Ladies and gentlemen, good day, and welcome to Bharat Electronics Limited, Q2 FY 2025 earnings conference call, hosted by Nomura Financial Advisory and Securities. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on a touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Umesh Raut from Nomura. Thank you, and over to you, sir. Thanks, Steve. Good afternoon, everyone. On behalf of Nomura, we welcome you all for the Q2 FY 2025 conference call of Bharat Electronics Limited. I take this opportunity to welcome the management of Bharat Electronics, represented by Sri Manoj Jain, Chairman and Managing Director, Sri Damodar Bhattacharyya, Director of Finance and CFO, Sri Sreenivas, Company Secretary. I'll now hand over the call to the company management for their opening remarks. Thank you. Yeah. Good morning, good afternoon, everybody. Myself, Manoj Jain, CMD, BEL. I will just touch upon financial highlights up to Q2, financial year 2024, 2025. So, in this Q2, we have achieved the turnover to INR 8,530 crores, as compared to INR 7,365 crores up to Q2 of last year, with a growth of 15.83%. And profit before tax has also increased to INR 2,488 crores, as compared to INR 1,777 crores, which was there up to last year, Q2, with a growth of 40.05%. The profit after tax also has increased to INR 1,867 crores, as compared to INR 1,343 crores in the last Q2, 2023, 2024, with a growth of 39.03%. The EBITDA also has increased to 27.26% up to Q2 of 2024-2025, as compared to 22.66% last year. The earnings per share has also increased to INR 2.55, as compared to INR 1.84 in the last year, at the same time at Q2. The order book position as on first of October 2024 is INR 74,595 crore. So overall, on all the financial parameters, we have achieved a good growth in up to Q2. This is a brief opening remarks from my side. So we leave it to you for taking up the question- and- answer session, Umesh. You can go ahead. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a handset while asking a question. A gentle reminder to all participants, that you may limit your questions to two per participant, as there are several participants waiting for their turn. First question is from the line of Ankur Sharma from HDFC Life. Please go ahead. Yeah. Good afternoon, sir. Thanks so much for your time. Just two questions. One was on the order inflows. You know, now what we see for the first half, you know, we've done about seven odd, seven and a half thousand odd crores of inflows. Our guidance, I think, is INR 25,000 crore. So if you could just help us, which are the larger orders that you expect in the second half, which would kind of help you get to that target? Or are you seeing any slippages, you know, or otherwise, you know? So just some sense on the order inflows. And my second question will be on the working capital. So, you know, while profitability and top line growth has been very strong in the first half, you know, operating cash flows are actually negative INR 2,300-odd crores, with this very substantial rise in both debtors and inventory. So if you could just help us, what is driving that, and do we expect that to kind of normalize by the end of the year? Yeah, thanks. Good afternoon. As we have told that we have achieved an order book inflow of INR 7,500 crores in the first half of 2024-2025. Mm-hmm. We are confident of achieving the target, guidance given of INR 25,000 crores for 2024-2025. In that, the major orders which are expected are, one is for Ashwini Radar of around INR 2,500 crores, electronic warfare suite for Mi-17, that is INR 2,000 crores. Akash order is another INR 2,000 crores. Shakti phase IV is another INR 2,000 crores. So these are the major orders expected. Already we have achieved 7,500, and, with these orders and some other small orders, we hope to, we are confident of achieving the given guidance of INR 25,000 crores. Okay. As regards the working capital, the current ratio as on thirtieth September is 1.6, and working capital is fairly, reasonably okay. It has been around 1.5, 1.6, for the past few years. Mm. So we don't see any much challenges in the working capital management. Okay. No, because my question was because your operating cash flow is negative despite this, but you're saying we- Operating cash flow is negative because in the first half, the inventory is more taken up because in, for the second half of our turnover, further we have to achieve around 14.5% growth as per the target. Right. If you see our inventory, it is around INR 9,000 crores, yeah? Mm-hmm. First half, we achieved INR 8,500 crores. Given a guidance of 15% growth, we hope to achieve INR 23,000 crores turnover. It means we have to achieve 14.5% growth turnover in the second half. Mm-hmm. Mm-hmm. For which we have to build up inventory, for which cash outflow will be there. Mm-hmm. So that's why the operational cash flow is negative, and inventory is slightly built up for the second half. So that will recover. This will not be an issue. I get that. Okay, sir, great. Very helpful. Thank you. Thank you. Thank you. The next question is from the line of Priyesh from Mahindra Manulife Mutual Fund. Please go ahead. Good afternoon, sir. Thank you so much for the opportunity. Sir, two questions. First, if you could provide a break-up of execution for this quarter in terms of project or program-wise. Acquisitions, what we have received in September, or execution? Yeah, execution for this second quarter. Execution in the first half we can tell you. Major was, of course, LRSAM. LRSAM order which executed in the first half. There are five, six more major projects. One is called CBIC project we called it, for Delhi government, for Central Board of Indirect Taxes. That is around INR 300 crore we executed. IACCS, so many activities we are continuously doing, and this first half, we have almost some INR 300 crore worth of orders we executed for that project. Then EW system of Shakti, around INR 250 crore. Hamel systems, INR 235 crore. Then Manpack Ku-Band Terminal, around INR 200 crore. So these are the major project orders which we executed till September 2024. For the quantity quantum of LRSAM, sir? LRSAM, INR 1,600 crore roughly. INR 1,622 crore roughly. Okay. Okay. I just wanted to understand the underlying reason that for the gross margin expansion that we have seen in second quarter of FY 2025, you can provide the reason for the same, and also, would that be fair assumption that this could be a sustainable gross margin for FY 2025? See, we have given a gross margin guidance of 42% for the current year, 2024-2025. The current half, the gross margin, we achieved is 45%. So it is the composition of product mix which during the first half, which has