Ladies and gentlemen, good day and welcome to the Q1 FY 2027 earnings conference call of Bharat Electronics Limited, hosted by Motilal Oswal Financial Services. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. This conference may contain certain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Ms. Teena Virmani from Motilal Oswal Financial Services for the opening remarks. Thank you. Over to you, ma'am. Thank you, Ajit. Good evening, everyone. On behalf of Motilal Oswal Financial Services, I welcome you all for Bharat Electronics quarter one FY 2027 results con call. I would like to thank the management for giving us the opportunity to host the call. From the management side, we have with us Mr. Manoj Jain, Chairman and Managing Director, Mr. Damodar Bhattad, Director (Finance) and CFO, and Mr. Sreenivas, Company Secretary. Without taking much time, I hand it over to Mr. Manoj for his opening remarks. After that he will open the floor for Q and A. Over to you, sir. Thank you, madam. Good afternoon, all. Financial results for quarter one are just uploaded. Actually, our board meeting ended at 3:45 P.M. After that, we have just uploaded, and you might not have seen till now. I will just brief the major highlights of the quarter one of financial year 2026/2027. The revenue from operations has increased to INR 5,533 crores up to Q1 as compared to INR 4,417 crores in the previous year Q1. With a growth of 25.27%. The Profit Before Tax increased to INR 1,403 crores as compared to INR 1,289 crores in the previous year at the same quarter, with a growth of 8.81%. The Profit After Tax has increased to INR 1,048 crores up to Q1 as compared to INR 969 crores up to Q1 previous year, with a growth of 8.17%. The EBITDA margin up to Q1 is 25.83%. The earning per share increased to INR 1.43 up to Q1 as compared to INR 1.33 previous year at the same time. The order book position as on first July 2026 is INR 72,258 crores and orders acquired in this quarter is INR 3,754 crores. This is a brief financial highlight of Q1 2026/2027 from my side. Now the floor is open for Q and A. Thank you. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Amit Dixit with Goldman Sachs. Please go ahead. Hi, good evening, everyone, and thanks for the opportunity. Couple of questions from my side. The first one is with respect to order inflow that we have witnessed in this quarter. If I compare it with Q1 FY 2026 and Q1 FY 2025, the order inflow has been pretty lean. Just wanted to understand the reasons for that, whether you see a more structural component to it or it is just the timing of the orders. Just wanted to get little bit more understanding on that and also QRSAM order, which seems to have been delayed. That is my first question, sir. Let me tell you, last year, you may be knowing that we were supposed to get orders by 31st March, but one or two orders we got in the week of April. That's why we could not meet our actually previous year target. Our first quarter orders were very good. Actually that was more of a spillover of the January to March quarter. This year it was more structured. Whatsoever we were going to get by January to March, actually we got 2,000 to 3,000 more, I can tell you. Because we thought around 25,000, but we finally landed in around 30,000+. That's why there was no backlog per se. Actually, one or two orders were taken from this year first quarter also. This year whatsoever we have received INR 3,700+ crores. It is what was we planned, that only. As such, there is nothing to worry. We are definitely going to meet the guidance given about the order inflow for this year. QRSAM, we told we were highly optimistic to get it by March, but procedural delays we knew. That's why we told it may go to Q1/Q2. Maximum by September we will get, and I am still sticking to that. Just CCS only is waiting for all of us and hopefully when CCS meets I think they will clear QRSAM. Our side, all inputs, every activity is over from all of our side. We are just waiting for the CCS approval, and that time, we will get the good news about QRSAM. Great, sir. The second question is around Project Kusha. We have seen that there have been testing of M1 interceptor. There has been some movement around RFP of M2 also. Just wanted to get your thoughts on when will the testing be complete, when do we expect to get the order, and what could be our portion in that? As I told earlier also, the Kusha program is spearheaded by DRDO, and we are their largest DCPP partner for various subsystems. Right now the trial was of the missiles. After that they will do different configuration of missiles, then configuration with radar, control center, as integrated fashions, et cetera. They will have their own structured way of testing. That question actually you have to ask from DRDO. Let me assure you, from our side, there is no delay in what are subsystem, systems level support, which we have to extend to DRDO for this very prestigious project. As already told, I think the order will be of the order of INR 40,000-plus