Ladies and gentlemen, good day and welcome to the Bharat Electronics Q1 FY2026 earnings conference call hosted by Elara Securities Private Limited. As a reminder, all participant lines 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 assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Harshit Kapadia from Elara Securities Private Limited. Thank you, and over to you. Thank you, Vishaka. Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY2026 conference call of Bharat Electronics Ltd. I take this opportunity to welcome the management of Bharat Electronics, represented by Shri Manoj Jain, Chairman and Managing Director; Shri Damodar Bhattad S, Director of Finance and CFO; and Mr. Shri Nivas S, Company Secretary, along with their team. We will begin the call with a brief overview by the management, followed by a Q&A session. I'll now hand over the call to Manoj sir for his opening remarks. Over to you, sir. Thank you. Good afternoon, everybody. These are the financial highlights for Q1 for the year 2025-2026. Revenue from operations, it has increased to INR 4,417 crore up to Q1, as compared to INR 4,199 crore last year figures, with a growth of 5.19%. Profit before tax, it has increased to INR 1,289 crore up to Q1, as compared to INR 1,037 crore previous year Q1, with a growth of 24.28%. The profit after tax, that also has increased to INR 969 crore in Q1, as compared to INR 776 crore previous year Q1, with a growth of 24.87%. The EBITDA also has increased to 29.86% up to Q1, as compared to 22.82% last year. Earnings per share has increased to INR 1.33, as compared to INR 1.06. Order book position as on 01/07/2025 is INR 74,859 crore. Of course, after that, I think almost around INR 2,600 crore more we have received order after 1st July. You may be knowing through our different disclosures from time to time, including one disclosure happened today also of around INR 500+ crore. This is brief about the financial highlight of Q1 for Bharat Electronics. Hello? Hello. Here. Yes, madam, you can take on now questions. Okay. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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 asking the question queue assembly. The first question is from the line of Umesh Raut from Nomura. Please go ahead. Hi sir, good afternoon, and thank you so much for this opportunity. My first question is pertaining to our margin performance for the quarter. We have seen a very sharp increase in our margins on a year-on-year basis. Could you please share some insights behind these improvements? What was on the account of material saving, localization, and regionalization, and how much was on the account of product mix? Okay. Overall margins, that is. Last year itself we had almost 27%. It is slightly better than that, which should be a good sign only, I should say. That is there. Although last year, first quarter it was less, I agree. Overall at the year end, we had almost 27%+ was there, and this year guidance itself was 27%. We are trying to adhere to the guidance what is given to you. That is the first thing which I want to tell. DF sir, you want to tell something more? As regards to gross margins, gross margins were better in the first quarter since the composition of product mix was more in-house manufacturing was there. It was gross margins were better in the first quarter. As you rightly said, it is due to composition of product mix. Got it, sir. My second question is pertaining to last ticket ordering opportunities. Could you please update us, timelines for these following programs? Update on QRSAM program, where exactly now you are seeing this program kind of getting finalized in terms of order signing? Second, with respect to MFSTAR program, is it kind of now getting finalized through shipyards? Third, basically on the Project Kusha, which is kind of in the final stage of development now. Okay. QRSAM, which was told last time also, we have progressed a lot now. You may be knowing DFC Approved one. Sorry, interrupt you, sir. Hello. Actually, there is an echoing sound from your line. Can you please check it? Also, some disturbance from the background. Madam, we are also noticing that. Here it is clear, but when we were speaking, we were seeing background noise or echo was coming from other side, I believe. Just a second. Mr. Umesh, can you please check if there is anything around your side on the speakerphone? I'm on mute now. I think now it is better. Yeah, yeah. Because when madam and we were speaking, voice was clear from both sides. Okay, okay. Sure. Shall we go ahead, madam? Yes, yes. Thank you. QRSAM, as you may be knowing, the DFC Approval was given on 3rd July, 2025. Good progress has happened on that front. Now only the RFP has to be issued to us, which internally there are some processes for that. We are constantly following up that. We are confident to get this order by February, March, as of now also. It may not slip to Q1 of next year. We are confident we may get in the Q4 of this year itself, QRSAM, because the progress looks really good for us, and DFC Approval already has come. Regarding MFSTAR and other subsystems, this was also told last time that our shipbuilders, they already got the order. We have already started discussing with them about the configuration, final specs about the final bomb. Those activities are going on at a good speed. We are hoping in the next three to six months we will get a considerable portion of subsystems order with us. That means good progress is there, but this is having some five, six different types of subsystems. For each subsystem, configuration and other details, final details are being worked out. After that, we will have PLCs, CNCs, and then order placement by them. Hoping that also, Q3 and Q4, we are expecting a major portion of that. Some small thing will spill over to Q1 of next year also. Some small subsystems may go, but majority of the orders we are expecting Q3 and Q4. Q2, nothing may happen because still we are in that discussion and that mode only. PLC, CNC will take time. Typically Q3 and Q4, we are expecting majority of the portion for this. For the Kusha, you may be knowing we are still in the developmental phase jointly with the DRDO. DRDO, those development-related trials only are going on. Order conversion is, as last time also told, it will take minimum three to four years. Till that time, we are developing systems and testing jointly with the DRDO, the subsystems, and their performances. This is in brief about all the three systems. Got it, sir. Thank you so much. If I can squeeze one more. So if I got the. Sorry to interrupt you, Mr. Umesh. Actually, I will request you to rejoin the queue for follow-up questions. Okay, okay. Thank you. Thank you so much. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead. Yeah, hi. Good afternoon, everyone, and thanks for the opportunity. There are a couple of questions from my side. The first one is on Virup aksha. Now, there has been a facility by the company indicating that they have received orders for exciter units and certain other components for Virup aksha. Just wanted to understand, have we also received the order or in which phase we are? That is my first question. No, this Virup aksha radar is for mainly 230. There are various subsystems in that. We have got one order, developmental order from DRDO for that. That order, we are in the stage of execution. These are called development orders. After development order and what you are referring also, that company also has got developmental order for some subsystems, we call it. They have got some order, but main order has not gone to them. Main order is with, I think, if I'm not wrong, it is BEL and Astra Microwave, if I'm not wrong, for the main systems. We are developing these prototypes. Once these prototypes are evaluated and tested, and I am confident we will qualify, then only the production phase-related or bulk orders will come. Right now, it is a prototype development jointly with DRDO for this Virup aksha radar. Great. Thanks for the clarification. The second question is essentially related to the emergency procurement. Now, in the last concall, of course, fresh from the skirmish, we expected that there could be around the media articles indicated INR 40 - 50 thousand crore of emergency procurement. Things appear to have cooled down a bit on that front. What are you hearing? Some of these orders that we have got in the recent quarter, do they also pertain to emergency procurement, or emergency procurement, if any, would be over and above this? Okay. The emergency procurement, overall, the activity started as last time told. We have received one or two orders already as part of emergency procurement. I think it was when we had given our public statement, there we have written also some of the items, like one triple LR radar we received and one more item, I think. We have started getting emergency procurement-related orders also. As it was told last time, I think September is the cutoff as of now for them. By next two months, we are expecting many more orders. Overall, all these orders, let me assure you, they will be part of our INR 27,000+ crore of order books, which we wanted to get in this total financial year. We have already received more than INR 10,000 crore. Remaining INR 17,000+ crore, definitely the EP will help us in crossing that target. Okay, sir. Great. Thank you so much and all the best. Thank you. Thank you. The next question is from the line of Amit Anwani from PL Capital. Please go ahead. Hi, sir. Thanks for the opportunity. First question on the. Any impact of supply chain since this quarter we did about 5% growth despite very strong order book? First thing, wanted to understand, anything which impacted the revenue because of the supply chain issue? Second, how are we dealing with the rare earth magnet ban which came from China? Any exposure there and how are we dealing with that situation? Okay. Yeah, your first point is correct that we only could register 5.19% growth. We were expecting around INR 200+ crore further execution of the order, but last minute because of geopolitical situation, especially in Israel-Iran conflict, that affected our minimum INR 200+ crore of the revenue. Because of that only, we thought we will be in double-digit growth, but because of this only, we fall short of that. Anyway, quarter two, we will compensate for this. I am confident about that. Regarding these rare earth magnets, it is not affecting us directly because this is mainly for EV and other segments. We are not right now in EV segment as a big player. We have only done some partial R&D in the EV segment for chargers and others. It is not affecting us at all. The rare earth magnet-related issue is not affecting BEL. It is mostly affecting the automobile sector and other companies. Sure. Sir, wanted to understand on the current order book plus once we get the. Please. You have told, madam has told too, you have already asked too. Please join the queue and we are available till 4 o'clock. Please. No worries. Thank you. Thank you so much. Thank you, management. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead. Hi, sir. Thank you very much for the opportunity. My first question is, could you share some timelines for the Shatrughat and Samaghat electronic warfare system orders? Also, how large these orders would be? Yeah. This Shatrughat and Samaghat order, good progress already has happened. We have received even RFP for one of the program because they are quite interrelated programs, Shatrughat and Samaghat. We have got one Samaghat program. Already, the RFP has been issued to us. We are in the process of responding to that. Generally, in the public, we only go after we receive the order. This intermediate stage, we generally do not tell. Anyway, to give you confidence that it has come to that stage, and following this, the next order will be for Shatrughat. RFP will be issued for Shatrughat. More or less similar configurations are there. One is for plain and desert, one is for mountain requirements type of thing. The total order, I think, for Shatrughat from Samaghat put together will be around INR 6,500+ crore. Okay. Understood, sir. My second question is on the next generation corvettes program. You have highlighted that we would get the subsystems-related orders worth INR 60 - 100 billion. Sir, what is the overall addressable electronics