given us this margin of 45%. Overall, during the current year, we expect to have the gross margin of 42% only, as we have given the guidance. Okay, sir. Thank you. Thank you so much. That's all from my side. Thank you. The next question is from the line of Mohit Pandey from Macquarie Capital. Please go ahead. Yeah, good afternoon, sir, and thanks for the opportunity. Sir, firstly, if you could highlight which are the major projects to be executed in the next two quarters, that would be very helpful. Yes. In the next two quarters, the main project again is LRSAM, so that is around INR 1,600+ crore we will execute orders for that. Then one another EW project is called INS Shakti. That also will around INR 800 crore-INR 900 crore rupee worth of orders we will execute in next half. One more EW project is Instrumented EW Range. That also is one more major project executed by our Hyderabad unit. Around INR 1,050 crore is there for that. Akash Army, we have already started good progress on that, and we will liquidate around INR 500 crore worth of items we'll deliver by March for Akash Army. D-29 EW system is now continuously we are supplying. In the next two halves, next two quarters, we'll around almost INR 500 crore worth of equipment we'll supply for the D-29 EW system. And then, weapon locating radar for Egypt, we will supply around INR 450 crore. These are the major items which we are going to supply in next two quarters. Okay, sir. And sir, secondly, on the supply chains, if you could give an update on Israel-linked supply chains, are you facing any challenges on that front? Yes and no. Actually, major challenges which we had seen earlier for LRSAM and other, those big-ticket items, already streamlined, so we are not facing any challenge. Some other small items which are not affecting our turnover that much, but it goes as a subsystem in larger system of other DPSUs, there, we are finding some challenges. So it may affect their turnover that much, but our turnover point of view, not impact is analyzed for items which are coming from Israel. All the items, streamlining has been done in last three to six months, so we are not facing any challenge as such. Sure, sir. Sir, just... And lastly, on margins, if you could highlight what are the two, three factors which lead to variation in margins across different products, that would be very helpful, sir. No, it is just the product mix of different products. See, there are 29 strategic business units which we have got, and all are executing different product lines. So it is all that combination factor has given us an advantage in this current half, sir. That is the only one. Individually, I cannot tell which product has given what, that we are not able to comment on. Okay, sir. Thank you, and wish you all the best. 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. So just on the order intake guidance, which you said, you know, you feel still very confident of doing INR 25,000 crore and you articulated few projects. Can you throw some light, especially on this Ashwini Radar and all? It's been now four, five quarters, you know, we've been hearing that this is something coming. I just want to understand, it is some structural issue has come into it, or it's just that the final price negotiation is somewhat delaying it? Also on the other projects where the confidence is so high that we will do INR 25,000 crore, are these more of in the final negotiation of pricing where they are stuck? Just wanted first thing on that. Okay. Definitely, once we have told you that, our target was INR 25,000 crore of order inflow this year, definitely we have done homework, and we are confident then only we announce that. Right. So it was there. Ashwini Radar, we have told, this radar already we have become L1. Already it is declared L1 also. Mm-hmm. So it might become a multi-bid. Actually, we were trying- Right ... this to become a single bid, but because of previous commitment given by DRDO, that it will be a single bid for BEL. Anyway, over a period of time, they told, let it go to multi-vendor situation, and we were confident that we will become L1. Because our association, our development, our knowledge, our strength, based on that, we can give to our users the most cost optimum solution. Then we were L1 already declared. Now declared L1, it will take another three months maximum to convert that L1 to getting the order. It will not be issue. Already, I think the three vendors participated in this, and we were L1 in that. This is about to come any time now. Okay, so previous delay was because of that confusion only, whether they will go multi-vendor or single vendor, or partial quantity single vendor to BEL, because BEL was associated from day one in the radar development program, jointly with the DRDO. So we were fighting for that, and it was their previous commitment also. Anyway, part of life that we have to have multi-vendor situation. Mm-hmm. And multi-vendor also, there is no threat for BEL. So in this particular case, we have proved that, we are cost competitive also, and we are getting order very soon now, because all other processes are done by the user. Regarding other three projects also, they are in a very, very advanced state. We are having multiple discussions going on. Even, some of them I have already started, PMC also, first round of PMC, et cetera, I started for that. So we are confident in next, three months, maximum four months, we will have this order. And as soon as order comes, we will firstly intimate to CBIC and then to you, immediately. Okay. Sir, the second question was, given, you know, and sorry for again asking you this, I always ask this, is that INR 25,000 crore kind of an order intake, you've been consistently maintaining the momentum in the last two, three years. But given next year, how you are looking at it? I mean, to grow at INR 25,000 crores, you think you can grow on that number? Still, do we have those programs, for example, MRSAM is still there, but generally in your sense, in a very practical way, do you think, growing on INR 25,000 crores is still possible? Because otherwise, then your growth, on the, basically your profit growth will start, you know, looking, quite weak. So just, you know, more of a question on a forward basis, that how are you looking beyond INR 25,000 crores, if you look at your pipeline and government agencies ordering new orders? Hmm. Everything is promising for us right now, let me again assure you. We are targeting next year it will be more than this year growth guidance, what we have given you. Next year, April, we will again consolidate all of that. I can only assure you today, it will be more than what is there for this