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Bharat Electronics Ltd
Earnings Call Analysis
Q1-2025 Analysis
Bharat Electronics Ltd
Bharat Electronics Limited (BEL) showcased excellent financial performance in Q1 FY '25, with revenue reaching INR 4,105 crores, marking a 19.1% increase from the previous year. Profit before tax (PBT) surged by 47.4% to INR 1,037 crores, while profit after tax (PAT) also saw a significant rise of 46.2% to INR 776.14 crores. The EBITDA margin improved to 22.82% from 19.28%, and earnings per share (EPS) grew to INR 1.06 from INR 0.73. The company's order book as of July 2024 stands at a substantial INR 76,705 crores, reflecting a robust growth trend【4:0†source】【4:1†source】.
Despite the strong quarterly performance, BEL's management is maintaining a conservative yet positive outlook for the rest of the year. The company has reiterated its full-year revenue growth guidance at 15% and expects to achieve an EBITDA margin between 23% and 25%. This guidance is consistent with previous expectations and indicates a stable growth trajectory【4:0†source】.
BEL reported a solid order inflow, maintaining a target of INR 25,000 crores in new orders for the year. Major contracts contributing to this quarter's performance included BMP-2 upgrades, TR modules for Thales, NPR radars, and communication systems for naval ships. Key executed projects in this quarter were valued at approximately INR 842 crores for various defense and civilian systems【4:1†source】.
Looking ahead, BEL has several large-scale projects in the pipeline, including QRSAM and MSRAM programs and various radar and communication systems for naval and airborne platforms. The company anticipates future orders for these strategic programs to significantly contribute to its revenue and order book. Notably, these programs hold a potential value ranging from INR 5,000 crores to INR 8,000 crores each, over the next couple of years【4:1†source】.
To support its future growth prospects, BEL has outlined a capital expenditure plan of approximately INR 800 crores for FY '25. This investment aims to enhance production capabilities across multiple new factories and facilities in India. The new facilities are expected to become operational in the next fiscal years, facilitating the company's long-term growth strategy .
BEL is committed to increasing indigenization across its products, reducing reliance on imports by developing in-house capabilities and collaborating with DRDO. This strategy aligns with the government's positive indigenization lists. Additionally, BEL has been focusing on expanding its export footprint, with major exports including T/R modules and other electronics components .
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Ladies and gentlemen, good day, and welcome to the Bharat Electronics Limited Q1 FY '25 Earnings Call hosted by Elara Securities Private Limited. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Harshit Kapadia from Elara Securities Private Limited. Thank you, and over to you, sir.
Thanks, Shubangi. Good evening, everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY '25 Conference Call of Bharat Electronics Limited. I take this opportunity to welcome the management of Bharat Electronics represented by Shri Manoj Jain, Chairman and Managing Director; Shri Damodar Bhattad, Director Finance and CFO; Mr. Srinivas, Company Secretary, along with their team. We will begin the call with a brief overview by the management followed by Q&A session.
I'll now hand over the call to Manoj sir for his opening remarks. Over to you, sir.
Okay. Myself Manoj Jain, CMD BEL. I'm pleased to announce the financial highlights of Q1 for financial year '24, '25. So, again, this Q1, we have achieved a turnover of INR 4,105 crores, which is an increase of 19.1% from the previous year Q1 results. The profit before tax increased to INR 1,037 crores as compared to INR 704 crores last year, with a growth of 47.40%. The PAT profit after tax has also increased to INR 776.14 crores as compared to INR 530.84 crores, with a growth of 46.21%. The EBITDA also has increased to 22.82% as compared to 19.28% last year. Same thing is earnings per share, which has also increased to INR 1.06 as compared to INR 0.73 last year. The audit book position as on 1/7/2024 is INR 76,705 crores so on all the parameters, we have shown an upward increased trend. This is a brief financial highlight of Q1 this year. We are now open to question and answers, sir.
[Operator Instructions] The first question is from the line of Amit Dixit from ICICI Securities.
I have a couple of questions, the first one is on the revenue guidance. If you look at the revenue, it has grown up by almost 20% in this quarter Y-o-Y. Now what kind of guidance would you like to give for the full year, given that first quarter has been quite strong. So that is the first question.
We would like to maintain the guidance we have given already in our previous con call, which will be 15%. So the revenue growth will be around 15% compared to last year for the full year.
The second question is on the order flow guidance. So despite it being punctuated by elections, we saw a pretty healthy order flow for the company. Now in the last con call, we again gave a guidance for the order flow to be around INR 25,000-odd crores. Do you see some reason for upward revision in the guidance? And if it is possible to mention, can you let us know the key contracts that were executed this year -- this quarter?
