Ladies and gentlemen, good day, and welcome to the Bharat Electronics Limited Q1 FY 2025 earnings call, hosted by Elara Securities Private Limited. As a reminder, all participants' line will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star then zero on your touchtone telephone. 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, Shubhangi. Good evening, everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY 2025 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 of Finance and CFO, and 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 2024-25. In this Q1, we have achieved a turnover of INR 4,105 crore, which is an increase of 19.1% from the previous year's Q1 results. The profit before tax increased to INR 1,037 crore, as compared to INR 704 crore last year, with a growth of 47.40%. The PBT, profit after tax, is also increased to INR 776.14 crore, as compared to INR 530.84 crore, 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 order book position as on 31 July 2024 is INR 76,705 crore. So on all the parameters, we have shown an upward increase trend. This is a brief financial highlight of Q1 this year. We are now open to question and answer, sir. Thank you very much. Yes. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Yeah. Hi, everyone. Good afternoon, and thanks for the opportunity. First of all, sir, congratulations for a great performance, very strong set of numbers. 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, YoY. 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, revenue growth will be around 15% compared to last year. For the full year. Okay, got it, sir. The second question is on the order flow, guidance. So, despite it being, you know, punctuated by elections, we saw 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 crore. Do you see some, you know, reason for upward revision in this guidance? And if it is possible to mention, can you just let us know the key contracts that were executed this year, this quarter? Okay. So this guidance for this year, what we have promised, INR 25,000 crore, we will definitely retain that, and we will meet this expectation, and we will get this order, INR 25,000 crore. And in that, the major order which we have received in last quarter are BMP-2 Upgrade, the TR module for Thales, and MPR radar for ITR Chandipur. Some spares for our P-15 Bravo ship for communication system, Akash AMC, T-90 Stabilizer Spares, and TLM System. So around INR 4,800 crore plus orders we have received in last quarter. Look, I was talking more about the execution. So can you highlight the major platforms that we have executed in this quarter? Okay. So in the last quarter, we have executed some six, seven main orders. One of them is LRSAM, which we are anyway executing year by year, but this quarter we have achieved around INR 842 crore through this particular project. Then, this CBIC project, which is our civilian sector one project, which we are doing for Central Board of Indirect Taxes, etc. So for them, around INR 300 crore worth of order we executed. One Hammer missile system, we had executed around INR 240 crore, INR 235 crore. Then some Satcom terminals, around INR 143 crore, which we had executed the order. IACCS, the big project which we are executing for last three, four years, so they are also around INR 132 crore. The EW systems, we are supplying so many, but noteworthy is one Shakti EW system, which we have supplied around INR 127 crore worth of equipments. And Lynx U2, that system also for naval requirements, some INR 95 crore. So these are in brief about the major projects which we have executed in this quarter, Q1. Okay, sir. Wonderful. Thank you, and all the best. Okay. Thank you. Thank you. The next question is from the line of Umesh Raut from Nomura India. Please go ahead. Thank you so much for the opportunity. Hi, sir, good evening. Congratulations for the good set of numbers, and wish you all the best for the new start at Bharat Electronics. So my first- Thank you. Basically, on the AON approval that today awarded 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 they are now seeking the proposal for Mark II, which is compatible with Indian Regional Navigation Satellite System. Correct, correct, correct. That is handled by our Chennai unit, and this is totally homegrown, indigenous development by us. And this Mark II, we, we can call it as a Mark II also. Here, it is having capability of NavIC support also. So IRNSS, we call it, IRNSS, restricted service support also will be there in that. So that, we are confident we will supply in time this equipment, because all the technology, basic technology, is already in our control. Got it. Sir, how big this quantum of opportunity could be for us in terms of order flow? 