year. This year we have called revenue growth 15%. Next year, I can assure you now itself, it will be more. Because of the so many leads and so many discussions we are already having on so many programs, including we have called QRSAM, including MRSAM for L1 order. So these all orders are going to justify mostly next year. Next year, order book position, if you say, only QRSAM alone itself may give us, INR 25,000 crore-INR 30,000 crore order book, one line item itself. Then remaining line items will give us something more. We are confident next year will be definitely much more than, what target we had set ourselves for this year. It will be much more, I can assure you, but that we will tell you from data on first April, definitely will come up, come to you with much more, better figures for next year. But we are fully confident on that. Sir, in terms of margin, you know, you stated, you generally being, you know, saying that gross margin I will maintain it for about 42%. But given your plans are strong margin, I understand mix always is important, which you better understand than us. But generally in your sense, do you think there is a high chance of, you know, you doing better margins just because of the mix part, nothing else? I mean, operational leverage would be there, but I'm saying just because of the mix where it is getting concluded, because you stated one number of one project, which is like INR 1600 crores over the next one or two quarters. So that could be coming because of that margin mix is somewhat. Do you think margins can hold up further? You are only asking in no different version of the same question? You say, so we maintain the gross margin of 42% for the current year. Okay. All right. We will definitely maintain that. We are in the process of doing further and further indigenization of our modules, subsystems, et cetera. So hoping that if the indigenization is done well in time, definitely it will be profit margins will increase, but today we can't quantify about the future. But today, we are confident about what our margins which we have given to you, we are definitely going to cross that. We will achieve this, no doubt on that. Thank you so much, sir, for all the time, for always answering the questions. Thank you so much, and all the best. Yeah, thank you. Thank you. The next question is from the line of Mayank Chaturvedi from HSBC Mutual Fund. Please go ahead. Yeah. Hi, good afternoon, sir. Thank you for the opportunity. So you highlighted that you now are working across 29 SBUs. I think a year or so back, it was around 24 SBUs. Can you just highlight which SBUs you have added over the past one year, and what do you think is the total addressable market for these SBUs? Okay. So, first of January, we had opened five more SBUs, and that one of them was EW Land Systems at our Hyderabad. So that was the biggest SBU, because for that we were doing so much of homework, so they are now started generating. This year, I think they will cross around INR 1,500 crore plus turnover this year itself, because last year they were working jointly with another naval system SBU of EW. So they already were doing good work. We had to only streamline them and separate them, and become a separate SBU. So that SBU, already in the first year of existence, so called itself, will cross INR 1,500 crore. Other four SBUs are created at Bangalore for us. That also started as a micro SBU type of concept within BEL, and some homework they have already done. One of them is RF and IR SBU. Another one is Arms and Ammunition SBU, one of them is Network and Cybersecurity SBU, and one of them is Unmanned Systems SBU. So these four SBUs also have good growth prospects, et cetera. We have reviewed that. RF SBU this year may touch around INR 350-INR 400 crores turnover, and other SBUs also will be of this similar line. So first year for these four SBUs, we have given a target, internal target of around INR 200 crores, INR 250 crores-INR 300 crores, barring this sixth SBU, which will definitely cross INR 1,500 crores. And then, slowly they will pick up. Finally, we want all the five SBUs to become thousand-crore SBU because they have those type of potential. In next two to three years, they will start contributing INR 1,000+ crore. That we have already our own plans for these SBUs. Okay. And so on this cybersecurity SBUs, I think the services were largely being consumed internally. Have you started offering these services to third party now that you're targeting INR 200 crores-INR 300 crores revenue from? Certainly. Certainly, certainly. Okay. Because earlier they were, their services were used for our bigger programs of our bank itself. Mm-hmm. Which anyway we were supplying directly to the bank, but there were no direct orders for them. So now, anyway, they will keep on supporting that internal usage. Mm-hmm. We have our own internal booking standards for that. If they give services to our internal SBU also, we account for that. Definitely now we are looking at direct turnover for them, direct sales to be done. That, there are four, five big leads already, which have converted into a business case for them. We are expecting one or two big orders in next 10-15 days or maximum one month time. One from- Mm-hmm. Minister of Defense, one is from medical, AIIMS and other executive departments, and some other are from FOC related activities for some DPSUs. So some four, five big leads are there, which they are going to get and then execute also. Some 10, 15 crore type of orders they have already got, and they are started executing that. But these big-ticket items we are expecting now, and that's why we are confident by March, direct sales, they may cross INR 200 crores-INR 250 crores. But definitely they are- Mm-hmm. Supporting other SBUs and generating indirectly revenue for them for around two hundred crore worth services they started giving to other SBUs. Seeing the potential only, this formed a separate strategic business units. There is a great potential in this area. There'll be a slow beginning, and as the time goes, they will slowly take off. Okay, sir. Great. Great. Thank you for answering my questions. Thank you. Thank you. Participants, please restrict yourself to two per participant, as there are several participants waiting for their turn. 