.

Just wanted to understand on capacity side, where do we stand in terms of capacity utilization and the capex requirement according to the pace of growth which we are expecting, and how much was the capex this year, and what is the guidance for capex for FY '27?

Definitely, as you rightly told, if we have to have a good growth, we should have a good investment plans also. It is not only the projects, it is the capacity also has to be augmented.

That is a continuous journey in BEL. Knowing our large base now, and with that large base, this type of a growths, double-digit growths require further investments.

We had already done a good plan for that. Last year I think we had

900. ₹900 crore

expenditure was booked. This year anyway I will tell you at the end.

It will be definitely much more than that. We have much more bigger plans for next 3 years.

Some big projects at Palasamudram, at Chitrakoot, and Vellore facility, they are in pipeline for us in addition to our Ghaziabad and Bangalore. Large investments are planned to upgrade the facilities for diversified products and a new dimension of the products where we are going to enter.

In that, a large capex projects are in pipeline. That put together all, definitely will make sure that we don't have a capacity limitation when we execute the projects for years to come.

Right, sir. Currently, where do we stand?

Like, 70%, 80%, or how much from the current capacities still is possible one more year, two more years?

No, it is nothing like that as if this present capacity is for 1 year or 2 year, etc., because we have again a mix of products. Something we produce in-house at component level till module and system level, and some of the projects we are doing only system integration capability.

System integration-related projects require much less infrastructure, much more skills. At component or subcomponent level, it requires a great capital infrastructure, also specialized infrastructure.

As such, we can't tell you my present capacity is for how many more years. We have to invest at different places for different type of infrastructure.

Like for semiconductor component assembly and manufacturing, we require SMT machines, and our clean rooms, and our different type of MMIC handling type of processes, etc. At other end, we require large space for missile integration type of projects.

We are investing on both fronts. As such, we are not seeing any choking for us for next few years, maybe 3 to 5 years.

As such, there is no choking for the capital infrastructure. We are continuously adding so that we don't face this type of choking for next 10 to 15 years also.

Right, sir. Sir, finally, on status on the AMCA project, we are hearing that land has been finalized for that ₹15,000 crore project.

Any status from your side in terms of RFPs and any other development which might have happened on that side? Thank you.

Certainly. As you may be knowing that we are one of the three selected bidders for receiving the RFP.

Pre-RFP related meetings already happened. Now we are expecting mostly this month end or next month, the formal RFP will be received by us, means we as a consortium partner, BEL and L&T.

L&T was our lead bidder. L&T will receive the RFP mostly anytime in next 15 days to 1 and 1/2 months.

Then we will start responding to the RFP. Regarding development and the land acquired, etc., that is done by ADA, the DRDO, because again here we will be the DCPP partner only for the five number prototype.

The program is being run by ADA, Aeronautical Development Agency. That land and that test facility is actually taken by ADA, and that will be used for AMCA program.

We will also use during this development jointly with ADA that facility also. We start investing on our own infrastructure once we receive RFP and once we are selected as the selected bidder.

Then of course our investment on capital will increase. Right now we have only done the basic plans, assuming in case we are the selected bidder, what we have to do.

That type of plans only we have done, but real execution or real investments will only happen once we are selected as the successful bidder at the outcome of this RFP.

Thank you so much, sir, and all the best. Thank you.

Thank you.

Thanks. My questions have been answered.

Thank you very much for the opportunity, sir. Sir, firstly, on the pricing in the nomination-based contracts, when the new PBT norms were announced by the Ministry of Defence back in FY '20, it was expected that the margins would come under pressure.

On the contrary, margins for not just you, but the whole defense ecosystem has expanded. What has enabled this performance?

As I told last year also, again I am telling you, it is the indigenization. Indigenization of critical technology, indigenization of modules, systems, subsystems, that has definitely helped all of us for that.

That's why we are putting all our efforts in increasing this indigenization score for all of us. One thing is by our own in-house efforts, we have created even a separate indigenization cell in BEL to closely monitor our own developments as well as the developments done by our MSME and other startup and other partners.

We are closely monitoring and supporting our ecosystem partners to increase this indigenization. The more faster we do indigenization, the more profitable all of us will be.

That much I can assure you, it is only and only indigenization which has really helped all of us.