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. Based on that, once we freeze everything with them, we'll definitely come back to you. Got it, sir. My second question pertains to Quick Reaction Surface-to-Air Missile, where we are seeking approval from, final approval from the MOD. So, what exactly currently is 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 are 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, in April to June sometime, we may get this order, because there is a long process with AON, then, they will get sanction, financial sanctions, and then ask a formal RFP, and then, negotiation and then placing order to us. So we are expecting maybe April to June timeframe next year, we may get this order. Got it, sir. Sir, my next question is more of strategic in nature. If I look at your gross margin for the course of last five years, I think we made more of a bottom closer to 42% in FY 2022, and now we are consistently reporting gross margins above 45%. And if I look at, I think, in last two 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%+ gross margin level is more of possible to sustain for the company in the future? Current, current quarter, the gross margin of around 41%-42% only, not 45%. And going forward, as we have already guided, the EBITDA margin, I mean, effectively it will be around 23%-25% is the guidance which we maintain for the current year. Gross margin, we have told 40%-42% will be the range, so 45%+ will certainly not be there. 40%-42% is the range, and EBITDA margin of 23%-25% guidance, what we have given, we maintain that guidance. Okay. Okay, okay. Got it. And, second, is it fair to assume that in, phase-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 program in, the last, say, four years? See, number of product composition is too large. We have got 29 SBU, strategic business units. There are a number of products which coverage is very, very large. So when we are giving the guidance of 40%-42%, it is covering all, it covers LRSAM and all others. So there will be some minor variations up and down between the products, but overall, the gross margin will be expected, is expected to be in the range of 40%-42%. Got it, sir. Sir, last question is with respect to other expenses for the quarter. Those have grew by about 30% year-over-year basis. Was there any major provisioning during the quarter? Yeah, provisions have been there. One, one of course, one is due to the scale of operations, obviously some expenditures go up. That was one reason. The other thing is that provision for MB has slightly gone up. So these are the two major reasons. ... Sir, can you please quantify the LD amount? Provision, yes, provision for LD was in, LD and doubtful debts was more by INR 78 crore during the current quarter, as compared to the last quarter. What it was in the first quarter of FY 2024? I can just give you the figure one minute. It was INR 54 crore last year, and now it is INR 132 crore. Okay. Got it, sir. Thank you so much, and wish you all the best. Okay, thank you. Thank you. The next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead. Hi, sir. Thank you for taking my question. Sir, can you throw some light in terms of few, orders which you expect over the next one or two years? You always highlight that in every call, so I just thought, you know, just on the updated part, you know, any orders which are going back, you know, more getting elongated, any orders which have, you feel, you know, more confident that would come first. Just first on that. Yeah. Okay. So what we are going to get in this year, some major order, one is the ADFCR Atulya. We are expecting that order, very soon. Then, EW suite for Mi-17 V5, for which the trials is almost at the last stage. We are going to get RFP soon. 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. MFR, one, X-band radar for ships, MDL ships, that also a good order. And, GBMES system, EW system for ground base. So that also good order we are expecting. These orders are of the order of INR 1,000 crore-INR 2,500 crore each order. So these are some of the big orders we are expecting this year itself. And next year definitely, as I told, the 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 MF-STAR for Shivalik and Kalvari class of ships, LORA weapon system, and same thing, MRSAM and MF-STAR for NGMV, next generation target, combat weapon systems and sonars for P-75, et cetera. So some 5-6 big, big programs of INR 5,000 to 8-10,000 crore worth of value we are expecting in next 2-3 years. So, sir, thank you first of all, again, for giving this confidence and, you know, highlighting the projects. So in that case, when you started this year order, which you're telling us, where you're confident that you will do INR 25,000 crore 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- Excluding QRSAM, the base order of current year is expected to be INR 25,000 crore, and next year also INR 25,000 crore expected when excluding QRSAM. Including QRSAM, okay. It will be INR 50,000 crore. Correct. Okay. Okay. If QRSAM comes, definitely it will be additional, around INR 20,000 crore-INR 25,000 crore. Got it. So you don't see any slowness that is happening from the government side, which is the fear of a lot of, you know, you know, things will slow down and big pipeline will get elongated. You don't see that happening, from the government side? For the current year, it is in the capex. It's in the range of INR 172,000 crore. Right, sir. Right, sir. Out of which, INR 105,000 crore is earmarked for the domestic procurement itself. Right, sir. Means that we do not see any such thing. The budget also says the same thing, so we do not see any... We do not have any such fears. Great, sir. Thank you very much, and all the best for the future, sir. Thank you, as always. Thank you. Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead. Thank you very much for the opportunity, sir. 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 2025, 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?. Okay. 