So this guidance for this year, what we had promised INR 25,000 crores, we will definitely retain that and we'll meet this expectation, and we will get this order of INR 25,000 crores. And in that, the major order which we have received in last quarter, are BMP-2 upgrade, the TR modules for Thales and NPR radar for our ITR Chandipur from -- for our P15-Bravo ship for communication systems, Akash AMC, T-90 stabilizer spares and CMS system. So around INR 4,800 crores plus orders we have received in last quarter.
Sir, I was talking more about the execution. So can you highlight the major response that we have executed in this quarter?
Okay. So in the last quarter, we have executed some 6, 7 main orders. One of them is [indiscernible], which we are anyway executing year by year. But this quarter, we have achieved around only INR 842 crores through this particular project. Then the CBIC project, which is our civilian sector one project, which we are doing for Central Board of Indirect Taxes, et cetera. So for them around INR 300 crores worth of order we executed. One Hammer missile system, we had executed around INR 240 crores to INR 235 crores. Then some Satcom terminals around INR 143 crores, we had executed the order. IACCS is a big project, which we are executing for the last 3, 4 years. So they are also around INR 132 crores. The EW systems, we are supplying so many, but noteworthy is 1 checked EW systems which we have supplied around INR 127 crore worth of equipment and LYNX U2 that system also for naval requirement from INR 95 crores. So these are in brief all of the major projects which we have executed in this quarter, Q1.
The next question is from the line of Umesh Raut from Nomura India.
So my first, basically, on the AO approval that today accorded by Defense Ministry with respect to Advanced Land Navigation System. So could you please throw some light how big this opportunity for us in terms of orders in the future?
Which one can you please repeat, Advanced Land?
Advanced Land Navigation System, ALNS, I think we have already delivered Version 1 to the Indian Armed Forces previously. I think we are now seeking the proposal for MK-II, which is compatible with Indian regional navigation satellite system?
Correct. That is handled by our Chennai unit, and this is totally homegrown indigenous development by us. And this Mark-II, we can call it as a Mark-II also. Here it is having capability of NavIC support also. So IRMSS we call it IRMSS restricted service support also will be there in that. So that we are confident we will supply in time with equipment because all the basic technology is already in our control.
Sir, how big this quantum of opportunity could be for us in terms of order inflow?
That I can't tell you at this moment of time till MOD gives us the real value because it depends on the quantity and other configuration-related details. So based on that, once we freeze everything with them, we'll definitely come back to you.
My second question pertains to quick reaction to surface to air missile where we are seeking final approval from the MOD. So what exactly currently the status regarding that program? And how soon we can expect that order to come in?
This order all the trials and everything has been completed successfully. So many other lab reports and other things also were given to them to the user, and it is satisfactory, all the things. So all the paperwork is done for this. And they have asked some budgetary quotes from us. I hope by beginning of next year this April to June sometime, we may get this order because there is a long process between AO and then they will get some financial concerns and then ask their formal RFP and then negotiation and then placing orders to us. So we are expecting maybe April to June time frame next year, we may get this order.
Sir, my next question is more strategic in nature. If I look at your gross margin over the course of last 5 years, I think we made more of a bottom closer to 42% in FY '22. And now we are consistently reporting gross margins about 45%. And if I look at, I think, in last 2 years, especially whatever orders we have received, those are largely from base products or largely from a substitute for imported products. So I think we are certainly now moving towards better gross margin trajectory. Is it fair to assume that 45% plus gross margin level is more of possible to sustain for the company in the future?
Current quarter, the gross margin of around 41%, 42% [indiscernible] and going forward, as we have already guided, the EBITDA margin, I mean, effectively will be around 23% to 25% is the guidance which we maintain for the current year. Gross margin, we accrued 40% to 42% will be the range. So 45-plus will certainly not be there, 40% to 42% is the range and EBITDA margin up 23% to 25% guidance what we have given, we maintain that guidance.
And second, is it fair to assume that in base wise execution for programs like LRSAM, you are getting incremental learning curve in terms of better cost saving, and that's how you are also reporting better profitability on same programs in the last, say, 4 years?
The number of products composition is too large. We have got 29 SBU strategic business units where a number of products we cover is very, very large. So when we are giving the guidance of 40% to 42%, which is covering. This covers LRSAM and all others. So there will be some minor variations up and down between the products. But overall, the gross margin is expected to be in the range of 40% to 42%.
Sir, last question is with respect to other expenses for the quarter. Those have grew by about 30% year-on-year basis. Was there any major provisioning during the quarter?
Yes, provisions have been there. One, of course, is due to the scale of operations, obviously, some expenditures go up, so that was one reason. The other thing is that provision for AMD has slightly gone up. So these are the 2 major reasons.