Understood. Sir, when we indigenize a system, subsystem, or a module, that is definitely known by DRDO, by the Ministry of Defence, by the ecosystem.

Whenever the order placement comes, why the Ministry of Defence is not cutting down on the prices? Why they are letting PSUs and the entire ecosystem make much more margins than what they have traditionally allowed?

The thing is, firstly, the role of MOD is to support the industry and to create the good environment of this Atmanirbharta or indigenization. Definitely they should not cut at the root itself.

The thing is, when they do bench-marking of the price, there are various methods of bench-marking, what is the price of this item if I import, let us say. That is the price, benchmark price.

With that, and then we do subsequent cost optimization and indigenization, that can be plowed back by us for our profits. What we do with this profits?

This profits we again plow back in the capital or in the R&D. This cycle MOD also don't want us to break.

They are actually supporting us to do more indigenization or more Atmanirbharta, and the policy allows that to happen.

Perfect, sir. Sir, lastly, if you could update us on the Uttam radar program.

Are the quantities and scope finalized by HAL, and when do you think the supplies from our end could begin in terms of development of the subsystems that we versus the other player that is also involved? Where are we in this particular program?

Again the question should be asked from HAL the more, because it is HAL and DRDO, the DRDO partner is LRDE, who is that original designer of Uttam radar, and HAL is the system integrator of Uttam radar to LCA. The question should be asked to them when and what stage this tests are.

As far as I know, they were in the very very last stage of testing and clearing this radar for LCA, but exactly I don't know because the question is more apt for LRDE and HAL. As and when they finalize, they will issue RFPs for this subsystems or components to us.

As per my record, as of now, I have not received any enquiry from them for this program. That much is my side status, but the correct status you can get either from LRDE or from HAL.

Right, sir. Thank you very much for answering my questions.

Good evening and thanks for the opportunity. My first question is on the net working capital cycle at the end of FY '26.

It seems to have increased sharply as compared to FY '25. Could you speak about the variances which have led to this outcome?

It seems the receivable days have also gone up by about 30-odd days. Your comments, please.

Yeah.

Current ratio is around 1.97 as compared to 1.76. You are right that receivables have gone up in the current year as compared to last year.

There were some constraints from the customer side during the previous year, which money was subsequently received in April and May. That is the reason why at the year end the number appears to be higher than last year.

This amount, what was to be received in the previous year, has since been received in the current year.

The more sustainable level of receivable cycle should be what, 130, 140 days of sales,

or? Receivable trade has been in the constant around 140 to 150 days for the past 4, 5 years.

I think it should be around that level only.

Got it. My second question is on the operating cash flow to EBITDA ratio.

Basically your EBITDA in FY '26 was about ₹8,000 crore, and your cash flow from operations as reported in the BSE filing was about 1,490-odd crore. Which is a conversion ratio of about 19%.

In FY '25, this ratio was about 6.8%. If I look at the cumulative operating cash flow reported over last 4 years to cumulative EBITDA reported over last 4 years, the conversion factor is about 33%.

Typically companies in the capital goods sector would have better conversions of EBITDA to operating cash flow. Your comments, please.

See, overall the break-up of the operating cash flow item-wise has been given, the statement has just been uploaded on the stock exchanges. All the details of each individual items have already been given.

That way all I can say instead of answering you so much technically that what is the ratio, all I can say is the current cash position is reasonably okay for us to sustain the plans which you have got for the future.

Okay. Thank you so much and wish you all the best.

Hi, sir, thanks for the opportunity. Sir, firstly on the current supply chain environment, given the macro situation, are you witnessing any disruption in sourcing or availability of critical components?

Semiconductors, you did talk about earlier, but could you also indicate the key countries or regions, especially in the Middle East, from which you import critical components and whether you see any impact on execution timelines or margins in the near term?

No, the supply chain per se is definitely slightly affected, especially the Middle East crisis. Some of the subcomponents for major programs like LRSAM, etc., were coming from Middle East.

Definitely there was delay of around 1, 1 and 1/2 months for us. That's why we wanted to achieve slightly better revenues.

There was a minor setback, but that setback was only for few months. Overall, I am not seeing any major impact for us for our turnover, revenues, etc., when we see the year.