crore we are expecting. That will be minimum 2028, 2029, which we had indicated last time also. After this series of testing, when there will be lot many more different type of evaluations, after that only RFP will be issued for commercial activities. There's still a long way to go. You have to wait and watch with these different R&D level development, which is done by DRDO, well supported by BEL. Okay, sir. Great. Thank you so much. All the best. Thank you. The next question comes from the line of Mohit Pandey with Citi Research. Please go ahead. Yeah. Good evening, sir. Am I audible? Yeah. Yeah. Okay. Yeah. Sir, first question is, again, on orders. The explanation on the year-over-year decline is quite clear. Just wanted to get a sense of this year for the base orders. Are we expecting them to be back-ended or they will be likely evenly spread out through the course of the year? That would be question number one. Okay. Let me tell you, the thing is, we don't publish quarter-by-quarter targets for this. That is our internal assessments only. What leads or what PNCs concluded, not concluded, and based on that, we have our own internal follow-ups on any slippages, if at all. Quarter to quarter, we are not publishing. For us, it is yearly target, which we have already given at the start of the year, the guidance. That is INR 55,000+ crore, including QRSAM. We are sticking to that, and definitely two, three big programs are in the real pipeline of CCS or other type of approvals. We are not facing any problem in getting these order inflow for this year. Understood, sir. Sir, while we don't publish the balance sheet or cash flow with first quarter, any color you can give on the payments or receivables? Yeah. Has there been an improvement versus fourth quarter? That would be one. Secondly, on margins, if you can give any color on. This quarter, there has been a year-over-year decline. Any particular thing that you'd like to highlight there? Is this just product mix or are there any one-offs, et cetera as well? Yeah. Yeah. As far as the receivables are concerned, the number of days as on 30th June, it is around 140 days. It was 176 days as on 31st March. It is at 140 days as on 30th June. It has improved over March. Receivables are good, cash flows are good. There is not much concern on those front. As far as margins are concerned, as we have already told, current year EBITDA margin guidance we have given of 28%, we remain that. Quarter-on-quarter, there could be variations because of the composition of product mix. Due to that, there are some variations. Otherwise, the current year EBITDA guidance, whatever we have given, we maintain that. There's no particular cause of concern for the margin on the quarterly basis. We don't have to go by that. Overall, on a yearly basis, we maintain the EBITDA margin of 28%, which we have given already. Understood, sir. Sir, just to clarify, the margin, it's due to product mix and not due to input cost pressures. Just to clarify that. You're saying this is due to product mix variation, yeah? Yeah. We are telling it is due to product mix variation, not due to input cost. Okay, sir. I'll come back in the queue. Yeah. Thank you so much, and wish you all the best. No. The next question comes from the line of Kavish Parekh with 360 ONE Capital. Please go ahead. Hi, team. Thanks for the opportunity. Sir, regarding the order book that you are sitting on today, could you help us understand the broad split across categories, say naval versus air versus, say, land-based systems? Incrementally, in terms of order inflows over the next few years, excluding QRSAM, which of these segments do you expect to be the key growth drivers? Let me tell you, army, navy, air force, more or less it is similar. 30%/30%/30% out of the total 100%, which we are having. 90 is from defense. Roughly 30%/30%/30% is army, navy, air force. Order inflow also are more or less in the same line only. QRSAM actually is Army and Air Force combined order. There are Air Force-related, also some big-ticket items. Navy also, some big-ticket items will be there. Again, in the year, this INR 55,000 also, more or less, it will be evenly distributed across Army, Navy, Air Force. As such, there is equal priority, I should say, and/or equal confidence of all the three forces in this. As on today, as per order book, the main components are electronic fuse for Army, LRSAM for Navy, LCA LRUs for Air Force, BMP-2 upgrade, again, for Army, Ashwini radar for Air Force, and EW suite Mi-17V5, again for Air Force. MPR Arudhra, Air Force. Like that, these are all major order book. Again, it is spread across all the three services. Understood. As a follow-up to that, would the margin profile differ meaningfully across these segments, or is profitability largely product-specific irrespective of the segment? Just if I can continue with my second question, what were the key products executed during this quarter, some which you would attribute for the margin decline this time? Okay. We cannot extrapolate that