Sir, can you please quantify the LD amount?
Provision for LD has been [indiscernible] shot more by INR 78 crores during the current quarter as compared to the last quarter.
And what it was in the first quarter of FY '24?
I can just give you the figures on the -- it was INR 54 crores last year, and now it is INR 132 crores.
The next question is from the line of Nitin Arora from Axis Mutual Fund.
Sir, can you throw some light in terms of few orders which you expect over the next 1 or 2 years? You always highlight that in every call, so I just thought just on the updated part any orders which are going back more getting elongated, any orders which you feel more confident that would come first. Just first on that.
Yes. Okay. So what we are going to get in this year, some major order. One is ADFCR-ATULYA. We are expecting that order very soon, then EW suit for our Mi-17V5 for which the trials has been almost at the last stage, we are going to get RFP tool. Then security and surveillance system for army, that is for their army depots, et cetera. We are expecting a good order from that. Mountain radar also a good order is expected in this year. [indiscernible] radar for ships NDMD ships, that also a good order and GBMES system, EW system for ground-based so that's also a good order we are expecting. These orders are of the order of INR 1,000 crores to INR 2,500 crores each order. So these are some of the big orders we are expecting this year itself.
And next year, definitely, as I told a QRSAM is the biggest order we are expecting. But in addition, we are having a very good lead right now and good progress has been done. On MRSAM and MFSTAR for Shivalik and Talwar class of ships LORA weapon system and same thing MRSAM and MFSTAR for [ NGT ] next generation combat weapon systems and SONARs for P-75, et cetera. So some 5, 6 big, big programs of INR 5,000 crore to INR 8,000 crores worth of value, we are expecting in next 2 to 3 years.
So in that case, when you started this year, order which you were telling us where you're confident that you will do INR 25,000 crores of order inflow and you're also highlighting the next year as well. So in that case, even next year, do you expect a growth on such INR 25,000 crore order intake because QRSAM itself will be a very big order.
So it's excluding QRSAM, the base order of current year is expected to be INR 25,000 crores and next year also INR 25,000 crores expected when excluding QRSAM so -- will be INR 50,000 crores. And if QRSAM comes, definitely it will be additional around INR 22,000 crores, INR 25,000 crores.
So you don't see any slowness that is happening from the government side, which is the fear of a lot of investors right now that things will slow down and big pipeline will get elongated. You don't see that happening from the government side?
[indiscernible] for the current year, the capital is the range of INR 1.72 lakh crores [indiscernible] and out of which INR 1,05,000 crores is earmarked for the domestic procurement itself. So we do not see any such thing, the budget also says the same thing. So we do not really -- we do not have any such fears.
The next question is from the line of Harshit Patel from Equirus Securities.
So my first question is with respect to the SUKHOI-30 upgrades it seems that this program will pick up the pace very soon. Hindustan Aeronautics also expects this order to come in FY '25 or at least by FY '26. So what will be the different subsystems that we will supply over here? And what could be our work share out of the total order, which will be placed on HAL?
Actually, we don't have exact figures of what HAL may get order. We only know our electronics components, which are going to be there in Su-30 upgrade. So there are various subsystems, which we are planning for Su-30 upgrades, including Radar because in Su-30 upgrade this time, a radar also is planned to be inducted, Indian origin. So that then EW system, then some radios and other communication systems. So that way, we are expecting in the Su-30 upgrade around INR 4,000 crore to INR 5,000 crores worth of different types of equipment, definitely, we will have orders.
So this INR 4,000 cores to INR 5,000 crores, you were talking about this first set of fighter jets, which will be, I think, 84 in the numbers? Or you were talking about the entire 260 units?
No. If I am not wrong, Su-30 upgrade right now is planned for first 8,4 or 100 numbers only. And after that only, they will go to the next batch. So this first one itself, we are expecting this much order quantity to us.
Sir, my second question is with respect to the NETRA airborne warning systems. So has there been any progress on that in terms of DRDO finalizing who will be the production partners for various systems and subsystems in that given that Air force has projected a requirement of around 12 more such platforms, along with the 6 that they are already operating at the moment. This could be a potentially very large opportunity for us.
Yes. Definitely, AEW&C is a large opportunity and strategic importance for us. So this NETRA you maybe knowing we are supporting them. We are maintaining those aircrafts as them as a lead agency. And we have right expertise for this segment. Various subsystems, which are planned now in the next order are already in pipeline. We are having discussions, including some radar, which are required for this time, we are going to indigenize some of the radars driven by DRDO, but that is one of the potential partner for them for these radars. So Radars, EW and communication, again all the 3 subsets in this AEW&C, there is a large opportunity for us.