pie in this order out of which we are getting this INR 60 - 100 billion? I am just trying to understand what is the input content over here in this program. These all subsystems, barring MFSTAR, I think. MFSTAR, MRSAM only is having some 50-50% work share arrangement with our foreign partners. All other subsystems are totally home-grown. They are as such only dependencies of ICs or some other component-level thing which manufacturing capacities are not there in India. Otherwise, from indigenous content point of view, they are totally home-grown. MFSTAR, MRSAM, typically it is around 50-50% work share between us and foreign OEM, typically, roughly. That is the total NGC program. In the total program per se, I think around 60-70% minimum indigenous content will be there. It will be higher only. Exact value, I do not know, but roughly you can assume around 70% indigenous content for the NGC program for BEL. Understood, sir. Thank you very much for answering my questions and all the best. Thank you. Thank you. The next question is from the line of Atul Tiwari from JPMorgan. Please go ahead. Yeah. Thanks a lot. My question is a slightly medium term. Your revenues are now almost touching on an annual basis INR 300 billion. Except for some of these larger orders, your order inflows are about INR 270 billion. Even in this quarter, the order book was slatted to down slightly. Thinking forward three to four years out, can we sustain 15%+ revenue growth from this large base of revenue? Certainly, yes. 16% is not at all a challenge. We are actually internally aiming for 17.5%+. Thing. As it was told also last time also, so many projects are in pipeline where we have done good investment at the right time. Two programs are anyway, QRSAM and Kusha, which you know, which are definitely INR 30,000 - 40,000+ crore. In addition also, so many other missile programs, we are now DCPP partner for DRDO. Like one of the missiles which was tested yesterday, Pralay. It is BDL and BEL are the two DCPP. That way, so many other missile programs, we are now confident that our share will increase in this program. In addition to our main equipment of electronic variety in ships, submarines, or air force, radars, these are all programs we have a good pipeline we are envisaging for at least next three to four years for order inflow as well as for execution. The execution itself, as I stand right now, almost INR 80,000+ crore order book is already there with us today. Including QRSAM, around INR 40,000 - 50,000 crore, we are going to get orders now. I do not see 16% or 17% will be a challenge for me. Definitely, it will not go below 15%, that much I can assure you. It will be between 15%-17%, 17.5%, 18%, somewhere. We will try to stabilize around that type of a growth pattern based on the order inflow and type of projects where we are involved right now. Great, sir. And sir, last question is on margins. Margin performance has been very strong even in this quarter on a base of last year where the margins were all 28%+ at the middle level. Can we see further margin expansion also over the next two, three years beyond 28%? Presently, we have guided for a margin of 27% this year. We maintain that. Since the composition of product mix is different in every quarter, it appears it's a little more this time. Overall, for the current year, we maintain it at 27%. Over a period of time also, 27% is a healthy figure. Anyway, next year when we review our product mix, we'll come back with a revised figure with maybe left side or right side, I don't know right now, depending upon the overall product composition. It will be around this range only. That much I can assure you. Thank you, sir. Best of luck, sir. Yeah. Thank you. The next question is from the line of Manish Ostwal from Nirmal Bang. Please go ahead. Yes, sir. Thank you for the opportunity. I have two questions. One on the employee base side. What is the current base of employee? In terms of addition, last three-four years, how many people we added on the technical side? How much money we are spending on the innovation R&D side on a yearly basis, as a percentage of revenue? Okay. Our employee base was around 9,000. Slightly less than 9,000 it was. This year, as we are told earlier also, we will cross around 9,600+. Next year, we are planning crossing definitely 10,000+. Because overall, and most of the employees, what we are adding now is in the technology front. Almost 70%+ of our new recruitment is going into R&D. Because we know we require more and more stronger R&D to take care of this new technology-related products. Like AI as a technology, ML as a technology, quantum as a technology, which are imbibed inside all these new developments. We are adding good technical manpower. Almost 200 scientists also we are taking from premier institutes for our CRLs as part of this activity. Total, we put in R&D around 6.2% last time. It was of our turnover on R&D. This year also, we are expecting a bit more than that only. Between 6%-7% of our turnover, we wanted to invest on R&D. As it was told last time also, total R&D investment this year will be between INR 1,600+ crore only. Between INR 16 and 20 crore somewhere we will plan. It will not be below INR 1,600 crore, that much I can assure you, for doing this innovative R&D across all domains where BEL is operating. Yeah. The second, sir, in terms of you talk about the technology like AI, ML, and quantum technology. In terms of modern warfare, where do you see the significant shift in terms of, I mean, technological trend? Secondly, whether those technologies we are having right now in India or we need to have TOT with other countries. Can you talk about in slightly detail where we are in terms of technological aspect compared to the other players like in the U.S. or China? Let me assure you, we are almost at par with these countries in this new technology domain of AI, ML. We are working closely with our defense forces to see how this modern warfare can be benefited by this new technology of AI, ML. The main challenge there typically in AI, ML is the data. So how to get the right data to train ourselves. For that, we have done considerable work. We are having a very, very close