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 upgrade, 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-INR 5,000 crore worth of different type of equipments, definitely we will have order. So, this INR 4,000 crore-INR 5,000 crore, you are talking about the first set of fighter jets, which will be, I think, 84 in the numbers, or you are talking about the entire 260 units? No, if I am not wrong, Su-30 upgrade right now is planned for first 84 or 100 numbers only, and after that only they will go to the next batch. So the first one itself, we are expecting this much order quantity to us. ...Understood. Sure. 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 six that they are already operating at the moment, this could be a potentially very large opportunity for us. Yeah, definitely AW&C is a large opportunity and a strategic importance for us. So this Netra, you may be knowing, we are supporting them. We are maintaining those aircrafts as well as the 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 radars which are required for this. This time we are going to indigenize some of the radars, driven by DRDO, but BEL is one of the potential partner for them, for these radars. So radars, EW, and communication. Again, all the three subsets in this AW&C, there is a large opportunity for us. Right now, confirmed order point of view, we don't have, except, maintaining AW&C for these three, radar 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. Understood. Sir, just a small question on LCA Mark 1A and eventually Mark 2. Has there been any decision on who will be the production partner for the Uttam radar? So will this be on a single vendor basis, or the order will be divided in certain ratio between two companies? As of now, Uttam radar for first batch of our LCA Mark 1A is given to HAL. HAL is the lead agency, and they will take the radar-related module from one or two 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. Understood, sir. Thank you very much for answering my questions, and all the best. Okay, thank you. Thank you. The next question is from the line of Mohit Pandey from Macquarie Capital. Please go ahead. Yeah. Hi, sir, thank you for the opportunity. So first question is on the potential QRSAM order next year. So how big could that regiment be, the one possible in April to June next year? No, we are expecting more than INR 25,000 crore 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 will become known only when AON 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 crore and above. Understood, sir. So secondly, what would be the proportion of space and services now in the business mix? Recently, it's around 11% services. During the first quarter, the services were around 11%, and goods were around 89%. Okay. So that's, as a proportion of the defense business, this excludes the civilian- No, I'm telling overall services. Overall. Okay. Okay, sir. 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 quantification of what are repeat orders, but we can always tell it is there. Like, for example, after squadrons, we had got earlier six squadrons, later on we got seven squadrons, and the last time we had got earlier for four, six, and again, we got for seven, six. So but the exact term of the repeat orders, at this point in, we do not have the information. Okay, sir. Sure. And sir, lastly, on exports, so, as of now, which would be the top two, three countries which we are exporting products to? Major exports right now is medical electronics related, TR modules for France and compass for Mi-17, etc., gimbal and other things for Elop Design. So these are the major projects which we have executed in this quarter. Overall, we are received orders recently, major orders. That is for onboard naval equipments from L&T for FGZ export. Then something for Airbus. We are continuously, we have got big order for C-295. Solar power plants for Guatemala, we have got very good order now. Then TR module, six and eight -channel TR modules for TRDS, Thales Reliance Defence Systems, that we have got a good order now. And compass, also a good export order from Israel, and we, we have received. ... Great, great. Recently, we have received an export order of EUR 25.75 million. That was from Rafael. That is for supply of TR modules for various platforms, airborne platforms for them. Understood. So sir, last question, is on the other income. So, is there any amount in the other income, or is it largely, interest income on the term deposits? Interest income only. Last week it was interest income only. Okay. Okay. Interest income. Sorry, sorry, I missed the last one. The other income increase is due to the interest income. Understood, sir. Thank you. Thank you so much, sir, and wish you all the best. Okay, thank you. Thank you. The next question is from the line of Dipen Vakil from Phillip Capital. Please go ahead. Thank you so much, so much for the opportunity, and congratulations on a great execution. So my first question is, so you gave us a segmental breakup of the services and. Can you give a similar breakup for defense and non-defense? We have the defense and non-defense. This defense is 84% during the current quarter, non-defense is 14%, and exports is 2%. So, going ahead to FY 2025, do we expect that to maintain like 80-20%, or how do you expect defense and non-defense split to be? 85, 85, 16%. 85% defense, 16% non-defense, typically. Okay. 