because of this product margin decline was less or more as such. Again, we are giving you only a glimpse of some top eight, 10 projects, not the details, because detailed projects are so many. Firstly, this margin spread across Army, Navy, Air Force is uniform. Overall, we are having across Army, Air Force separately some subsystem, systems, and system of systems type of projects. It is not that in particular one segment or Army, we have less margin or Navy more margin. It is not like that. It is spread across type of solutions, and our solutions are spread across various varieties. The major orders executed in this quarter were LRSAM, MPR Arudhra, LINK U2, upgradation of periscope, BSS project supplies, AON 51 systems, Akash-T, some supplies, Himshakti System, some supplies, fuses, and receivers. Again, this is only 10 important projects. Overall projects are many more. Again, correlating that this particular project has less margin or this has more margin, it's not correct to estimate because of the total spread across number of projects which we execute even in a quarter also. Understood. Just the last question from my side, sir. On the counter-drone ecosystem, could you share some thoughts on BEL's role today? Which systems or products are we currently involved in, and what components or subsystems do we supply? Here, the private sector also appears to account for a sizable share of the opportunity of the overall market. Could you share your perspective on which players are doing well in terms of innovation and product development? Which areas within the counter-drone market remain relatively untapped today, and where do you see opportunities for BEL to expand its presence or, say, gain market share? Firstly, let me tell you, drone and counter-drone, this market is growing like anything. You might have seen in the recent conflicts also, the real threats and real deterrents, most of them are centering around drone and counter-drone solutions. The market is growing exponentially where there is an opportunity for big companies like BEL, mid-size companies of private sector like Zen Technologies, so many other companies are there, and startups. There is growth prospectus for all of us. We need not worry or need not eat the pie of other fellow. Everyone has some unique solutions. What we are more focused is large, high-power, laser-based or microwave-based DEW solution, integrated D4 solutions. Means real with hard kill. The more of hard kill-based, more complex systems, we are more focusing on. It doesn't mean that we are not working on drone-killing drone or EW jammer itself killing or bringing down the drone. We are having also some products which we call the D2, some products D3, and some products real D4 variety. D4 means this will have hard kill also. Hard kill, soft kill, only detect, and then use some other conventional way of neutralizing. This total complex solution, we are more focused. Again, I'm stressing, we are more focused on this hard kill-based large systems more. Other players are there, and especially startups are there for the D2 type 2 systems and different innovative solutions. There is a requirement of all type of solutions for drone and counter-drone. We don't foresee a challenge. Definitely, we have put our own CRL, Central Research Laboratories, and PDICs to look into some more innovative solutions, either themselves or collaborating with some startups. Good startup ecosystem also we are tapping now, and a few orders, although right now small, we have taken jointly with the startups, and we are going in a big way for this type of a small innovative products also. The same case may be true for our so-called mid-size competitors. Of course, this large, complex domain solution, right now, we are the de facto leader. Understood. Thanks a lot for that explanation, sir. Thank you so much. All the best. The next question comes from the line of Harshit Patel with Equirus Securities. Please go ahead. Hi, sir. Thank you very much for the opportunity. Sir, my first question is, you have highlighted the potential large orders materializing from major naval platforms such as MPV and P75I. Could you also give some color on potential order sizes from the follow-on P75, that is three submarines, P18 that will be Next Generation Destroyers, and the follow-on on P17A, that will be P17B. What could be the potential order sizes for us from these large projects? I understand they might not materialize in FY 2027 itself, but over FY 2028 and 2029, what could be the sizes, sir? Let me tell you, right now it is too early to predict the business volume of that. Like Project 17 Bravo, P18 or other projects, NGD. These projects, we are in the configuration finalization, technical interaction, specification finalization, subsystem indigenization, in those type of roles right now. That role we are playing jointly with our DRDO or our Navy friends. That activity, once it crystallizes for one of the program with the timelines given by them, when it starts discussing BOQs, that time