Right now confirmed order point of view, we don't have, except maintaining AEW&C for these 3 platforms. That itself is a very good opportunity for us to understand all other subsystems. And we are in the process of indigenizing many more subsystems in that.
Sir, just a small question on LCA Mark-1A and eventually Mark-II. Has there been any decision on who will be the production partner for the Uttam radars. So will this be on a single vendor basis or the order will be divided in certain ratio between 2 companies?
As of now, Uttam radar for first batch of our LCA Mark-IA is given to HAL. HAL is the lead agency. And they will take the radar-related module from one of these 2 companies, that decision is not yet taken. But the lead integration for this radar will be done by HAL for the first batch. Next batch, they may review based on the performance and other things, other parameters. They may select BEL also. But as of now, it is HAL who is leading all the integration activities.
The next question is from the line of Mohit Pandey from Macquarie Capital.
First question is on the potential QRSAM order next year. So how big could that regiment fees or the one possible in April to June next year?
No, we are expecting more than INR 25,000 crores order for QRSAM, but the value may change based on the final configuration, number of regiments, number of missiles to be added as per regiment, et cetera. That is a strategic call, which our Indian Air Force and Indian Army are taking. The final configuration we come to know only when AOM is awarded. So that we are expecting very soon. So once that is there, we will get the final figure. But definitely, it will be INR 25,000 crores and above.
Sir, secondly, what would be the proportion of first [ payers ] and services now in the business mix?
Presently, it's around 11% services during the first quarter, the services are around 11% and goods are around 89%.
So that's as a proportion of the defense business, this excludes the civilian...
No, no, actually overall services.
Overall. Sir, and thirdly, within the current order book, what would be the proportion of repeat orders for example, orders that you've executed previously and getting repeat for broadly?
We don't have the exact certification of what are repeat orders, but we can always tell this, for example, squadrons, [indiscernible] 6 squadrons, later on we got 7 squadrons and the last time, we have got earlier for 4 states. And again, we got for 7 states. But the exact quantum of the repeat orders at this question, we do not have the information.
And sir, lastly, on exports. So as of now, which would be the top 2, 3 countries which we are exporting products to?
Major exports right now is the medical and electronics-related, T/R modules for [indiscernible] and a compass for the Mi-17 et cetera, [indiscernible] and other things for [indiscernible]. So these are the major projects which we have executed in this quarter. Overall, we have received orders recently, major orders. That is for onboard level equipments from L&T or SEZ export then something for Airbus, we have continuously, we have got big order for C295. Solar power plants for Guatemala, we have got very good orders now. Then T/R module -- 6 and 8 channel T/R modules for TRDS Thales Reliance Defense that we have got a good order now. And a compass also a good export order from Israel and which we have received. Recently, we have received an export order of EUR 25.75 million that was from TRDS. So that is for supply of T/R modules for various platforms, airborne platforms for them.
Sir, last question is on the other income. So is there any one-offs in the other income? Or is it largely interest income on the term deposits?
largely, it is on interest income only.
Sorry sir, I missed the last one.
The other income increase is due to the interest income.
The next question is from the line of Dipen Vakil from Philip Capital.
Sir, first question is you gave us the financial breakup of services and goods. Can you give a similar breakup for defense and non-defense?
We have the defense and non-defense also, one second. Defense is 84% during the current quarter, nondefense is 14% and export is 2%.
And going ahead to FY '25, do we expect that to maintain like 80%, 20%? Or how do you expect our defense or non-defense mix to be?
85%, 15% -- 85% defense, 15% non-defense typically.
And so this year, so as you mentioned that we have 25 different line units working simultaneously so any CapEx plans that are there for FY '25 and any capacity augmentation plans?
See, CapEx, we are already -- your question was on CapEx? I did not get your question, can you repeat once more?
Yes. So I'm asking about your CapEx plan for FY '25?
CapEx is around INR 800 crores is planned during the current year.
Okay. And what areas are we planning to do this CapEx on?
There are quite a few factories coming up, as you may be knowing, already, one is coming up in Palasamudram, one is already almost completed in Nimmaluru, one more is coming up in Hyderabad in Ibrahimpatnam. So 3, 4 factories are coming up. One more is coming up in Nagpur so these are -- addition to this, there are some capital equipments required for the production purpose. So those are also there. All this put together is what INR 800 crores I'm talking about.
And how many of them will be operational, say, in FY '25?
FY '25 Machilipatnam will be in operation. Nimmaluru what we are talking and others will be in the next year.