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 2025 and any capacity augmentation plans? The CAPEX we are already telling in we are. Your question was on CAPEX, no? Hello? Yes. Your query is on the CapEx. Okay. No, no. I did not get your question. Can you repeat once more? Yeah. So I'm asking you about your CapEx plan for FY 2025. The CAPEX is around INR 800 crore, 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 Nemaluru, one more is coming up in Hyderabad, in Ibrahimpatnam. So three, four factories are coming up. One more is coming up in Nagpur. So these are the... And then in addition to this, there are some capital equipment required for the production purpose, so those are also there. All these put together is what INR 800 crore I'm talking about. How many of them will be operational, say, in FY 2025? FY 2025, Ibrahimpatnam unit will be operational in Nemaluru, what we are talking, and others will be in the next year probably. Got it, sir. So our last question, a little bit on the strategic part, part of it, sir. So government has announced a positive indigenization list, and there have been, like, four lists where BEL has been given a certain component that they can only procure from Indian players. So how does BEL view this move, and is there any issue 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? Okay. Our experience of entire PIL is very, very good because these PILs are at system and subsystem level. So these system and subsystems, which were earlier important, now we have indigenous capability to develop them, either our own or with the help of DIU. So that confidence we have given to our defense users, and that's why they have come out with this PIL, based on our capability. So system and subsystem level, we are not finding any issue. But of course, at component level, indigenization is going at very slow pace, component and material level. So that will take its own time because that requires different type of infrastructure beyond our control, like fabs, digital fabs and other things, and even material processing-related things. That will take 5-10 years to become really indigenized, 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 important IP, for which we have already started developing fabless designs. So over a period of 5-10 years, it will take to reasonable indigenize on component level. But at system and subsystem level, whatever PIL dates are committed, we are confident we will achieve that indigenization definitely much earlier than the committed date. Got it, sir. Got it. Thank you so much for answering my question, and all the best for FY 2025. Thank you, sir. Okay, thank you. Thank you. The next question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead. Hi, sir, I hope you can hear me fine. Yeah. Yeah. Sir, just wanted to sort of understand, last year we had some issues with Israel-based supply chain. Is there any sort of revenue that we got this quarter, which was in a sort of issue that, you know, into which FY 2024 we couldn't execute that, and that is sort of hurt us in execution in Q1 or could help us in 1H? Yeah, to some extent, because the Israel war has impacted us little bit in last year. This year, our indication for the first quarter shows that it has eased up. Like I told now, around INR 800 crore plus execution we have done for our LRSAM program. That itself shows that overall situation is in the right direction for us. ... Sure, sir. Maybe just two follow-ups. One, we wanted to sort of understand our contribution to the Pinaka system. Second, just wanted to understand on the fifth indigenization list, what could be the quantum of value 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 to 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 get, 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 timeline happen, after that only Government of India comes out, based on AONs and other. 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 technology. But exact quantification of business, it is too early to tell that. Sure, sir. Those are my questions. Thank you. Okay. Okay, thank you. Thank you. Ladies and gentlemen, this is a gentle reminder. Anyone who wishes to ask a question may press star and one on their touchtone telephone. Thank you. The next question is from the line of Amit Mahawar. Please go ahead, sir. Hi, sir. Congratulations on the great set of numbers. I just have one question on FY 2025 and 2026, the recurring base orders rate of INR 250 billion X of, say, next year QRSAM. What percentage of this is, where we are going to have repeat orders or upgrade orders, and what percentage is the first time supplier funding subsystems? Okay, just let one minute. In the list. So I think, QRSAM is first time for us. LRSAM and MFSTAR are 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% as new, as of now, what looks to us, the orders. So many other programs are there which are first time for us. So- Mm-hmm. More or less, it is around 50/50, we can say. 50% may be repeat orders and 50% are new orders based on the efforts which we have put over last three to four years. Okay. Okay. Maybe I was more asking about X of MFSTAR, MRM, QRSAM. I was more asking about this year and next year, we have INR 50,000 crore worth of orders, which are excluding these large programs. I was asking in that number, sir, if 50%-60% is a repeat order or, you know, more than that. No, excluding this output, the question will be more or less similar only. Same. Okay. Around 50% you can assume as a repeat order. 