only we will really come back to you about real time frame when we may get this order and the size of the order. Today, it may be a bit early. Maybe one year down the line, at least for maybe NGD, we may have better clarity about these two figures. These programs are definitely beyond 2028, 2029. Not before. It takes its own time to finalize the configuration and finalize the exact volume of business for BEL, for them, these programs. Understood. Sir, secondly, the media reports suggest that the Adani- Harshit, I'm sorry to interrupt you. Your voice is a little muffled. Could you please use your phone on the handset mode in case if it's not on handset? Is this better? Yes, a little better. Thank you. You may go ahead. Sir, recent reports suggest that Adani Defence will be the electronic system integration partner to DRDO for the Netra Mk2. Will we have no role to play over here? Which are the other areas and platforms where we will be competing with this credible competition going forward? Let me again Ladies and gentlemen, the line for the management has dropped. Please stay connected while I get them reconnected. Thank you. Ladies and gentlemen, the management has been reconnected. Please go ahead, sir. Yeah. Just explaining about this particular Netra 2 project. This project, I think bidding was done maybe one and a half years back, roughly. We also participated in the bid, but unfortunately we were not L1. It's part of the competition. In some program, somebody will be competitor, somebody will be L1, somebody will be L2. In this particular program, Adani became L1, and they are the system integrator for this program. Of course, subsystem level modules or capabilities of BEL will be made use of by DRDO as well as with Adani. Our strength of subsystems like radar, EW or data links, and so many subsystems are there in this Netra program. Those subsystem level expertise, DRDO as well as Adani will tap our thing. Of course, the SI role in this one, we missed. We were not L1 and Adani became L1. It is part of life. Some program as SI, we will be L1, some program we may not be L1. Our subsystem strengths or our in-house strengths of developing these subsystems, that will definitely give us a good business down the line. Understood, sir. Thank you very much for answering my questions. I'll come back in the queue. Thank you. The next question comes from the line of Bhalchandra Shinde with Motilal Oswal Financial Services. Please go ahead. Hi, sir. Bhalchandra Shinde here. Sir, would like to know on recent Astra Mark has been opened for the private players. How you see that as a trend for the missile programs? Many programs are coming up, sir. How we see the private participation opening up in the missile programs especially? Definitely, this question you should ask more from a private fellow than from a public sector like BEL, who is today not established player in missiles. Although, we are also aspiring or entering into this missile domain. Definitely, we are right now seeing from the other side. Like the private fellow is seeing, we also are seeing. The issue is, this particular domain, as you again know, during recent conflicts in last two, three years, we have seen how important the missiles are for any war scenario. Quantity and quality both matters here. Definitely, to keep case of such requirement, there is a scope of so many players other than BDL for this particular such requirement to be met. Where BEL and other private fellows also are pitching in. In two, three programs, we are actually collaborating with private fellows, and then we have got some orders as BCPT partner. As such, this particular domain is very important, and role is there again for BDL, BEL, and private companies. All of us have a role to play for meeting the surge requirement. Let me again assure you, in most of these missile programs, the major electronics, today we are the leader because that electronics is more complicated than a radar or others, where we have so many subsystem and expertise for customized solutions. That will give us enough future businesses. Sir, how much one should assume the pipeline over the next five years for missile program? That is very difficult to predict. For that, you have to ask either ministry or maybe NSA office, because these are strategic things, and most of these strategic things are not even openly discussed by them also. We are seeing based on the projections given by all other countries, like European countries or U.S., et cetera, what type of missile production they are expecting. Similar inflow will be there for Indian missile programs also. We can only extrapolate that, but exact quantities, et cetera, we cannot tell you, because that is a strategic call which Government of India has to take, not we. We have to gear ourselves for that. We are gearing ourselves, that much I can assure you. Sure. Thank you. Thank you. The next question comes from the line of Hardik Rawat with IIFL Capital. Please go ahead. Thanks for the opportunity. Sir, my first question