tie-up with our defense forces. We have created an AI incubation center for Navy and Army at BEL. So So that we, user and startups all can work together and develop this technology, this cutting-edge technology well in time. We have done good investment. We have done a good infrastructure and a good framework for these technologies to be developed for the modern warfare. As you may be knowing, our major C4I program, which we have used even in the recent option tool also, was primarily from BEL with support from DRDO as the initial technology provider, but now it is mainly spearheaded by BEL. A lot of AI, ML components were there in these systems, but many more are planned now as a value addition for these C4I programs based on AI, ML technology. We are confident. We can do jointly with our startup ecosystem. We can do jointly with our defense users in place, closely working with them. We can give these cutting-edge technological solutions related to modern warfare without any support from foreign countries. That much I can assure you. Thank you, sir. Thank you for answering my question. Thank you. Thank you. The next question is from the line of Jyoti Gupta from Nirmal Bang. Please go ahead. Thank you for the opportunity. Great set of numbers. I have two questions. One is relating to export component in revenue. How is it likely to look? How is it going to look like in the next five years? Is it going to increase? The second is, we are talking about missiles, but LCA Mark 1, where the CMDO has said that we would finish five LCAs, but it looks like we received two engines in July, and we expected to receive roughly around 12. My sense is, base case scenario, we should be complete with seven LCAs. What would be your contribution in terms of, from the LCAs this year? How will that impact your margins or revenue from the HAL platforms? Okay. Regarding export, we are having consistently performance of almost 20% year-on-year growth on export front. We are confident over a period of the next five years, we try to reach around 10% of our turnover through exports. Right now, it is around 4%-5%. We are constantly putting efforts as overall company is growing at roughly 15%-16%. Export, our internal target is more than 20%. Over a period of time, the export share to the overall turnover will steadily increase. We wanted to reach in the next five years around 10% of our turnover through exports. That is our vision about the exports. We are going in the right direction with reasonably good speed, I should say, on export front. Regarding LCA, yeah, there were some delays of the engine availability to HAL. Our component, our electronic component, which goes in these platforms, because that goes and that is they use for their testing and making the total LCA ready for just fitment for the engine. Their side, we have not seen any challenges. We are regularly started supplying to HAL, and that we continue to supply. HAL finally supplying LCAs to user is not impacting BEL per se. Our regular production to meet their expectation as per the contractual timelines between us and HAL was committed. We are more or less on target for that, and it is not going to affect our revenues per se. What could be the contribution of your revenues coming from HAL? HAL this year, I think. HAL, we are supplying LCA component and then some other helicopter components also. Those are there. Overall, I think we are planning around, you can assume around INR 1,000+ crore total put together for LCA and other helicopter programs of HAL. Typically, INR 1,000± crore INR 100,000 crore may be there because a few radars also we are supplying to them this year for their airport operation. Tentatively, around INR 1,000+ crore, you can assume. One more question, can I add in this? No, no. Please join the queue. Okay. Sorry. Okay. Okay. Thank you. Thank you. The next question is from the line of Dipen Vakil from PhillipCapital. Please go ahead. Thank you so much for the opportunity, sir. Congratulations on a good set of numbers. Sir, my first question is in the line of to understand a little bit of your order book. Sir, can you give us the breakup of the pending orders in your current order book? Maybe five, ten contracts which are large value in your order book. Absolutely. So. As on today, as on 1st of July, technically, the major order book, largest is LRSM program. You may be knowing now, we received one order also this year also out of that. So around INR 5,000+ crore is LRSM program. Fusers is around INR 4,500+ crore. Akash Army is the third one, which. You may be knowing, Akash Prime trial successfully. It was done recently. Nearly came in the media also. So that's around INR 3,000 crore. BMP upgrade around INR 3,000 crore. Ashwini Arudhra Radar around INR 2,500 crore. Shakti around INR 2,000 crore. Shakti EW system around INR 2,000 crore. So like that is their top 10-12 programs itself consisting of around INR 35,000-INR 40,000 crore order book for us. Got it, sir. Sir, and I wanted to also understand, sir, recently you received an Air Defence Atulya Radar from Indian Army. So what would be the kind of execution cycle for such order? I think it is around three years, if I'm not wrong. Because already we have realized first early production model also for that. Total 24 numbers of the radars we have supplied as part of this. Roughly three years, I can say. Exact details I don't have. Typically, because there is no FOPM or other things here, we have to directly start supplying because we have already developed the prototype and are ready with the so-called production version now. We hope to complete this in roughly three years' time frame. Got it, sir. So safe to understand that even electronic warfare suit for Mi-17 helicopters would execution cycle will also be three years? If I'm not wrong, it was four years. Okay. For Mi-17 V-5, as you are telling now. It is depending upon not only our production capacity. It is depending upon what user wants. Because user has to do this is like an upgrade. They are already flying these helicopters. When that will be available to us for these upgrades, they have their own plan for next three to four years. If I'm not wrong, it was almost