50% is a new order. Fair. And, and broadly, what percentage of these would be, you know, nomination in terms of again, this year, next year, broadly? Nomination, as of now, these programs, because we only have put all the efforts in these are strategic programs where we have put for last six to eight years R&D efforts, so many of these programs are single tender for us. Understand. 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 is the future projection, around 70%-80% will be, we are expecting to be single tender. Single tender, same. Very helpful, sir. Thank you very much, and wish you good luck. Any change in the 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, you know, which you want to highlight, sir? No, not. No, no, no. Nothing. We are going in right direction, and this is the right combination right now itself, so no major change is expected. Hmm. Thank you, Mr. Jain, and good luck to the entire team. Okay, thank you. Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead. Good evening, sir. I hope I'm audible? Yeah, please carry on. Yeah, my first question pertains to, you know, the operating margins, which have been on the higher side so far, at least in the last few financial years and the start of this year, with reference to your past guidances. So, can you just help us understand what is... I mean, these improvements—are these improvements sustainable, and what is a sustainable gross margin and operating margin we should look for? So we had already guided for a gross margin of around 40%-42% for the current year, and an EBITDA margin of 23%-25%. So we maintain this guidance even now. 23%-25% EBITDA and 40%-42% gross? Yeah, 40%-42% gross, 23%-25% EBITDA. Yeah. Okay. I think it, at the close of FY 2024, you had indicated that, you know, a mid-teen sort of growth is sustainable going ahead. Do you maintain that sort of a growth guidance is possible for this year and the coming two to three years, given your order book? The current year revenue guidance, we already given a growth of 15% as of, as of now. We have got a INR 73,000 crore 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 a little early to comment on that. Based on the QR ten and other bigger programs development, we may see at the end of this year. Before end of this year, we will definitely revise our estimate in case we get these orders in time. Okay. And for the Kavach system, you know, when will you be able to, you know, come out with your prototype, and perhaps also when will you be able to, you know, do commercial supplies? So right now, the Kavach system, railway has told us to develop based on our capabilities and, based on our some proto development, a testbed we have created. Based on that, they have given confidence. They have given us around 18 months timeline 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 18-24 months timeline only, not before. Okay. Is there an interoperability related, you know, issue or challenge that needs to be resolved for Kavach before, you know, you can... A software interoperability or issue which can lead to maybe some delay in commercialization? I don't foresee, because right now also, I think there are three operators, three persons, three companies where the order is coming, and they are reasonably interoperable. Of course, interoperability, as the technology moves forward and some obsolescence issue comes, et cetera, sometime 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, BEL also wants to contribute for establishing that. So that lab, once it is in place, it will solve the interoperability issue to large extent. But as on today, it is not present. But we may foresee sometime, because of technological obsolescence and other things. So for that, we are going in right direction for that, and we also have studied that requirement, and we are developing our system, keeping that requirement in mind. Okay, sir. And sir, from a supply chain perspective, I think for at least for the missile programs, you know, there has been some issue in getting, you know, some subsystem supplies from either the Israeli or the Russian companies. Is that now completely resolved, or do you see some of this, you know, 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 this program they are my partner, so we are having a lot of queries and other concerns we are sharing mutually. So the situation was 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 have 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 exact quantification, I think, BDL team only can tell you better. Okay, sir. Sir, finally from my side, I mean- 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 Vipul Kumar and Anup Chand Shaw from Sumangal Investment. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, any progress on MoU we had signed for battery management system and any progress on Space initiatives? Yeah, this battery management system, are you referring to the Triton one, which we had told two, one or two years back? Yes, sir. So that we, as we already told, we are not factoring that- Yes. there is no progress on that. We are not factoring that into our order intake also, and there, 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 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 got our other players also into this, so listing out all the programs, telling about all the programs is a bit of an issue. So whereas, wherever you are asking anything, we'll be able to tell what are the programs going on, which here 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. Okay, sir, appreciate it. Thank you so much. Okay, thank you. Thank you. The next question is from the line of Satya Sridhar, from Satya Sridhar Stock Research. Please go ahead. Yeah, thank you for taking my question. Congratulations for the good results, sir. Sir, your order book is showing INR 76,705 crore. Okay, 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? Yeah, 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, our some of the factories are coming up. This all will facilitate the growth of, 15% what we are initiating during the current year. And services of an order book as, as we tell that it is of course, around two. Generally, we are expecting to have a order book to revenue ratio of two to three times, generally. Thank you. Thank you. Ladies and gentlemen, this is a gentle reminder, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Aman Vij from Astute Investment Management. Please go ahead. Good afternoon, sir. My questions are on our 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 the exact data, but you can assume it was a fair, assessment, INR 500 crore. This year also we have 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 the figure. So around INR 100 crore you can assume was there in this from fuses. Sure. So just wanted to check, do we have any capacity constraint in this, or we have enough capacity to supply this INR 500 crore worth of fuses every year? No, there definitely is a small capacity limitation because it is indirectly not a capacity limitation, but the Pune unit, we are doing so many other products also. So that's why this fuses we wanted to open up a new line at Nagpur. So over a period of time, next one or two years, we can sustain this type of a production here 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. Sure, sir. What is our current indigenization of these fuses? This is more than 50% already is there, but we are targeting 80%-90% in another two, two and a half years. Sure. And sir, on this part, last part, question was, we had done an MOU with Rostec 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 from these this time and these products? Okay. Firstly, this is a totally different product than what your products we have handled till date, but it is similar product. Like, it is a you can say it is a 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 on the way. It will take another six months to nine months to settle, and then only we can come back to you with the exact quantification of the total business opportunity. But business is huge in this segment, and it is strategic in nature in our line of business only. That's why we have signed this MOU with them. Sorry, just clarification, this is for- Sorry to interrupt. We request that you return to the question queue for follow-up questions. Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead, sir. Yeah, thanks for, you know, taking questions again. So my first one is, I think you are, you are in the process of building up four or five new facilities. Can you share, you know, are they targeted at increasing in-house content, or are they targeted at, you know, increasing revenue? And what sort of impact they can have on top line and costs for you? See, based on today's order book and revenue guidance, what we have given, it is INR 76,000 crore 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 up, to facilitate 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 a very small size, so we are going for a larger factory, slightly 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-house development, means 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 and indigenization is the main key today. Okay. And sir, I mean, Bharat Electronics has always stated that, a lot of work related to, you know, combat helicopters and aircraft and naval frigates and destroyers, comes to BEL. I think a lot of orders have been placed for naval platforms, a lot are there in the pipeline, likewise for LCA and LCH. What is your scope of work 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 opportunity is there for us for all these programs, either directly from users or through HAL or MDL or DRDO, etc. So huge opportunities, that's why we have anticipated more than definitely INR 25,000 crore+ per year order acquisition. Right now, this year we have planned INR 25,000 crore. Definitely next year we will come out with a more revised figure, keeping these business leads in mind. So these all business leads we have captured, and based on that only we are having our future projections we are making. Okay, but is it possible to separately quantify what could be the pipelines from these platforms? Even a ballpark approximate quantification would help. That only happens when the AON is granted, because in AON, the tentative budgets also are there for the quantity. So right now we have clarity, means we know these, these, these type of products, we are either BEL or we have the right product. But the exact quantities of each one of the platform varies- Mm-hmm. just before AON. Okay. After AON only, this will be better quantified for the