Sir. Last question a little bit on the strategic part of it. The government has announced a positive energization list, and there have been like 4 lists where BEL has been given a certain competence that they can only procure some Indian players. So how does BEL view this? And is there any issues with scaling up or supply chain issues that the BEL faces in procuring any components or how has been the BEL's experience with entire PIL?
Our experience of the entire PIL is very, very good because these PILs are a system and subsystem level. So these system and subsystems, which were earlier imported, now we have indigenous capability to develop them either our own or with the help of DRDO. So that confidence we have given to our defense users, and that's why they have come out with this PIL based on our capabilities. So system and subsystem level, we have not signed in any issue. But of course, that component level indigenization is going at a very slow pace component in material level. So that will take its own time because that requires a different type of infrastructure beyond our control, like fabs, digital fabs and other things, and even material processing related things. That will take 5 to 10 years to become really indigenize most of those component level indigenization.
There also, we are attempting to develop some of the technologies, including some of the chipsets ourselves, fabless designs, we have already started. But once the fab comes in India, we wanted to be the first user of those fabs for strategic importance IC. For this year, we have already started development satellite systems so over a period of 5 to 10 years, it will take a reasonable indigenize on component level. But at system and subsystem level, what's your for PIL dates are committed. We are confident we will achieve that indigenization definitely much earlier than the committed dates.
The next question is from the line of Deepak Krishnan from Kotak Institutional Equities.
Sir, I just wanted to sort of understand, last year, we had some issues with the Israel-based supply chain. Is there any sort of revenue that we got this quarter, which was in a sort of issue that in FY '24, we couldn't execute that and that does an execution in 1Q or could help us in 1H?
Yes. To some extent, because of Israel war has impacted us a little bit in last year. This year, our indication for the first quarter shows that indeed has easen up like I told around INR 800 crores plus execution we have done for our LRSAM program. That itself shows that the overall situation is in the right direction for us.
Sir, maybe just 2 follow-ups. One, we wanted to sort of understand our contribution to the Pinaka system? And second, I just wanted to understand on the fifth indigenization list, what could be the quantum of value of products at BEL would have to indigenize over a period of time?
Pinaka per se, we are not having direct contribution. We are only supplying some subsystems related to communication interface and other things so other companies because Pinaka order is received by other companies, not by BEL. But we are supplying to those companies, some subsystems.
Okay. Right now, we don't have any plans to manufacture Pinaka because that is a long-term process, and we are just developing our capabilities for manufacturing Pinaka, but it will take some time. But of course, we are supplying some subsystems which are required by these agencies. And your second question was regarding PIL?
Yes.
PIL as such, we don't quantify how much business we are going to that because PIL only gives the direction that these items in future as a cutoff date will be procured from Indian companies only. But the future quantities there is not committed right now. So that data as and when that cutoff time lines happen. After that, only government of India comes out based on AOMs and others. So then only we can quantify the exact business volume. But definitely, there is a requirement that we know that's why we are indigenizing. That's why we are putting efforts to develop those technologies. But exact quantification of business, it is too early to tell that.
The next question is from the line of Amit Mahawar.
I just have one question on FY '25 and '26, the recurring base order rate of 250 billion x of, say, next year, QSM. What percentage of this is where we are going to have repeat orders or upgrade orders? And what percentage is the first time supply of any subsystems?
Okay. Just like one minute. So I think QRSAM is first time for us, MRSAM and MFSTAR the second biggest order which we are going to expect, that may be partially repeat only, third biggest order, again, LORA is new order. So fourth again is repeat. So I can tell you around 50%, you can assume as repeat and 50% is new. As of now, we must look to -- we had so many other programs are there, which are first time for us. So more or less, it is around 50-50, we can say, 50% may be repeat orders and 50% are new orders based on the upward, which we have put over the last 3 to 4 years.
Okay. Really I was more asking about x of MFSTAR, MR and QRSAM. I was more asking about this year and next year, we have INR 50,000 crores worth of orders, which are excluding these large programs. I was asking in that number, sir. If 50%, 60% is a repeat order or more than that?
No. Excluding this also it's actually will be more or less similar only. Around 50%, you can assume as a repeat order, 50% is a new order.
Fair. And broadly, what percentage of these would be nomination in terms of again this year and next year broadly?
Nomination as of now -- these programs because we only have put all the efforts and with our strategic programs where we had put for last 6 to 8 years, R&D efforts. So many of these programs are a single tenders for us because we only have done all the investments in that. So as of now, I think out of the leads what we have or what the future projections, around 70% to 80% we are expecting to be single tenders.
Any change in terms from MOD in terms of the working capital requirements or the criteria of when you submit the cost sheets and get the approval? Any important changes have happened, which you want to highlight, sir?