Year on year, I don't see any much challenge. Same thing is about semiconductors also.

Very very few semiconductor comes from Middle East, actually some detectors and other high-end detectors, etc. Otherwise, major semiconductor ICs, etc.

comes from Europe or US type of sources, or some Taiwan. We are not per se affected that much when we see yearly target or yearly span about this Middle East crisis.

Some variations in month to month or up to one quarter to next quarter spilling over, etc., are there, which are part of life for us. We are doing sufficient planning based on whatsoever we can speculate, and then make our own targets, our own monthly targets and quarterly targets based on that.

We do some minor corrections, etc., but as such we are not foreseeing any major challenge for us.

Right, understood, sir. Secondly, you did highlight indigenization as one of the key levers for margin expansion that you have delivered over the past several years, now a few years now.

What would be the current level of indigenization across your product portfolio and how has this evolved over the past few years? Going forward, what what is the scope or headroom to further increase localization?

To do that, do you see any bottlenecks, whether in terms of technology access or local component ecosystem, testing cycles, capabilities with local vendors, etc.?

The indigenous content, as you know nowadays Government of India policy itself is minimum 60% in all our new projects. We are of the order of 80% to 85% mostly in our indigenous content for various programs.

Depend upon the different type of product and product mix, our homegrown products or our DRDO-driven products, it sometime that is even 90% also. Some other programs where still we are depending on ToT which we had taken a few years back, we are around 55%, 60%, 65%.

Overall it will be more than 80%. Right now the main limitation which we are foreseeing is about the semiconductors only, because otherwise modules, subsystems level enough infrastructure in India has been created.

We are not seeing much challenge for that. Semiconductor, it will take at least few more years before the semiconductor ICs we start getting from India itself.

That will affect us on the indigenization score slightly, but next 2 to 3 years between 80% to 85% on an average indigenous content will be there for our products.

Understood, sir. Lastly, any incremental opportunities that you see on the non-defense side or international market, which is the export piece, to be materialized over the next, say, 12 to 18 months?

Definitely, both of these areas are very very important for us to maintain this double-digit growth. Non-defense right now it is 8% to 10%.

We wanted to steadily increase it to 15% to 20%. The same thing is about export, which is 4% to 5% right now over a period of time, but that period of time is around 4 to 5 years.

We want to increase it to more than 10% of our turnover. In near future of next 1, 1 and 1/2 years, the increase will be maybe 1% or 2%, not more.

Definitely it is on the increasing side only, both fronts. Non-defense as well as exports are increasing.

Their contribution is increasing only in our overall turnover or overall revenues.

All right, sir, that was helpful. Thank you so much.

All the very best.

Thanks for taking my question. Sir, my question is related to net working capital, and part of it you have already answered.

My question was related to the customer advances, because that number also as a percentage of sales or as the number of days has also been coming off from past 2 years. How do we see it going forward from the new orders that you are likely to get, particularly the bigger orders like QRSAM and all?

What kind of customer advances will be there, how to look into this aspect? See,

the contract for QRSAM is under finalization, would not like to comment much on that as to what are the terms and what are the prices, because that is under finalization. The overall advances, as I told you, is around ₹12,500 crore as on 31st March '26.

As far as the operating cash is concerned and cash flows is concerned, as I told, it is good for us to sustain the expansion plans what we are contemplating in the coming years.

In terms of the advances that you get from the incremental order inflows, because order inflows for the company has been fairly good in last couple of years. The customer advances are not moving in line with those.

It depends on the various payment terms of every contract. Every contract is different and it depends on the payment terms which are initiated in the contract.

There are contracts where there are advances, stage payments, whereas there are some other contracts where the terms are a little different. It is that way,

it's

a mix of both the contracts.

Understood. It's not uniform across all the projects, because mostly everything is coming in from Ministry of Defence.

It is not uniform that it is this term and this is five-mode term and it's final for all the contracts, it is not that way.

When we do our costing, we take care of this parameter also. What is the advances or schedule of payment for every program, we take based on that.

Nothing is alarming as such for us.

Understood. My last question is regarding the bigger export opportunities which do you think that can materialize over let's say next 1 to 2 years on the bigger platforms that you are working upon?