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, India's naval pipeline is quite comprehensive in terms of additions of next-generation destroyers, frigates, as well as there has been a substantial movement on the submarine programs as well recently. So could you highlight how we are going to increase our wallet share in these platforms vis-a-vis how we were doing in the past? So basically, what are our newly indigenized products and systems that we can now offer in these platforms, which we were not doing earlier? Definitely, one is numbers. When number increases, turnover increases, and one is extra share in these platforms. So extra indigenization or extra products to be added in these platforms. So we are working on both fronts. Adding numbers, upgrading previous products, because some of the products which we have supplied, now we are giving slightly upgraded features. So that is not called as a new addition, but upgradation also has a huge turnover advantage for us, because upgradation comes at some cost. So there are incremental product upgradation, subsystems upgradation. And third is adding some new portfolio of electronic variety subsystems. So we are working on all the three. New variety work, share also, we have now discussed, especially on submarine programs, et cetera. And that itself will give us very good return or very good turnover for us. So all the three fronts we are working on with naval platforms. So many new type of radars which were earlier imported, and now we are indigenized, and we are giving, like with MFR radar order, which we received in last quarter. That is one such example, which was for older ships. It was a foreign port radar, and now we have indigenized, and that's why now it is directly supplied by BEL. Earlier it was directly by global radar. So that way we are increasing some other gun interfaces and other things we have added. Some other, integrated sonar suite type of things we are adding for submarine programs. So we are keep on increasing the indigenization content in these programs and keep on upgrading various, products which we had supplied earlier, like EW or communication suites, et cetera, we are upgrading. So all the fronts, we are finding in our naval pipeline, projects itself are growing, and our share, our electronic share is further increasing because of indigenization efforts which we have put at right time. So because of that, naval segment is the most promising out of the three, army, navy, and air force for us as of now. But definitely, other two also, navy and air force, army and air force also are catching up now, because there also we have done lot many indigenization programs and so many big programs. But definitely, naval has taken the lead as of now for us. Understood. Sure. So my second question is, could you comment on our content in the artillery systems being developed by the private players? So there are many programs happening simultaneously, ATAGS, Towed Gun Systems, Vajra, Mounted Gun Systems, as well as Light Tanks. So what is the total addressable opportunity for us in these programs? I am asking because a lot of OEMs which are developing these programs, they also have their own electronics division. So would we be competing with their own divisions? How our market share, wallet share, will pan out in these systems? Okay. Like, these all platforms, firstly, for us, each and every platform is important, whether it is a naval platform or whether it is a tanks and guns type of platform, because everywhere there is a presence of electronics and there is a presence of BEL. So in these programs, although many of the programs are now, which type of platforms are opened up to private, but basic electronics for that, based on our experience, based on our products, and based on our compatibility with the previously supplied system, or based on our expertise of integrating them to a larger C4I system. The, because of all these things, we are confident that they are coming to us for all these type of interfaces. Like we call it, TIU is one such example. The communication interface unit for all these tanks and guns is provided by us. Typically, all types of EO systems are provided by us. So those are the tank radios, radio communication with them, that is provided by us. And because, when they approach us, they know we will give them a quality product, and which is interoperable to present solution and future solution. Because largely all complex system-oriented solutions, like C3I programs, are handled by BEL, so that gives us an extra advantage, and that's why even these private companies also want to work with us very, very closely. Anyway, we are not facing any problem. We are working very, very closely with Bharat Forge, or Tata, or L&T and all these big players, private players also, to see that we give them right products and technologies required for them in these programs. Thank you. The next question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Yeah. Hi, good afternoon, everyone, and, congratulations on a good set of numbers. The first question is on the EBITDA margin, which seems to be very high in this quarter. Now, I just wanted to understand whether it is due to the nature of contracts or nature of orders that were executed, or whether certain provisions have been rolled back. So just wanted to get a little bit more clarity on that. It is on the nature of orders executed. So there are no provisions that have been rolled back? No, provisions we run are not minimal only. It's more on the nature of contracts. That's why the gross margin is 45%. That is why the EBITDA margin has gone up to 27%. Okay, fair enough. The second one is, if you can just throw some more light on QRSAM, specifically where we are, when we expect the ordering. I mean, what is the where are we stuck? What is the major- Are there some tests pending or something? And also, whether we are also participating in this Virupaksha? Virupaksha. Virupaksha, which one Virupaksha? Can you explain a little bit more? That's Sukhoi, Sukhoi- 30. Acha! Acha, oh, that one. Sukhoi- 30 radar. Okay. That is a radar program of Su-30. Because Su-30 has so many upgrade program, and two or three programs we are taking lead also. We are having constant discussion with our defense users, IAF, for that. So we are anyway engaging with them for EW right now. And for this radar program, we and HAL both are participating, and we will see how. But it will take some more time to finalize the configuration, optimum configuration, et cetera, for this. Because right now we have just, they have just chosen, the DRDO has just chosen the LCA configuration. So from that Su-30 configuration, there are a lot of technical challenges, et cetera. We are just watching that and technically associated with them for that. So regarding QRSAM, last time also we told, quite a good amount of advancements are happened now in last three months also. We are moving in the right direction. Some clarification, configuration changes, etc., some MRSAM, those type of nitty-gritty of the contract or scope