No, nothing. They are going in the right direction. And this is the right combination right now itself. So no major events as expected.
The next question is from the line of Gagan Thareja from ASK Investment Managers.
My first question pertains to the operating margins, which have been on the higher side so far at least in the last financial year and the start of this year with reference to your past guidances. Can you just help us understand what is -- I mean, are these improvements sustainable? And what is a sustainable gross margin and operating margin we should look for?
we had already guided for a gross margin of around 40% to 42% for the current year and an EBITDA margin of 23% to 25% so which we maintain this guidance even now.
23 to 25 EBITDA and 40 to 42 gross?
Yes, 40 to 42 gross, 23 to 25 EBITDA, yes.
And I think at the close of FY '24, you had indicated that mid-teens sort of growth is sustainable going ahead, you maintain that sort of a growth guidance is possible for this year and the coming 2, 3 years, given your order book?
The current year revenue guidance, we have already given a growth of 15% as of now. We have got a 76,000 order book and 15% growth guidance is what we have given. Current quarter, as you know, we have already grown by 19%. We maintain this revenue growth guidance of 15%. As far as the next year is concerned, I think it's still a little early to comment on that.
Based on the QRSAM and other bigger programs development, we may see at the end of this year, before end of this year, we will definitely revise our estimates in case we get this orders in time.
Okay. And for the Kavach system, when will you be able to come out with your prototype and perhaps also when will you be able to do commercial supplies?
Right now, the Kavach system Railway has told us to develop based on our capabilities. And based on our some proto development, a test bed we have created. Based on that, we have given confidence. They have given us around 18 months' time line for developing of the proto. We are confident definitely we will achieve it before than that only. And after that, only the commercial business-related orders can come so orders are expected after 18 months to 24 months time line only, not before.
Is there any interoperability related issue or challenge that needs to be resolved for Kavach before you can a software interoperability or issue, which can lead to maybe some delay in commercialization?
We don't foresee because right now also, I think there are 3 operators, 3 persons, 3 companies where the order is coming and they are reasonably interoperable. Of course, interoperability as the technology moves forward and some obsolescence issues comes, et cetera, sometimes, some patch or some other hardware may have interoperability issues. I think for that, Railway has come out with some software test lab where, again, well also wants to contribute for establishing that. So that, once it is in place, it will solve its interoperability issue to a large extent. But as on today, it is not present. But we may foresee some time because of technological obsolescence and other things. So for that, they are going in the right direction for that. And we also have studied that requirement, and we are developing our system, keeping that requirement in mind.
and sir, for supply chain perspective, I think, or at least for the missile programs, there has been some issue in getting some subsystem supplies from either the Israeli or the Russian companies. Is that now completely resolved or do you see some of this especially pertaining to MRSAM perhaps creeping up and coming back in the future as well?
No. It is not resolved directly. Although these components have not directly affected BEL, it is affected BDL a bit more. So this question you should actually ask BDL team. But I know based on our technical interaction with them because for these programs, they are my partner. So we are having a lot of queries and other concerns we are sharing literally. So the situation was a problem, but we are in the right direction, and it is under control now. There were some challenges because of some supplies of subsystems from Israel as you are rightly told. But that challenge is now overcome. Now it is the volume game to catch up again for this. So that is happening. And the exact quantification, I think BDL team only can tell you better.
Sorry to interrupt. I request Mr. Gagan to return to the question queue for follow-up questions as there are several participants waiting for their turn. The next question is from the line of Vipulkumar Shah from Sumangal Investments.
Sir, any progress on MOU we have signed for a battery management system and any progress on SaaS initiative?
This battery management system were you referring to the Triton one, which we had sold one or two years back?
Yes, sir.
So that as we already told you we are not factoring so there is no progress on that. We are not factoring that into our order intake also. And there is not much progress into that. So we are not counting on that.
Okay. And sir, one small suggestion, if you can put a presentation on your site, where all the orders and orders are pertaining to which programs are there, that will be really helpful and the orders executable over what time frame? It will really help us to understand the company better. This is a small suggestion, sir.
Please understand one thing that we are in a zone where we have worked our other players also into this. So listing out all the programs, filling about all the programs is a bit of an issue. So very fair [indiscernible] you are asking anything, we'll be able to tell what are the programs going on, whichever can be told. But there could be certain other programs which we would not like to tell at this point of time. So it is like that.
The next question is from the line of Satya Sridhar from Satya Sridhar Stock Research.
Sir, your order book is showing INR 76,705 crores, this is a much bigger number compared to our annual turnover. How many years would this be executed in? And do you need any new capacity expansion to execute this?