Or it will be like the smaller type of export orders that so far you have been doing? No,

definitely smaller orders whatsoever we were there, that repeat business is there for those orders. Some other big-ticket items also we are working right now.

Communication equipments was one such project where last year itself we have got very good order. Opportunities for this type of communication equipments, specially SDRs and others, and satellite communication systems, those type of large order are expected for these two.

After Ops Sindoor, we have got very good leads for a truncated C4I solutions also, or customized C4I solutions for various countries. There are also system-oriented solutions.

Some big-ticket leads are there related to that. Of course whatsoever we had received earlier in last 5 years, that related repeat orders from the same customers are also coming up as a regular business for us.

How long will it take for these big-ticket leads to materialize?

They are of different varieties. One of the lead was materialized last year just, I think, in the month of March.

That way, this year also there are one or two big lead tickets items are there. As in exports, the real challenge is to acquire an order, because there are so many geopolitical situations, complications, etc.

Until we receive an order, for us it is a lead only. We don't really can predict that this I will get by such and such time.

The

much more certainties I can tell you about our own indigenous programs, or our own Indian programs, but in export that type of certainty is not there. That's why we take so many leads in our pipeline, and then only give you some calculated score based on our experience how much we may realize in this year.

There is always a iota of doubt when it comes to export order acquisition.

Got it, sir. That's it from my side.

Thanks for the opportunity. Sir, firstly wanted to get a clarification, something you mentioned with regards to the P-75 order.

What you mentioned is that typically electronic systems make up anywhere between 25% to 30% of the project cost. Since here you have foreign players, BEL's share would be around 50% to 60%.

Which would mean that roughly anywhere between 15% to 18% of the overall project size should come to us. Would that be the correct understanding based on your comments, sir?

Macro level you are right, but micro level when we will go to individual line item, it may be minor plus/minus can be there, but definitely it is big order for us. It will be a big order for us.

As I told na, some of the items are coming from the foreign partners, so that partner-related work share-

Hello? Sir,

You're talking about the management, right?

Sorry for that technical glitch, I believe, again. We will take few more questions because we are interrupted because of this technical glitch, we'll take a few more questions.

Sir. Hello?

Please continue.

Yes, sir. Your answer wasn't audible, I think, you were speaking for the submarine order in terms of the receipt and execution, if you could share elaborate further on that, CMD sir?

No,

I was telling whatsoever your prediction of calculation is more or less right. However, there is a small surprise element, because some of the foreign component items, how much and what module we will indigenize in that, because some of the things they may indigenize from some other Indian partner also.

That nitty-gritty of that foreign component still has to be finalized with them. That's why this prediction may go by a few percent here and there.

Got it, sir. Once the order is received, sir, any idea as to how long would the execution cycle be, as in what are our expectations once the order is received?

I think it is of the order of 5 years, if I am not wrong, roughly, because again there are six submarines. There is a definitely a submarine development plan timelines that will be decided by MDL.

I don't foresee any challenge for us per se for making those electronic items, but that depends upon the submarine development time, manufacturing time. Based on that only they will expect my delivery schedule to align with them.

That's why I will align with their delivery schedule. We don't have any capacity or other limitation for the program as such.

Sir, that's really helpful. Sir, my second question is with regards to the new products that are under development, especially the directed-energy weapon system.

Sir, if you could elaborate a bit on this as to what is BEL doing here and how are we working with DRDO on this product?

Definitely, we started working with DRDO in this program. Of course our CRL, Bangalore was doing something on their own also jointly with IISc and our own internal strengths.

The majority of this DEW development we are depending largely on DRDO, the CHESS, who is there for the laser-based DEW, and MTRDC for microwave-based DEW. We are their largest development-cum-production partner for most of the DEW programs.

However, we have also started indigenizing some of the critical subsystems of these programs on our own, so that overall indigenous content becomes more and more, and overall Atmanirbharta in this critical technology segment becomes more and more. That we are doing with our internal funded programs, being spearheaded by our CRL and well supported by our Product Development and Innovation Centre.

That also is in pipeline for us. Majorly we are depending on DRDO right now for these two programs development, and we are supplying some developmental orders for them as well as we are supplying some user-driven programs.