of work only is finalized. And once everything is totally frozen, it will go to ministry for competent authority approval. Hopefully, next year, first quarter, we are expecting RFP, maybe should work. Okay, got it, sir. Thank you so much. Thank you. The next question is from the line of Ishan Shrimali from Tara Capital Partners. Please go ahead. Am I audible, sir? Yeah. Yeah. I have a couple of questions. The first would be, what would be the EBITDA margin, like, outlook or guidance for FY 2025? And the second thing is, in the last con call you had asked, you had said that, you know, CapEx for 2024-2025 is projected around INR 800 crore, with some facilities in Hyderabad and Andhra and Nagpur. So could you elaborate on the anticipated production capabilities of these facilities and how they align with the future order book pipeline? The EBITDA margin, as we have told, is we maintain at 23%-25%, what guidance we have already given for the current financial year. Okay, for the current financial year. For the current financial year. As far as the CapEx is concerned, we are in the range of around INR 800 crores is what we are targeting in the current year. What growth projections we are giving to you is all based on the different capabilities which are also coming. Okay. I think the line is connected, disconnected, sir. Hello, can you hear me? Hello? Hello. Just a second. Please wait. Yeah, I think disconnected. Yeah. Ladies and gentlemen, the management line has been reconnected with us. Thank you for patiently holding. Yes, sir, please go ahead. So, CapEx question. We are asking about the CapEx. No, I first asked about the EBITDA margin guidance for the- EBITDA margin, EBITDA margin, we maintain the guidance of 23%-25%, what we have done for the financial year 2024-2025, okay? Yes. As far as CapEx is concerned, yes, we are expecting a total CapEx of INR 800 crore in the current financial year. This CapEx, what you are telling, these additional factories what are coming up, it will take maybe next year, next to next year to rectify, become operational. It may be next year, and some may be next to next year also. So these are part of work in progress in some of the cases. So whatever growth we are forecasting for the current year and next, maybe especially in the next year, is based on the additional capabilities also, which we are building up, because as the base goes up, the percentage also goes up, and then the growth overall actually more. For this only, the additional factories, additional CapEx is being done. Yeah, that's it from my side. Thank you so much. Thanks. Thank you. The next question is from the line of Lavina from Jefferies. Please go ahead. So congrats on a great set of numbers. I just wanted to check, non-defense side, any updates you'd like to give? In the defense side, very clear. Non-defense. Non-defense side, yes, we are having an order book position. I don't know exact order book, but around 10% of our order book is typically non-defense. Right now, we have around INR 8,475 crore as our non-defense order book. We are getting very good leads now, for like we got last year, CBIC and UP 112 as a project. This year also, we are finding a lot of interest in that, our D4 System for BSS. We are going to get order very soon. We have declared already L1 for that also. One more security related project we have recently got order. So we are getting every month around INR 500 crore-INR 500+ crore rupee worth of orders in the non-defense segment also, so we will have a logical mix of around 85-15%, which we typically want to maintain between defense and non-defense. So we are in that range only right now also, and plans are there separately, because we review our non-defense market leads, execution, etc., separately, and we found there are no problems for maintaining this ratio of 80 by 15%. Lastly, thank you for that. Lastly, sir, I know a couple of people have asked as well, but just want to understand, there is a concern that defense in general might be slowing down. There could be some derailment in future orders. I know at this point in time, the outlook looks very healthy, but do you think any challenge you foresee over twelve months or two years or three years that could derail the story in general, from a very macro perspective? In defense or non-defense? In defense, in defense. Defense. So, you know, for next five years, we are bubbling with the leads and order books and other things. We are not having any issue for next five years. When we all sat together internally and then seen what are the main, main leads which we are having, or main, main acquisition plans of our defense forces, army, navy, air force, we are confident, minimum 15% growth, so guaranteed for us in next five years. We have made already for next five years our internal plan, which at appropriate point of time, we may share with you also. But definitely for next five years, our visibility is very good for maintaining minimum 15% growth. We wanted to target for 17.5%, but right now minimum 15% guarantee visibility is ensured for next five years for defense electronics for us. And as far as the macroeconomic, what you are telling, macro budget is concerned, as you could see from the budget which is presented every year, the defense budget is always on an increasing trend only in general. Maybe sometimes the increases could be a little bit here and there, but overall it is on an increasing trend only, even the country's defense budget also. Understood, sir. Thanks a lot. All the best. Yes. Thank you. The next question is from the line of Amit Mahawar from UBS. Please go ahead. Yeah. So I have two quick questions. First is, so broadly in FY 2025, assuming INR 250 billion-INR 260 billion worth of orders, we, the advance that we'll have is around INR 2,500 crore, plus or minus, or there is a change, sir? Since what, what was it? INR 25,000 crores of orders end? I'm saying the advance that we get on orders. I was just trying to understand if, you know, anything has changed on the contract side from the- No, in general, the contractual terms more or less remains the same. It is, of course, depending on contract by contract, but more or less they are on the same pattern. Same. Okay, fair. The second question is more medium term. You shared about status on QRSAM and some large orders. Across 2025, because QRSAM is a very long project and it is coming in stages. So, apart from QRSAM and MRSAM and Akash NG, et cetera, I just want to understand, you know, how should we year-wise look at the large order configuration for BEL in 20 25, 2026 and 2027? The reason I ask this question is, if you're growing the turnover by 15%, you know, in 2025 and 