Bharat Electronics Ltd., the Defence public enterprise, has just completed what it says was a good year. Orders flowing in from the Armed Forces, the 'Make in India’ fervour, growing exports and the promise of the offsets seem to have restored its confidence. In his first media interview after taking charge in January last year, BEL Chairman & Managing Director S.K. Sharma talks to Madhumathi D.S . on what is in store at the Bengaluru-based company.
Excerpts:
How is BEL poised to perform in fiscal 2015-16?
Last year [2014-15] was a good year for us. We achieved a turnover of Rs. 6,671 crore. It was a fair topline growth of eight per cent.
For 2015-16, we hope to maintain our growth momentum of at least ten per cent. The order book is a fairly good Rs. 22,000 crore. Conservatively we should be working upwards of Rs. 7,000 crore or 7,200 crore during this year at the current growth rate.
Which projects or orders do you particularly look forward to this year?
Major programmes such as missile systems continue to grow. We have orders from the Air Force and the Army for Ghaziabad and Bangalore units. The contract for a new [Army] project, the Weapon Locating Radar, is expected to come shortly this year.
We will be executing a large number of Naval projects which should give us good business turnover — for example hull mounted sonars, fire control systems, combat management systems, ship communication systems. This year's Naval business component should be one-third of the turnover; it is typically one-fourth.
Two key projects for the Army are the TCS [Tactical Communication System] and the BMS [Battlefield Management System]. We have submitted the detailed project report for the TCS and the customer [the Army] is due to finalise the prototype orders and the budgets. We expect an RFP [request for proposal] to be issued in six months.
As for the BMS it could possibly happen next year. The regular products continue. We also expect additional orders in the ongoing Akash missiles programme in a year's time.
Is BEL worried about the private sector's increasing appetite for your core business, Defence?
We have always said competition is good and it is welcome. There is no need to shy away from it. If your products are good, strong and competitive, then the system will take care of it; and the user [Armed Forces] knows you best.
We have competed and won many important bids against Indian and MNC contenders, be it in electronic warfare, communication, radars or night vision devices. We have also lost some. There is enough for everybody, the market is growing, new projects and products are coming up. In fact, everybody can be sustained; you don't have to worry about it. As a 50-year-old company, your strength speaks for you.
Ultimately the two sectors have to compete and collaborate, as we have done in some cases.
How will the investments pan out?
This year too, our capital expenditure will be around Rs. 400 crore. If you include technology, R&D and infrastructure then it would be as high as 20 per cent of the turnover [around Rs. 1,300 crore.]
For the TCS and the BMS projects, we must develop test beds for what we call C4I [command, control, communication, computer & information] systems.
Half a dozen new generation and [AESA] radars have been developed which also need a lot of money [to manufacture]. Then there is the thermal imaging / image intensifier technology for night vision [for soldiers] and normal upgrades.
We are setting up a transducer characterisation facility in Bengaluru to test sonars for the Navy; near-field test ranges for antennas in Ghaziabad and Bengaluru. A 15-acre Corporate Learning Centre is also coming up to train executives.
What is the status of the new missiles facility at Lepakshi?
We are looking at Lepakshi in Andhra Pradesh to start a greenfield facility for all our missile systems, including Akash. We need a single stretch to test the missiles with static and flying targets. These are being done in the Bengaluru factory and at DRDO's Kolar site.
The place is about two hours of travel time [from Bengaluru] along NH7 and well connected. Out of 1,000 acres that we need, about 600 acres have been handed over. It will be an investment of around Rs. 500 crore over three years. By the end of this year we should get the land, set up a few facilities next year and carry out a few missile integration activities.
Please tell us about the partnerships you have planned.
We have identified areas where we would tie up with other players. The venture with Thales of France has identified two to three important radars for future, which will be significant more for technology rather than business – and it will come in about four years.
Right now we are discussing technologies for thermal imagers, image intensifier tubes and new generation products that we may introduce in two or three years.
There will be a lot of tie-ups for C4I, BMS and TCS. We have partnered Rolta for the BMS.
In all these, BEL will be the predominant system integrator and manufacturer. Part of it will come from the partners.
Which are the upcoming products and technologies that are of significance?
We are working on Software Defined Radios (SDRs) for the three Forces. They will be the future mainstay of communication-related factories at Bengaluru, Kotdwara, Panchkula and Ghaziabad.
Some of the radios developed for the Navy are in trials. The versions for the Army and the Air Force will follow and could be against competitive bids.
With 50 years in communication business, we have the first mover advantage in the indigenous SDRs and they fit well within the make in India campaign.
How do you propose to overcome technology hitches for some Defence programmes? Earlier plans for missile seekers and night vision devices, for example, have had issues.
Seekers or missile electronics are a controlled technology and no one will offer them to us. They have to be customised and at best developed by ourselves - which we are doing with the DRDO. Likewise, for the image intensifier tubes, for which we tied up with Photonics and will upgrade the BEL Optronic Devices factory in Pune.