Yes. Our CapEx plans are already in place to facilitate the growth what we are talking of 15% growth, what we are planning this year and, of course, for next year, it is early to tell. But some of the factories are coming up. These all will facilitate the growth of 15% what we are initiating during current year and [indiscernible] order book as we tell that it is, of course, around 2. Generally, we are expecting to have an order book to revenue ratio of 2 to 3x generally.
The next question is from the line of Aman Vij from Astute Investment Management.
My questions are on fuses segment. So we were supposed to supply around INR 500 crore worth of fuses every year. So how much have we supplied in Q1?
Let me check, we may not have that much detail, but we are continuously supplying fuses now since, I think, last 1 year and production is going on. And the fuses are not like a pulse. They are a continuous supply. So you can assume although I don't have exact data, but you can assume it will be a fair assessment of INR 500 crores. This year also we had planned roughly so divide by 12 into 3. Roughly, that much value will be there, but exact value I don't have -- but because this year production is a continuous production type of thing. So exact data, I can share with you later on, but you can roughly assume this is a figure. So around INR 100 crores you can assume what they are invested from fuses.
So just wanted to say, do we have any capacity constraint in this? We have enough capacity to supply this INR 500 crore worth of fuses every year?
No, definitely, there is a small capacity limitation because it is indirectly -- not a capacity limitation. But today, we are doing so many other products also. So that's why these fuses we wanted to open up a new line at Bilaspur. So over a period of time. So next one or 2 years, we can sustain this type of production without compromising on our other products. which are being manufactured at Pune. But over a period of time, we wanted to do all the manufacturing of fuses in our Nagpur plant.
And what is our current indigenization of the fuses?
This is more than 50% already is there, but we are targeting 80% to 90% in another 2, 2.5 years.
And sir, on this part, last part, question was, we had done an MOU with Rosoboronexport Russia for various kind of ammunition so if you can talk about the same, will this help in increasing the indigenization of the current supply which we need to do or this is a very separate product and separate. And if it is a separate product, what kind of opportunities can we look at this time in these products?
Okay. Firstly, this is a totally different product than whatever products, we have handled till date but it is similar product, like it is -- you can say it is an upgraded version of the fuses what we are supplying, and it is for the different type of ammunition. We have just signed an MOU right now. The details of the business volume work share keeping the indigenization content more than 50%, those detailed discussions are underway. It will take another 6 months to 9 months to settle and then only we can come back to you with that, expect quantification of the total business opportunity. But business is used in this segment, and it will be strategic in nature in our line of business only. That's why we have signed this MOU with them.
Sorry to interrupt. We request that you return to the question queue for follow-up questions. The next question is from the line of Gagan Thareja from ASK Investment Managers.
So my first one is I think you are in the process of building up 4 or 5 new facilities. Can you share are they targeted at increasing in-house content or are they targeted at increasing revenue? And what sort of impact they can have on top line and costs for you?
Based on today's order book and revenue guidance, what we have given, it is INR 76,000 crores and a 15% growth target in revenues. Now as we go forward, obviously, we'll be planning for more growth so to facilitate this expansion as the volumes go to facility the expansion, we require new factories. So that is how Hyderabad factory, we are building one more factory, for Machilipatnam we are doing one more factory because Machilipatnam factory was of a small size. So we are going for a larger factory so it is a larger factory. One more is coming up in Palasamudram also in Andhra Pradesh. So these are the facilities to facilitate the growth what we are planning for the coming years.
So in our development with indigenization definitely is there at all the factories all the time. So it is not that because of in-house activities we are developing the factory. But every factory, wherever we are investing further or where we are producing right now, in-house development or indigenization is the main key today.
I mean, Bharat Electronics has already stated that a lot of work related to combat helicopters and aircraft and naval frigates and destroyers comes to BEL. I think a lot of orders have been placed or naval platforms, a lot are there in the pipeline likewise for LCA and LCH, what is your scope of growth and what potential order pipeline do you see from this?
So definitely, the big platforms of naval variety or airborne variety, majority of the electronics comes from BEL. So huge business opportunities there for us for all these programs either directly from users or through HAL or MDL or the RFP et cetera. So huge opportunities, that's why we have anticipated more than definitely INR 25,000 crores plus per year order acquisition.
Right now, this year, we have planned INR 25,000 crores. Definitely next year, we will come out with a more revised figures, keeping this business list in mind. So these all business lists we have captured and based on that only, we are having our future projections we are making.
But is it possible to separately quantify what could be the pipeline on these platforms even the ballpark approximate quantification would help?