thing. Till now, we have our own market leads. Leads we can't share at this moment to you, because this is a strategic marketing confidential data for us. Right. When it becomes public domain as AON, that time we will definitely come back to you. Okay, sir. And on the missile- Sorry to interrupt. We may request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your question to one per participants. Thank you. The next question is from the line of Hardik Rawat from IIFL Securities. Please go ahead. Thanks for the opportunity. Sir, I wanted to ask you with regards to the recently concluded Defense Acquisition Council, wherein the, when 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 already supplied ALNS for the army, but that was not having this capability of IRNSS. NavIC, you call it now in the civilian domain. So in defense domain, we call it IRNSS, RF capability. So now they have come out that they want new attempt with this ALNS having capability of IRNSS. That proto we have already developed for that and demonstrated as a technology. Now, after AON, it 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 of the order, you know, INR 500 crore-INR 1,000 crore in this lead itself. The INR 500 crores - INR 1,000 crores in total for under ALNS or INR 500 crores - INR 1,000 for this year? No, not for this year, ALNS. For ALNS? may not come this year because it's still that RFP, then PNC, then placing order. It may go, maybe we are lucky then this year end, otherwise next year only it may be. So not this year, and execution will become three to four 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 three to four years. Okay, got it. Thank you so much. Thank you. The next question is from the line of Viraj Mittani from Jupiter Financial. Please go ahead. Thank you for the opportunity, sir, and congratulations on good set of numbers. Sir, can you give me a better order book in terms of commercial, defense, rail and other segment? Is it possible? Okay, the order book of INR 76,000 crore, you wanted roughly in different heads? Yes. Around, yes, let me see whether I'm having the data to that granularity. Just one minute, please hold on. So the percentage-wise, defense is around 85.8%, and non-defense is around 11.3%, and around 2.9% is export. So that is the breakup between the defense, non-defense and export for this order book, which we have currently. ... Okay, and sir, so, just as, in the years to come, the, the same mix would be there, but the mix will be changing in terms of defense and non-defense? So typically we are aiming average is 85%-15. So 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%. Okay. With Kavach coming in, 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 railway is struggling with the supply. I mean, the vendors are not able to supply the quantities. Knowing BEL infrastructure and capability will invest further by BEL, that's why railway has come forward to us for this development. So but it will take, as I told last, earlier also, some 18-24 months to start generating business or revenues from that business opportunity for BEL, because any order will be split across all the qualified vendors. So the order of INR 20,000-INR 30,000 crore business opportunity is there for BEL, spread across five to six years. Maybe INR 4,000-INR 5,000 crore per year is the business potential for BEL if we successfully complete that, but that will be after two years from today. Tentatively, these are figures which we are looking at. Okay. Thank you, and all the best, sir. Okay, sir. Okay, thank you. Thank you. The next question is from the line of Himanshu Mandal, an individual investor. Please go ahead. Hello, sir. Congratulations for the good numbers, and thank you so much for giving me the opportunity to ask. Sir, see... Yeah. Technical questions and 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, a 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. Thank you so much. So we would not like to comment on such things at this point. But the- Okay, sir. We can't do that yet. Until we have a board approval and other- We cannot comment on. I- those issues now. I totally understand, sir, but that's my first time, you know, I'm joining these kind of calls, and I'm totally happy the way BEL is performing and holding their next assignments and previous assignments, so thank you so much for answering my question at least. Okay. Thank you. Thank you. Ladies and gentlemen, we are taking this as the last question. I now hand the conference over to Mr. Harshit Kapadia for closing comments. Please go ahead, sir. Thanks, Shubhangi. We would like to thank the management of Bharat Electronics Limited, Shri Manoj Jain, Chairman and Managing Director, Damodar, Damodar Bhattad, Director, Financial, CFO, S. Sreenivas., Company Secretary, for giving us the opportunity, and to all analysts, for asking all the questions. Any closing remarks that you want to share with investors, sir? Yeah. So future outlook, as was told earlier, we are committed to that. The revenue growth of 15%, the EBITDA margin of 23%-25%, and order inflow of minimum INR 25,000 crore. So these three, definitely, we are giving further guidance or reassuring that we are going to achieve these targets in this year. Thank you, Mr. Harshit. Yeah. Thank you, sir. Yeah. Thank you. 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. Thank you. Thank you. Thank you.