would be with regards to the P&L. While we've seen quite a commendable 25% YoY growth in revenue, at the same time, our other expenses have actually declined by roughly 20%. Just wanted to understand, are there any sizable provision reversals that have taken place here, or what is the reason for this decline in other expenses? During the previous year, the provisions relating to the liquidated damages during this current quarter, April to June of 2025, was on the higher side, based on the delivery schedule of those contracts which are executed during the previous year. Due to which current year, that is not there. That is a difference where the other expenses have come down. That is helpful, sir. Second question with regards to the counter-UAV discussion that happened a bit earlier on the call. You mentioned that BEL would be looking more towards the directed energy weapons, both laser-based and microwave-based. Sir, could you please throw in some color as to when should we expect a prototype in its most earliest phases being developed by BEL, and by when do you expect commercial sales from this product to begin? Let me tell you, we have got enough orders already in last three years for this two-kilowatt laser-based DEW solution, and which we have most of that, something like 80% of those orders already we have supplied also. Of course, microwave DEW-based solutions right now is still under evaluation, although we have the prototype ready. These prototypes we had made jointly with the DRDO. Parallelly also, we have started some customized configurations, especially for export purposes. In export also, we are getting very good leads. We have given very good demos to some of the countries, and they have shown very keen interest on this high-power laser or microwave-based DEW solutions. We have our own in-house systems to make customized different products for the basic design. But the basic design originally came from DRDO for us. They were our real development gurus. Today we have the capability to customize them or to come out with different versions, upgrades, upgrade on range, upgrade on higher power laser, et cetera. That there are a series of product versions, we call it. They are already pipelined, and one or two we have given demonstrations also to our end users as well as to some of the external countries, export countries, who have shown some interest. As and when this confirmed order comes, I will again let you know. Got it, sir. Thank you so much. The next question comes from the line of Dipen Vakil with PhillipCapital. Please go ahead. Hi. Thank you for this opportunity, sir, and congratulations on a great execution. Sir, my first question is on your order book, sir. Sir, you currently have INR 72,000 crore worth of order book. Can you help us with the order book breakup for 10 major orders that are there? What would be the quantum of these orders? Yeah, certainly. The main orders are few. One minute. Just one minute. In the last slide. Sure There we had the detail which I was reading. Product by product, I will just tell you. First one is fuse. Of course, largest order book consists of fuse because fuse requirement is for eight years more we have to supply. Then we have LRSAM orders, then LCA Mark 1 and Mark 1A LRUs for this 83 and 97 aircraft. Then this BMP-2 upgrade. Then Ashwini Radar. Then EW suite for Mi-17V5, then MPR Arudhra. These are the top seven projects which are there in our order book as on first July. Is it possible to share quantum of the order book? These seven, eight projects are around INR 20,000 crore. Okay. Out of INR 70,000 crore. Overall, we have so many small projects consisting of 400, 500 line items minimum. These are the top seven items, which consist of around INR 20,000 crore plus of order book today for me. Got it, sir. Sir, my second question is that, for the order pipeline that you have suggested for INR 55,000 crore, if we consider excluding QRSAM, which would be the major orders which are currently gaining traction on the expected lines? As I told last time also, Shatrughat and Samaghat, we may get in another three to six months timeline. The biggest is that after QRSAM. As I told, NGC or P75I, one of these two, definitely we may go through. Maybe both of them we can go through, because government has to give approval. Again, they are waiting for CCS approval only. We are confident out of that, as I told last time, at least 100% probability of having at least one of them, and more than 50% probability of getting both of them. That's why these two programs are another major subsystems are there in these two programs, for which we may get a big order. Of course, HAMMER project also, we are going to get in this financial year, and Shakti phase IV. These are also a few more major programs which we are expecting orders in this financial year. Got it, sir. Sir, apart from these platform orders or base orders, what would be the quantum of base orders that you are expecting in this year? If put together, I told total INR 55,000 crore. Out