four years. Got it, sir. Got it. Already passed in that three more years. So total four years is the delivery schedule, if I'm not wrong about that. But that is mainly because of the overall planning jointly between us and Air Force. Based on that, this schedule was worked out, and we are on time for supplying them these subsystems. See, all these are factored in our execution programs. Whatever we are telling is all factored in our execution programs, whatever we are predicting. Got it, sir. Thank you so much for answering my questions. All the best. Thank you. Thank you. The next question is from the line of Hardik Rawat from IIFL Securities. Please go ahead. Thanks for the opportunity. Good afternoon and congratulations, team. On a very strong set of numbers. My first question is, building on the question of the order book constitution, which are the major, considering our guidance, conservative guidance of 15%, roughly INR 22,000 crore of balance revenue to come in the next nine months, what will be the major programs that will contribute to this? Just one minute. Major order to be received or order to be executed in the next nine months? What was your question? Orders to be executed, sir. Orders to be executed. It's okay. LRFAM, of course, always tops for us. LRFAM is around INR 3,000 crore we are hoping to execute this year. HIMSHAKTI is another big program where we are going to realize revenue around INR 1,700+ c rore. Akash Army around INR 1,300 crore. D29 LRU for LCA, BFF, and Arudra around INR 600-800 crore each. Links you to IACCF, Shakti EW, BMP-2 upgrade around INR 500+ crore. The remaining are smaller, smaller things. Overall, we have planned totally how we are going to execute in the next three quarters left over to achieve this growth of at least 15% for this year. Got it. So that's very helpful. One last question would be with regards to the margins front. Now, we have seen a sharp expansion in the operating margins, which have largely been led by the gross margins. Yet our other expenses have grown as a percentage of sales by roughly 215 basis to 9.5%. Any specific reason because of this? Reason for this jump as a percentage of sales? Have we made any additional provisioning this quarter? Yes. Regular provisioning will be a part of whatever we need to do at that particular point of time, depending on the delivery schedule of products. In certain cases, we get the DD extension without LDOs, without the penalties also. We are able to reverse. Provisioning is there as a part of other expenses. That is a regular feature we do. Yeah. So nothing out of the ordinary. Out of our own standard. Yeah. Got it, sir. Thank you so much. Yeah. Thank you. The next question is from the line of Andrey Purushottam from Cogito Advisors. Please go ahead. Hello. Your voice is not audible. Hello. I will request you to join the queue. The next question is from the line of Ajinkya Jadhav from KRIIS Portfolio. Please go ahead. Yeah. Thanks for the opportunity. Yeah. Just wanted to ask, are we into the sonar systems? Have we participated in the tender for the ATAS sonar? Sonar, I think we are the largest supplier of sonars, and we are the trusted partner for NPOL, who is the main designer for sonars in India. We have associated ourselves with them since the beginning. We are doing some proactive investments also jointly with them on sonars. We have our own some subsystems development and indigenization program also for sonars, like side-scan sonar and others. We are planning to have an export-worthy version of sonar also. Overall, I think on the sonar front, we are a good technology provider for our defense forces. We are doing now some more value addition in that by adding this AI/ML type of technologies or integrating it for larger strategic platforms. As such, I do not see any issue of changing our role for that. We are going to further excel only in this domain. We are hiring some more advisors in this domain to see that this strong position in the sonar development we continue to maintain. We are hardly depending on foreign countries on the sonar perspective. Although a few foreign origin sonars are there, they came as part of the platform earlier itself. Any new sonar per se, I doubt whether now we are importing. Yeah. Great Great to know about that. The second question is regarding that, what is the sales mix between, you can say, the component, assembly, and the product in our total sales? The thing is, per se, we are making products only. As part of the products, we do the assembly. Okay. Per se, assembly, we do not take as a business case. Okay. We generally sell some modules or systems or systems of systems. Same thing is about components. Per se, components, direct business, because we have a component foundry also. That direct business is very, very minimal because that is only for some strategic ISRO and other requirements only. That is very, very insignificant, I should say, as part of the business. It is more of a strategic in nature presently. Presently, our sale mix is mainly of products and solutions. Got it. Yeah. Thanks. Thank you. The next question is from the line of Karan Gupta from Asit C Mehta. Please go ahead. Hello. Am I audible? Yeah. Yes. Yeah. Yeah. I just joined a little bit late. I just heard your commentary. One question regarding revenue and margin side. I mean, what's the product exchange that has happened? Kind of 4%-5% of the revenue growth this quarter? On the margin side, we have a gross margin improvement of around 9%-10%. What's the product mix that changed? You also said something on the more you are doing in-house manufacturing of some of the components, which was your earlier outsourcing. What's the impact of, in future, in-house manufacturing and the product mix on the margin? I mean, if you can just quantify, if we are doing more in-house manufacturing, how will it impact positively on the margin side? Okay. Let me again clarify. I think last time also, we told it is not in-house manufacturing. It is in-house design or indigenization, which, as a drive, we are doing. Manufacturing, we do based on the case-to-case basis. Typically, we involve our MSME and other partners more and more. Wherever they