2026, your revenue billing is going to be more than INR 500 billion. So I just want to understand if 2026-2027 is going to be a very, very high intake year for you. Thank you. There is always. We are always talking of larger programs like QRSAM and some other programs, but there's always a base order which always is there, which is INR 15,000 crores-INR 20,000 crores, which constitutes for whatever supplies you have already made. There are upgrades, there are spare supplies, there are maintenance which are being done. So that base order is always there. What we talk always of is the incremental program, like sometimes we talk Ashwini Radar, QRSAM, MRSAM. These are the further programs which we talk. So base order of minimum of INR 15,000 crores is always there, based on the old upgrades as well as sales, as well as maintenance services, for which equipments have already been supplied. In addition, these programs also build upon that. So as it is, as we say last, this year also, the base Order Book of INR 15,000 crore-INR 20,000 crore is there. We already talk of QRSAM is over and above that. QRSAM is a special thing, so we are adding as one off for next year. So similar programs will keep coming as we have, because so many R&D spend is also going on in the company. So there are many programs of the Ministry of Defense which are going on. So as the, I mean, what to say, as the program fructifies in the future, we see more and more, good, in size orders coming in. Very helpful, sir. Thank you very much, and good luck. Thank you. Thank you. The next question is from the line of Harshit Jitendra Kaparia from Elara Capital. Please go ahead. Yeah. Thank you for the question and congratulations for good set of results. Just two questions from my side. Starting on the order book of INR 75,000 crores, could you give us a tentative breakup regarding how much of the order book is still there for LRSAM, MRSAM, the electronic warfare system, IACCS, which you generally give, and some any other large project which is there in the pipe? The LRSAM order book as on first October is around INR 4,200 crores, pending order of INR 74,500 crores, what we told. LRSAM is INR 4,200 crores, IACCS is INR 2,000 crores, Akash Prime is INR 3,500 crores, LCA Avionics is INR 1,600 crores, D-29 EWS is INR 1,300 crores, Akashteer ADC&RS is INR 1,500 crores, MAWS is INR 1,000 crores, and all others are below INR 1,000 crores. These are the major ones. INR 4,000 crores of LRSAM, INR 2,000 crores of IACCS, Akash Prime INR 3,500 crores, LCA Avionics INR 1,600 crores, D-29 EWS INR 1,400 crores, Akash teer INR 1,500 crores, and the Mi-17 upgrade, INR 1,000 crores. These are the major orders out of the INR 75,000 crores order book, what we told on first October. Okay. And the LRSAM and MRSAM execution would be completed by FY 2026? Would that be a correct understanding, or would it be may go even to FY 2027? Yeah, as of now, I think 26 only, but, some spares and other small quantities only may spill over to next year. Major, major will be over in next year. Okay. And just continuing on the previous question on the order inflow part, if you can also highlight, apart from the QRSAM, which you expect of, let's say the first batch of INR 12,000 crore-INR 14,000 crore, any other large program that you envisage for FY 2026, when you gave a guidance of INR 37,000 crores-INR 38,000 crores, in terms of order? See, as we are telling, there is a base order which we are expecting- Yeah. Of INR 50,000 crores, which comes up from the old programs. This QRSAM is a one-time high-value order, which we are talking of for the coming year, next year, which we are telling it may come. There are many other programs which are coming up on which our R&D is going on. We are working on those programs. It would not be fair on my part to name all the programs at this juncture. Please understand, it's an open forum, so we cannot name all the programs what we are, what the company is working on. Sure, sir. Okay, I wish you all the best. Thank you. Thank you. Okay, thank you. Thank you. The next question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead. Sir, thank you for the opportunity. Just wanted to understand, defense, non-defense mix for 2Q as well as 1HF for 2027. As such, overall, we told now, overall it is 85-15. 85%-89% is typically defense, and 10%-15% is typically non-defense. And quarter to quarter, although we don't minutely check that, but the ratio will be of similar order only in each quarter. If you are very precisely interested in the first half of 2024-2025, it is 87% defense, 10% non-defense, 3% exports. Sure. Sir, then maybe just sort of a split on, how much is indigenized versus how much is foreign collaboration? The total overall in this typically around 85%-88% of the products which we supply are either in-house or by other indigenous sources like the DRDO and any other Indian company. And typically, ToT component is of the order of 10%-15% only. So in general, we maintain that as a logical mix because some ToT products also are required for growth, turnover, and urgent requirements of the user. But over a period of time, those are also we are in the process of indigenization. So typical r-ratio of around 80%-85% of total in-house or other indigenous sources of the DRDO, et cetera, the technology we are delivering. So that ratio we are more or less monitoring and maintaining. Sure, sir. Maybe just want to sort of understand our sort of ability to, you know, continuously sort of report EBITDA margins substantially higher than what is sort of the margins for a typical nominated contract. So how does it affect your, you know, future negotiations and upgrades? Or is it like every product is sort of looked at a new product, so even if you are sort of reporting substantially higher than nominated ranges, you can still continue to enjoy that because of, you know, our own sort of cost efficiency measures? The thing is, overall, how we earn the profit, is not based on only margins. It is based on overall indigenization efforts which we put. We give the most optimum solution to our defense forces, the most economical way of solving a problem. So there are various ways, and overall, again, different type of product mix are there, which gives us some slightly better margins, some slightly less margins. So overall, margins are good because we have put lot of efforts on R&D in there, in-house as well as supporting industry also. So this indigenization efforts or these in-house R&D efforts only gives us more and more margins in long term. Sure, sir. Those were my questions, and best of luck for future quarters. Okay, thank you. Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead. Yeah, good afternoon, sir. I hope I'm audible. Yeah. Yeah. Sir, in last quarter, you indicated that, you know, you will also be doing work related to Kavach, which is the anti-collision, train anti-collision systems. I think some large orders were to be placed in October, November for that. Any news flow regarding that? Has BEL participated there? No, in the Kavach program, we told our intention now that we have to enter into this Kavach development. This development is an involved process. So right now, Railway has given us one execution, a small execution order to prove our capability. And that order, they have told around eighteen months time to prove that on a small section. So we are in the process of development of this Kavach ourselves, and we have to install it in that small execution place. And once we qualify, then only we will be given bulk production clearance. So right now we are in the process of developing and fielding the prototype, and then only this bulk production activities will start. So at least we have got this order from Railway for development right now. So we are in that phase, because that way only Railway works. First, they give a small execution order based on the capability shown by us. So we have proved our capability. After witnessing that capability, they have given us a small execution order to execute, and the detailed evaluation will be done on that order, that particular execution order, where we will really install it also. And there only the efficacy of our system will be verified by Railways. And once that is done, then only we will migrate to participate in bulk production related orders. So recently, they have RFP, they have issued. There, we cannot participate because we have not crossed that particular milestone. So once we cross that milestone, the next order, when it comes bigger order, definitely we'll participate, but this present order, we cannot participate because we are still in that, prototype verification phase for the Kavach. Okay, sir. As a second question on, I mean, around manpower and talent, one, wanted to understand the attrition rate in the company. And two, I think there were some news, some media articles that, you know, you had given offers to regular trainees in IIT Mandi, but finally none of them joined. Is there therefore a challenge in terms of getting quality manpower, so attrition and hiring are the two aspects I wanted to understand. Firstly, luckily, we are not having attrition problems to the extent what this IT sector and other electronic sector persons are facing, because of overall environment, which we give to our manpower, the overall growth and learning opportunities which we give to our manpower. So our attrition rate is typically 2%-3%. Only during, of course, COVID, there was a small surge. That time, I think we might have touched around 5%, but otherwise, we are generally 2%-3% only is our attrition rate, which is manageable. What I was referring in IIT Madras and other places also is now we are growing. So for our future growth and where we have to do lot more of indigenization, lot of more of Make in India and Design in India type of initiative, that requires much more manpower to be put in R&D for us to meet the Government of India timelines and guidelines. So one is doing more and more of indigenization. Second is for our own growth, for 15%+ growth, we have to diversify, we have to add so many new products in our portfolio, so that requires more and more of manpower. To attract that manpower, we are going to all IITs, NITs, and so many other places, and we are coming up with better and better reward and recognition schemes. That is a continuous process in BEL. So more and more of those schemes which we are going to give, that will... We are confident that with that, we can attract the talent and increase our manpower considerably, especially in R&D. Okay. Sir, what could the hiring program look like, sir? Number of trainees or, I mean, at a later level, hiring absolute terms, what, what is your target annually? No, this year, in next 12 months, we have set our own target, that in next 12 months, we should have permanent manpower, minimum 1,000+, we are going to add. That we have already got from our board approval also. So that is for permanent manpower. And I can tell you if permanent manpower itself, we are going to have 1,000+ more, all other contract manpower, like trainee engineer, research, project engineers, etcetera, minimum this much number always will be there. So around 1,000+ additional of other variety manpower, we will have 1,000+ permanent manpower, which we are committing for next 12 months. We have come out with a plan, internal plan for that, and we are confident we will exceed our that internal target of manpower hiring also. Okay, final question from my side. Could you please fall back in the question queue for your final question? Thank you. The next question is from the line of Rupesh Tatiya from Intelsense Capital. Please go ahead. Hello, sir, thank you for the opportunity, and thank you for the good set of numbers. My question is around AESA radar, sir, Uttam AESA radar for LCA program. So can you give some update on that? Where, where is that, and when are we expected for large order for that? The Uttam radar, actually, radar as an integration will be done by HAL, because the first radar, you know, there are a lot of challenges when first time any radar has to be integrated in an airborne platform. So LRDE and took a calculated task on hand, and based on that, they decided, let HAL only take the lead for this integration. So as the Uttam radar per se, will be integrated by HAL only as of now, for the first few radar. However, most important component of that is TR module and the AA A, we call it. So these modules, definitely, there is a role of BEL to play, and BEL is working backward for giving that type of a quality solution to HAL. So it will take some more time for HAL to come out with the order for placing on us. Right now, the radar is going on under integration trials in the stages, and it will take some more time to fully qualify. You may be knowing airborne systems, qualification is a very, very involved process. So that process and overall integration of radar. So as such, Uttam radar will be integrated, optics managed by HAL, although the basic components will come from industry, and in that industry, BEL is taking definitely good leads. So just one follow-up to that. So, I mean, let's say planes, LCA planes, that will need to be produced in 2026, the order for that will come in, you know, how much advance? Will it come six months in advance? Will it come in 12 months in advance? How