That only happens when the AoN is granted because AoN, tentative budgets also are there for the quantity. So right now, we have quality means we know these type of products, we are either [ BNE ] or we have the right product. But the exact quantities of each one of the platform varies, just before AoN. After AoN only, this will be better quantified for the thing. Until now, we have our own market leads, leads that we can't share at this moment to you because this is a strategic marketing confidential data for us. If it becomes public domain at AoN, that time we will definitely come back to you.
Sorry to interrupt we may request that you return to the question queue for follow-up questions. [Operator Instructions] The next question is from the line of Hardik Rawat from IIFL Securities.
Sir, I wanted to ask you with regards to the recently concluded different acquisition council wherein the council has decided to pass AoN for advanced land navigation system for Army. What is this -- what scope does this entail for us as a company in terms of order pipeline? And when should this turn into order inflow for us?
We are already supplied ALNS for the Army, but that was not having this capability of IRNSS NavIC you call it in the civilian domain [indiscernible] capabilities. So now they have come out that they want new attempts with this ALNS having capability of IRNSS. That proto we have already developed before that and demonstrated as a technology. Now after AoN, which is again a long-term process of issuing RFP and then sometimes they ask for NCNC trials once more although we have given them some proto demo. So after that only the real order comes to us. We expect the order to the tune of INR 500 crores to INR 1,000 crores in this lead itself.
So the INR 500 crores to INR 1,000 crores in total for under ALNS or INR 500 crore to INR 1,000 crores for this year?
Not for this year, ALNS. Not from this year because it's still that RFP, then [indiscernible] order. It may go maybe if we are lucky then this year end otherwise next year only it may be. So not this year and execution will be some 3 to 4 years because these are also for various platforms. So it takes its own time. Logistics and other issues are there for users also. So generally, based on our previous experience, it will be spread over 3 to 4 years.
The next question is from the line of Viraj Mithani from Jupiter Financial.
Sir, can you give me a bit of an order book in terms of commercial, defense, rail and other specs. Is it possible?
So order book of INR 76,000 crores, you wanted roughly in different heads?
Yes.
Let me see whether I'm having the data to that granularity. So defense is around 85.8%, and nondefense is around 11.3% and around 2.9% is export. So that is a breakup between the defense and non-defense and export for this order book, which we have currently.
And sir, so just the years to come, whether the same mix would be there or the mix would be changing in terms of defense and non-defense?
So typically, we are aiming average is 85%, 15%. 85% defense, 15% non-defense. Minor 1% or 2% variations are there between these combinations because of the different type of product mix, sometimes it happens. But on an average, it is 85%, 15%.
With Kavach coming is the non-defense value go up in terms of percentage? And what is the size of opportunity for Kavach, sir?
Kavach is actually a very big program. And right now, I believe railways is struggling with the supply means vendors are not able to supply the quantity knowing the well infrastructure and capability to invest further by BEL. That's why railway has come forward to us for this development. But it will take, as I told you earlier also, some 18 to 24 months to start generating business revenues from that business opportunity for BEL because any order will be splitted across all the qualified vendors. So the order of INR 20,000 to INR 30,000 crores business opportunity is there for BEL spreaded across 5 to 6 years. So maybe INR 4,000 crore to INR 5,000 crore per year is the business potential for BEL if we successfully complete that. But that will be after 2 years from today. Tentatively these are figures which we are looking at.
The next question is from the line of Himanshu Mandel, an individual investor.
Sir, see, the technical questions and the financial questions as I'm individual investor. So those questions and answers, I'm hearing. And I'm so positive by holding my stakes with BEL, I have only one maybe question in others' mind as well that are we -- I mean, is BEL also planning to give some bonus to their investors or something like this? Because other questions, technically, people are asking and I'm totally happy with those answers.
So we would not like to comment on such things at this point. Until we have a board of [indiscernible] and others, we cannot comment on such...
I totally understand, sir. But -- and that's my first time I'm joining these kind of calls, and I'm totally happy the way the BEL is performing and holding their next assignments and previous assignments.
Ladies and gentlemen, we are taking this as a last question. I now hand the conference over to Mr. Harshit Kapadia for closing comments. Please go ahead, sir.
Thanks, Shubangi. We would like to thank the management of Bharat Electronics Limited, Shri Manoj Jain, Chairman and Managing Director; Damodar Bhattad, Director of Finance and CFO; Srinivas as Company Secretary for giving us an opportunity and to all analysts for asking all the questions. Any closing remarks do you want to share with investors, sir?
Yes. So future outlook, as was told earlier, we are committed to that. The revenue growth of 15%, the EBITDA margin of 23% to 25% and order inflow of minimum INR 25,000 crores. So these 3 definitely, we are giving further guidance or reassuring that we are going to achieve this target in this year.
Thank you. On behalf of Elara Securities Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.