are available and their quality output is ensured, we generally take from them only. When we are not finding any MSME partners for doing manufacturing, those items only we do in-house manufacturing. Otherwise, our motto and vision is to promote our MSME partners and take their help as and when required as much as possible. I was mentioning about in-house design and indigenous designs. We are doing more and more efforts for indigenization. Indigenization is a bit different, means designing in India. Manufacturing in BEL or outside BEL, that we see on case-to-case basis. As I told, wherever possible, if any vendor is there, MSME vendor is there, we firstly opt to that only. That only will give us actually more and more margins. Because definitely, when we involve our MSME vendors' eco base, it will be overall beneficial for them and for us also. Only thing we have to ensure is the quality and timeliness of the deliveries. We go through a rigorous process of evaluating our vendor base. Based on that only, we select them. Once we select, we really do handholding and see that they also prosper and we also prosper. That is about this in-house manufacturing or in-house design front. The second point you told about revenue, yeah, this year, first quarter, we had got almost 5% only as our revenue growth, mainly around INR 200+ crore, which we thought we will realize the sales by June because of geopolitical situation, especially in Israel-Iran conflict. Some of the critical components from Israel could not come. Because of that, we could not achieve. Otherwise, our target was at least 10%+ in the first quarter itself. Overall, anyway, definitely, we will cross 15%. In the first quarter itself, we were having our internal target of 10%+. We fell short of this because of this last-minute so-called surprises for us. That is a regular feature nowadays, knowing the geopolitical situation around the world. Sometimes some particular item may affect us a bit more in one quarter. Next quarter, it will compensate. We have overall very, very large product mix. This large product mix will not impact us too much. Like here also, it was around INR 200 crore impact only was there, which definitely, I am confident we will compensate in quarter two. Overall, margin-wise, as you were told earlier also, our product mix is so large, we cannot quantify whether this product mix and what margin will come with this product mix. Average it out, and overall, what guidance we have given will be around that only will be our margins. It will not affect too much because of so-called geopolitical situations or because of the product mix for one particular month, etc. Okay. Okay. Fair enough. Second one on. Anything we are doing with the live simulation? We are providing services to maybe export side or domestically for some companies? Live simulation. Live simulation. The simulator business we are having, simulators we are supplying, exporting also now to some of the countries. Definitely, in India, large complex systems and solutions related to radar or missile segment, we are developing advanced simulators for our Indian needs. We found a lot of export opportunities, and we have exported in the recent past also some two, three good deals we have exported also. We are doing marketing for our simulator business further in many more countries. We are confident that the simulator business is really great going for us, and good growth prospects are there in this business. We are putting some more manpower also in this particular segment and then seeing that some of the large programs, because you may be knowing, all large programs require the high-end simulator also. We wanted to develop those simulators well in time itself so that it can be used while supplying the equipment itself. These simulators can be used for good training from day one itself. We are working for that. Part of the business. What is the part of the business? [audio distortion] Part of the business. [crosstalk] No, no, no. Simulator as a business will be around maybe 2%-3% of our total business. Less than 5%, definitely. One of our SBUs is primarily doing that business, and two of our R&D houses are supporting them. Out of total 29 SBUs, actually one SBU is more focused towards the simulator, and one more SBU is partially supporting them. You can see the overall business also depends upon how many SBUs are working. It is around, you can say, roughly 2% of our business. Okay. Okay. Thank you very much. Thank you. The next question is from the line of Nikhil Purohit from Fident Asset Management. Please go ahead. Yeah. Hi. Thanks for the opportunity. Am I audible? Yes. Yeah. So just two questions. I joined the call a little late. What was the defense versus non-defense ratio? Again, typically, defense non-defense is 88%-90%, and 10% is roughly non-defense, which is our typical figure. Got it. Okay. Does our exports order info guidance remain intact? [crosstalk] Yes, yes. We are confident. We are confident of. What's our target? We have given around $120+ million. We are confident we will have that. Good progress already has been done. Although we do not give a direct breakup of how much export order we have received. Quarter to quarter, we do not give that. We give overall consolidated figures only. In this order, what we have received right now, also there is some portion of export order also. We are confident we will meet our guidance on export. Got it. Thanks. Thank you. The next question is from the line of Umesh Raut from Nomura. Please go ahead. Thank you so much for giving me an opportunity once again. My first question is, sir, pertaining to possible increase in employee cost on the account of eighth pay commission now, specifically in FY2028. Because I think if I look at early assessment of what they are recommending, I think it is about [audio distortion] extent of increase in basic pay. So any assessment, early assessment, what kind of increase we can expect in case of employee cost? I think that point also, last time also, we indirectly hinted to you. This eighth pay commission, things are not directly relevant for us. Although indirectly, it will control our PRC. There will be a separate pay