does that ordering cycle work? Actually, that question you should ask from HAL, because it is a- Sorry to interrupt. The management line has been disconnected. Please wait while we reconnect them back. Thank you. Okay. Ladies and gentlemen, thank you for patiently waiting. The management has been reconnected back with us. Yes, sir, please go ahead. Sorry, again, there was some technical glitch in between. Again, power factor. I hope now I'm being heard properly? Yeah, sir, I understood. So for other question, is this Shakti EW system, I think another private player, I think, was declared L1. So was there L1, L2 in that? And did we become L2, and did we get some order, or the entire order went to the private player? Which Shakti you are referring? Because one Shakti is EW Shakti. One Shakti is we have our military communication related Shakti program. You are referring to- No, EW, EW, sir. Electronic warfare. No, no, no. EW Shakti is always with BEL. It is a buyer-nominated equipment, and it has, because overall, the total solution is developed jointly by DRDO and BEL. And I don't think any time it has gone into multi-vendor situation. The Shakti EW was always with BEL, and it is with BEL only. I think the private player, Adani, I think, wrote in its annual report that they have been declared L1 for Shakti electronic warfare system. I just wanted a clarification with respect to that. No, no, no. That may be some other context Shakti maybe they are telling. But this Shakti, Nayan, Shakti and other EW program of naval ships, we are the buyer-nominated equipment. This our equipment only and- No, I don't... Sir, I think this is airborne then. I think this is airborne EW. Airborne EW is different name. That is AEW&C over now. In AEW&C, we also participated for the new tender, where I think there Adani became L1. But that is a system integration project. There is no development there, system integration are based on the CABS design. So that project we lost to Adani, yes, because we wanted to enter into this segment. We have never entered. We are only doing life cycle management of AEW&C, EW system, but we were not a system integrator till date, so we wanted to enter into that. Unfortunately, in this program, I think they quoted they became L1. Although they have not understood the total project nuances or project subsystems, which we understood very well, because I think for last seven years, some three of their aircraft are maintained by BEL only. But anyway, they became L1. Let them prove that they can supply in that prices what they have quoted. Best wishes to them. And anyway, it's part of life. We, when we quote, we may become L1, we may not become L1. But this is not a development program, it is an integration program, and mainly it is a CABS-driven program. So that program, you are right. But we have our own Shakti for Navy Shakti, where we are L1. Hope I clarified to you. Thank you. The next question is from the line of Aditya Jaiswal from Nirmal Bang Institutional Equities. Please go ahead. Thank you for the opportunity, sir. In the terms of export, like, what major orders, like, that BEL currently have, and the contribution of exports, like, currently it's 3%. So in the future, this trend line, will be more than 3% or what? Definitely, it has to be more than 3%. 3% is not a healthy sign, but, you know, export, we started with very, very small order books and small orders, et cetera, and to that, to reach 3% itself was challenge. But from 3%, our target is to cross 5% as earliest, maybe next year, and if not next year, next, next year, we will definitely cross 5%. We have, overall, order book of around $403 million as on today, and with various big, big orders are there in that. We are confident, whatsoever target which we have set for this year, we are crossing that. And next year, it could be more than 3%, I can assure you now itself. It will be more than 3%. Every year by year, we have to increase, and finally, the government really wants us to reach double digits. So we finally have to reach 10% of our turnover and export. But right now, jumping to 10% immediately is not possible, because it requires continuous effort, systematic efforts, et cetera. So we are, every year by year, we will increase our percentage of turnover from export. Right now, I can't tell you when we will reach 10%, but our goal is 10%, and it will be a growth path only. Every year, we will increase on whatsoever we have achieved last year. These two are our guiding principle. Exact value, that we will communicate to you maybe next year beginning. Sir, can you name a few projects that are in the pipeline for the exports? Major projects in the pipeline, that is, actually around $500+ million leads are there with us right now. One or two major things actually are there for RWR, MWR, spares and training for the same. But what, I think today, the C-295 inauguration is there. For that, some expected order is planned. CoMPASS related orders and gimbal-related orders from Elbit Systems for exporting to their, to them, so that they can supply to some other countries. Some Asian countries related, some orders are there, big orders. Something related to Brazil, something related to weapon locating radar in Egypt. So those type of big leads are there, around $500 million plus leads we are working right now. And we are confident we can liquidate as many as possible of them, in next one year. This year, anyway, we are going to, we are targeting around $200+ million acquisition. So that, we are confident we will have that much acquisition extra in this year. And overall, order book is healthy from export point of view, the way we are planning, the way our growth is there. So we are confident about that. Thank you, sir. That is from my side. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to the management for their closing comments. Yeah. The future outlook, as we told, we started, whatsoever data, we are committed to achieve that. That only shows the overall confidence from BEL management to the investors, that what we started the year, we are continuing on that goal, and we are confident that we are going to achieve that goal of overall revenue growth of 15%, EBITDA margins of 22%-25%, order inflow minimum INR 25,000 crore, we are crossing - we will cross. R&D investment, we have increased INR 1,300+ crore. We are going to have that figure. CapEx, INR 700+ crore, and defense, non-defense business of around 85-15%. So these are all guidance what we have given. We are committed to achieve that for this financial year, 2024-2025. Thank you. On behalf of Nomura, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you. Okay. Thank you. Thank you.