of that, INR 30,000 roughly will be QRSAM. Around INR 15,000 plus is these platform orders, and remaining will be the other base orders of smaller quantities, support, services, or AMCs, all these put together, remaining. Got it, sir. That's all from my side. Thank you so much, and all the best. The next question comes from the line of Atul Tiwari with JPMorgan. Please go ahead. Yeah. Thanks a lot, sir. Sir, my question is on the likely impact of pay commission- I'm sorry to interrupt, Atul. You're sounding a little muffled. Hello? Could you please use your phone on the handset mode in case if it's not on handset? Hello, sir. Is it clear now? Much better. Yes, please go ahead. Sir, my question is on the likely impact of pay commission provisions on company's margins over next two, three years. When will these provisions start, in which quarter? What will be the likely quantum and the impact on the margin? Current year, January 2027, current financial year, from January 2027 onwards, the wage revision is due. For the current year, the provisions will be made for three months period, January to March 2027. This is for the current year. Next year, of course, it will be depending on things settle or not. Again, if it is settled, it's fine. Otherwise, it's full provision. As far as the impact is concerned, because the turnover will be increasing year-on-year, as we already told that we are projecting a good growth in the coming years. We expect the employee cost to turnover to be in the range of around 12% even in the coming years also, which is now also 12% last year. In the coming years also, we expect it to be in the range of 12% employee cost to turnover percentage, since the turnover will also be growing in good scale. Okay, sir. Despite the pay commission provisions being implemented, you don't anticipate any change in employee cost to the revenue ratio over next two, three years, shortly? You are right. Since the turnover will be increasing in that scale, so the impact of the employee cost, whatever increase has happened after the base revision, will be absorbed by the turnover increase, and the overall percentage we expect it to be around 12% itself. Okay, sir. Thank you, sir. Very clear. Thank you. The next question comes from the line of Vikas Singh with ICICI Securities. Please go ahead. Good evening, sir. Thank you for the opportunity. Sir, my first question pertains to while we are very confident on maintaining the margins in FY 2027, do our supply chain contracts shield us from any material cost inflation in FY 2028, 2029 as well? Those probably would come at a later stage in terms of contracting. No, we are not forcing any change because of material cost inflation. The thing is, as I told earlier also, we are in the continuous state of indigenization drive, That will directly, indirectly compensate for this type of material cost escalations or any other issues which can come in near future. We are actually increasing our investment on indigenization in a much more larger scale, We are reflecting in our MoU with government also. These extra efforts which we are putting, again, let me assure you, will make us safe from margins, et cetera, or escalations which may happen in future. We are taking these type of proactive steps to control that. If you could share your indigenization current versus what you are aiming for in couple of years. The thing is, aim is the next five years zero import of any module, sub-module level things. Barring components, semiconductor components, all other type of subsystems, which we are importing, some of the subsystem at RF, microwave or SBCs or something compute, et cetera, we are importing as modules. These all modules, we have set a target to complete all these indigenization in next five years, including verification, validification, certification as a form fit replacement. That we have made our target, We have given enough provisions for that. We are coming out with our indigenization policy also. Formally, we will release our indigenization policy quoting this fact, which I have just recently told you. We are allocating some special budgets for this indigenization drive, We have got very good support from industry also for that. Our MSME and startups also are aligning us with us to meet our this indigenization drive. Okay. Sir, what would be our annual CapEx and what percent of that would go for indigenization? Let me tell you, CapEx, we keep outside of indigenization. Indigenization, we generally consume, if at all, our R&D budgets, and that definitely we are going to increase. Our main CapEx is for infrastructure for our, what we call production-related activities, capacity enhancement for that. That, as we have given you guidance, INR 1,200 plus crore we are investing under CapEx, which will take care of our production and other type of investments. This indigenization, et cetera, comes from our R&D budget. We had given guidance also, more than INR 2,200 crore R&D budget we have allocated for this year for all type of niche