revision committee which will be constituted by government for PSUs. That will get some input from this eighth pay commission, but it will not be exactly the same. In the PRC, they give a lot of flexibility to PSUs to decide based on their profitability and viability from a financial point of view. At that time, we will see. Definitely, we want to give the best to our employees. I do not see any big challenge in FY2028 for that. We will start doing some small provisioning from 2027 and onwards and see that. I do not think it is going to impact us too much because our overall growth, turnover growth will compensate for this small increase in employee cost. That much I can assure you. Got it, sir. Sir, my second question, if I look at our services business, I think there also we have set up now new SBU related to SAS business, especially in the non-defense area as well. I think our service business contribution and overall turnover is still at about closer to 10%-11%. Looking at our defense install base as well now, it looks like we have a sizable exposure towards install base, and indigenization is also going up. How do you think this services turnover as a percentage of total revenue for you to go up in medium to longer term? As you have told, 10%-11% is our services sector. Sorry to disturb you, sir. Again, your line is echoing. There is an echo in your line. That is Madam Nandimura's side, I believe. They have to mute her. Shall I go ahead, Madam? Yeah, yeah. Please go ahead. Yeah. 10%-11%, as you have told, we are trying to increase it to 13%-14% over a period of the next two years. Definitely, a slight increase will be there in the services because of some of the new areas also now we are pursuing in the services, especially one order which we have received even today, what we have given public domain data related to financial services-related business by our software SBU. We have got a good order. These orders of non-defense variety also will increase. We will have a 3%-4% overall increase in our overall product mix because of services. We are expecting 10%-11% will become 13%-15% over a period of time. Got it. Sir, just one clarification. As a part of defense offset contracts, does services come under as more of a potential opportunity for exports? Everything can come under offset opportunity for exports. Definitely, right now, we are not getting any big leads of the services variety under offset. Under offset, typically, it is a contract manufacturing type of thing or some of the subsystems which we have to supply to them as BNE, etc. Services per se and offset, these two are not gelling together as of now. Definitely, there is a scope. Thank you, sir. All the very best. Thank you. Thank you. The next question is from the line of Harshit Patel. Please go ahead. Thank you very much for the follow-up, sir. Sir, we had received an order worth close to INR 2,000 crore from HAL for the electronics LRUs for LCA Mark 1A. Sorry to disturb you, sir. There is a noise in your background of whistling. Hello? Is this audible? Yeah, yeah. [crosstalk] But there was a. Yeah, some noise is there, echo. We will manage. When we speak at the time, I think he has to mute. Sure, sir. We'll do that. Sir, we had received an order worth INR 2,000 crore from HAL for the electronics LRUs for the first 83 numbers of the LCA Mark 1A program. Sir, how large could be the follow-on order for the subsequent 97 numbers? How much more wallet share will we take with the enhanced offerings in this upcoming order? It will be more or less in that order of 83-97 and yearly escalations. HAL cannot give us more than that. It will be because quantity to quantity, and typically, it is year-on-year escalations. That will be there. You can extrapolate how much it will be. Roughly, it will be around INR 3,000 crore, I can say, including escalations. Roughly INR 3,000± crore. We have to sit across with HAL and do smart negotiations. That only will tell us what is the final figure. As and when we finalize that contract, we will definitely intimate to all of you. You can assume ballpark figure of roughly INR 3,000± few hundred crore here and there. Sir, I was asking from the point of view that won't we be supplying many more subsystems besides what we are supplying right now? For example, the Uttam AESA radar could be part of our offerings when we go to these additional 97 numbers. There could be much more offerings on the electronic warfare subsystems as well. Will we be supplying the same subsystems, or will we increase our scope as well in this newer order? You have rightly pointed out what I was referring to because you told electronic subsystems, which we have supplied for 83. For 97, we will supply all those same. Of course, EW and radar are the two new subsystems, which is still not finalized configuration or minor details of that. I think in both of them, there are two partners. We do not know who will become L1 in that. We are only bidding, but not confident whether we will get the full order. Maybe for those EW and radar, there is a 50% probability, I should say. Although as management, I should be confident about 100%, I know my competitor also would like to have. The second thing, HAL may decide to give it to L1 and L2. Many times, when systems are complex and timelines are crucial, they split the order between L1 and L2. Right now, EW and radar related, those discussions or those draft RFPs or contract discussions have not started with HAL. I cannot quantify right now what type of terms and conditions they are going to write for that. Once they give us some draft RFP, then I can come out with a more revised figure for this EW and radar. Right now, I have excluded EW and radar from that. Only the other sub-electronic subsystems, around 11-16 type of subsystems which we are supplying for them. Those subsystems only, I told an order value of around plus minus INR 3,000 ± few hundred crores. Understood, sir. Thank you very much for the elaborate response [audio distortion]. Thank you. The next question is from the line of Darshan Parmar from Jefferies. Please go ahead. Oh, hi, sir. Congrats on a good set of numbers. Most of my questions are answered. I just had one