We are supplying to users some of the DEWs as part of our D-4 projects, etc. Some of the large DEW programs, we are their DCPP partner and we are supplying to them these modules based on the design done by them.

Got it, sir. That's very helpful.

Sir, lastly, again, getting back on the point that was highlighted earlier by another participant on our margins, sir, if I look at our margins, thanks to the kind of improvement that you've seen in gross margins owing to indigenization what you mentioned, EBITDA at record high at about 29-odd percent, and congratulations, sir, that we have consistently outperformed whatever you've guided. This sort of begs the question that starting fourth quarter FY '27, we might see some sort of increase in provisioning due to the Pay Commission changes also.

Although that does not affect us directly, but I'm assuming that considering last time when there was a change in the Pay Commission, our employee cost also increased by 20% plus on a YoY basis. Do you expect these kind of margins to be sustainable, at least what we have sort of achieved in FY '26?

If any dilution that you're expecting, how severe this dilution could be, and could the increase employee cost have a hand in this going forward, assuming that our gross margin profile by virtue of the indigenization that we have achieved and that we're going to achieve should remain high? Your comments here, sir, please.

When we give guidance, we take care of all the parameters. Just at the end now in another few minutes when we will give guidance to you for this year, definitely we have taken care of all the parameters including wage revision of our employees, which is due in 1/1/2027.

Only last quarter we may expect a little bit more wage expenses. Taking into consideration that, our indigenization, our all product mix of this year, based on that only we have arrived at the guidance, which I am going to tell you very shortly.

Got it, sir. This is really helpful.

Thank you so much and all the best.

Madam, we can take one last question and then we will have closing remarks and guidance.

Good evening, sir. Great set of numbers.

I do have many questions, but I'll ask this one. With strong cash generation, how is BEL thinking about capital allocation?

Is it through higher dividends, acquisitions, technology investments, or in organic expansion?

Madam, definitely we should work on all the parameters if we have to grow with double-digit growth for next 5 to 10 years. We have our own different plans.

We have a Strategic Planning Group headed by a general manager who plans all these things, and well supported by our corporate finance group. They come out with this plans where to do this allocation and which area to invest more for next few years to come.

It is definitely a logical mix of various parameters or various portfolios which you have mentioned. That is our internal plan which we generally don't come out.

Let me again assure you, we take care of from all fronts so that our growth is consistent.

I'm sure you will, sir. I'm hoping over the next 5 years you would be looking at top two to three technology platforms or products where you think that you can materially change BEL's revenue and profitability profile?

Madam, it is not two or three. We have at least 8 to 10 different high-end technology driven programs where we are investing at least ₹200-plus crore on each one of those technology programs.

They are covering almost all major areas where BEL is right now a leader. To continue to be a leader, we have to do good investment in those products/technology.

That is there in our technology roadmap plan. That plan we formally don't disclose, but in various technological forums, indirectly we mention that to all of you.

Maybe at next occasion, sometime when this type of a technical event is organized by you, we will definitely come out and give you those projects details.

Great. I'll take the rest of the questions I'll discuss with you offline.

Thank you so much.

Thank you.

Shall we, madam, have closing remarks?

Yeah. As we told, future outlook for year '26-'27, after taking into consideration our present base, our present product mix, our present order book, etc., and seeing all other challenges or geopolitical situations in mind, we are retaining our revenue growth of more than 15%.

Definitely we are going to have more than 15% as a revenue growth for '26-'27. EBITDA margins will be more than 28%.

The order inflow we are expecting this year more than ₹55,000 crore, that includes of course QRSAM, which we are expecting very soon. R&D investment, we have continuously increased in the last 2 years to keep pace of the technology and to see enter into the new areas of business operations.

This year we have targeted a value of around ₹2,200 crore investment in R&D. Same thing is capex also, again 20%-plus growth, we are targeting more than ₹1,200 crore as capital investments for this year.

Defense to non-defense ratio, more or less it will be 90 to 10, maybe plus/minus 1% it may vary based on our new plans for non-defense business, but we will anyway tell you in the middle of the year whether it is slightly changed, but as of now the guidance is 90:10 for defense and non-defense business. This is a guidance for the year from my side as closing remarks.

Thank you.

Thank you.

Thank you.

Thank you all.