question regarding the potential opportunity on the drone front. If you could give some sense on that, please. Drones per se, we have some four or five major leads where we are working on drones. One of the leads anyway is the Archer UAV, for which some trial and other evaluations are going on. Immediately completing that, we are expecting a big order on Archer UAV. In addition, there is a loitering ammunition. There is a logistic drone. There is a male variety of drone requirement which has come. We are pursuing these three, four more opportunities of drones. MALE UAV and Archer are definitely big leads for us. We are confident by year-end, at least one of the orders we may get out of these four or five leads before this. In the next two to three years, definitely some big orders we will expect from that. Presently, I don't have a quantified figure about that because these all are in different stages of evaluation only. They have not come to a contract finalization stage where I can clearly give you some numbers. Definitely, drone and drone warfare and anti-drone, these are the areas of importance for BEL. We are committed for this particular segment because we know we can give very good solutions to our defense forces in this segment. All right, sir. Thank you. Thank you. The next question is from the line of Girish from MS. Please go ahead. Thank you for the opportunity, sir. Just a couple of questions. Firstly, on the order book, what portion of the order book of INR 75,000 crore that you have today is recognizable as revenue beyond FY 2027, as in the contractual obligations and your execution, which is going to be beyond FY 2027, whether it is FY 2028 or 2029, if you can quantify that? The second question I had was on the order book on currently, how much of it is nomination versus competitive bid? Those two were the questions. Order book, out of this next two years, only a majority of the orders we are going to execute. Only some two, three big programs like FUSES is there, which is there for next 10 years, actually. And EW systems solutions are typically for around four to five years delivery schedule. These are only a little bit larger. More than three years out of this order book, around INR 14,000 crore is there for more than three years. Remaining all are within three years executable. Regarding nomination and competitive bidding, the ratio is around 90% ± to 10%. 90-10, we can say roughly. 90% nomination, 10% competition as of now. Is this competition including the non-defense, or are you talking only about defense, sir? 90-10 ratio? [crosstalk] Put together. Even some of the non-defense also, we have got on nomination. It is not that only defense we get on nomination. Understood. Understood. Understood. We have acquired across a number of years. Some of the nomination projects we have got, like this platform screen door, which we have got. So many other projects are there on non-defense also. This mix is for both defense and non-defense, both. Just like you said, three years plus is INR 14,000 crore. Two years plus would be how much, sir? Would it be like INR 25,000 crore or any ballpark number here? Yeah. Two to three years is around INR 8,000+ crore. So 8 plus 14, around INR 22,000-INR 23,000 crore is two years plus. Okay. Thank you, sir. We can have one last question, please, sir. Okay, sir. Thank you. The next question is from the line of Hardik Rawat from IIFL Securities. Please go ahead. Appreciate the follow-up opportunity too. Quick question. Firstly, with regards to the exports opportunity, sir, which are some of the key pillars that BEL has developed which are finding good traction in the export markets? The thing is for us, all our radars, missiles, communication systems, software solutions, these all are there in our export-related portfolio for us. Drones and anti-drones, especially anti-drone systems, also a lot of opportunities are existing right now. One new area now is these C4I solutions. After Opsindur, you might have seen so many of our C4I solutions were time-tested. Now many of the countries are coming towards us for giving a customized solution for them for the C4I. In addition, our contract manufacturing related to TR modules and LB racks, we call it, those type of things also are increasing for us. There is a good set of products and solutions across almost all domains where BEL is working. Good export leads are there right now. That is why we are confident we will achieve the. Whatsoever we have given guidance at the end of the year, we are going to achieve that. These products are of almost all major areas of operation of BEL. Got it, sir. Lastly, sir, what would be the CapEx figure for FY2026? CapEx figure is INR 1,000+ crore. We are going to have this time INR 1,000+ crore only. It cannot be less than that. That is, we are committed this year because we are having large expansion and other plans already are underway, and a lot of capital items are required for our new generation test instruments and others. Overall, put together, we have done good planning for that, and we are confident we will definitely cross INR 1,000 crore. Got it, sir. That helps. Thank you so much and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Harshit Kapadia for closing comments. Please go ahead. Thank you, Vishakha. We would like to thank Manoj sir, Damodar Bhattad sir, as well as Shri Nivas sir for giving us an opportunity to host this call. Any closing remarks for the investor community, sir? Okay. Same is like future outlook for FY2025-2026. We are maintaining all those parameters. I will just repeat that. The revenue growth, more than 15%. EBITDA margin, more than 27%. Order inflow, INR 27,000+ crore, excluding QRSAM. If QRSAM comes, which we are still confident for Q4, if it comes, then it will be a result, INR 30,000+ crore. R&D investment, as it was committed, it will be INR 1,600+ crore only. CapEx, INR 1,000+ crore. And export, $120+ million. So these are our future outlook for 2025-2026, and we are confident of achieving this. Thank you. Ladies and gentlemen, on behalf of Elara Securities Private Limited and Bharat Electronics, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you all. Thank you.