technology development, indigenization, and other collaborative R&Ds. Noted, sir. Sir, lastly, any update on AMCA program? Definitely. AMCA program, we and L&T are really working together. More or less, we have arrived at our internal pricing, and all type of sub-module related clarity has happened. We had apex level meetings, which means two senior level meetings also happened, I think one more meeting, we will finalize everything so that we are ready to submit our RFP response at the earliest. Okay. There's some deadline which got extended for the RFP submission. Now what's the new deadline now? I am not exactly sure whether it was extended by two months or three months. Actually, I knew that it is extended, that's why in the month of August, we are making our response ready by mid-August. I am not exactly sure about how many months extension we have got. Maybe before end of this call, I will let you know, because that my working level team is doing. We were expecting a two months extension, hopefully. What we have got, I am not sure. Definitely we will meet that timeline. That much I can assure you. I will come to know about the exact timeline in few minutes. Noted, sir. Noted. Thank you, all the best. Thank you. The next question comes from the line of Jyoti Gupta with Ashika Group. Please go ahead. Good evening, sir. Thank you for the opportunity. I just wanted to understand that delay in Tejas, which we've expected somewhere four Tejas to be delivered, the fully loaded ones, by August. The subsequent six, which are supposed to come apart from this four in the upcoming six months. If the four doesn't get delivered, then any further, don't you think there will be delays in terms of supply requirements for the remaining six Tejas? Will that not impact your revenue or your margins on that front? Because you mentioned LRUs. Yeah. Let me again clarify. We are only selling these LRUs to HAL. These LRUs are around 11 types of main LRUs related to LCA. Then some other EW related additional LRUs, which they take time to time. These LRUs are electronic modules which are separately tested as per the approved procedure, then we supply them to HAL. Let me assure you, we have given much more than what they really want to them. They already have enough numbers of electronics LRUs as per the contract delivery schedule we have given them, and that is available with them. Let me again assure you, no Tejas will be delayed because of LRUs being supplied by BEL late. That much will not happen, I can assure you. We have given enough quantity to them to make. Right now, as per the reports from public and media, the main bottleneck is still the engines. HAL will tell you better when they are getting engines and when they are supplying the Tejas aircraft. But LRUs point of view, we have given enough numbers to them. No, I wanted to understand that while you have already supplied more than that is required, will that not affect the pipeline for the further ones? If the current status is a status quo, then possibly, what will happen to the future Tejas? LRU going forward could actually come to a standstill. This was my point. Okay. Your point understood. Sometimes. Generally, these electronic modules are separately tested, and they can be kept as a stock also. In case HAL tells us to go slow We need not make then those modules. We will have the material with us, but we can make the module and test the module based on their supply timelines. As on today, they have not indicated any slowness to us, we are going ahead with our plant capacity and plant planning for this program. As such, there is no issue, but in case they tell, it may, if at all, affect by a few hundred INR crore here and there for us. Maybe INR 200 crore, INR 300 crore turnover may be shifted by a few months for me. That definitely, when we are planning for INR 30,000 crore, INR 300 crore is less than 1%, and this type of business level so-called changes or schedules, plans, et cetera, they are part of life, and we can definitely absorb this type of less than 1% significance for us type of delivery schedule related negative challenges, I should say. That we can do. Okay. Now let me tell about this AMCA program. Now, I think the date is shifted by two months to 27/8/2026 is the date of RFP submission. Actually it was shifted by two months. 2027/2028. It is there right now, the RFP submission date. Okay. Thank you so much, sir. Thank you. The next question comes from the line of Aritra Banerjee with Nomura Holdings. Please go ahead. Yeah. Hi, sir. I hope I am audible. Thanks for the opportunity. I have two questions. One is, we have received LRSAM contract worth around INR 92 billion in FY 2019, but still a sizable portion is still unexecuted in our order backlog. Are there any reasons behind this that why it has still not been executed? You are referring to LRSAM? Yes. LRSAM delivery schedule itself was spread over last year, very small quantity, and this year only major of the quantity is for this particular one will be there. As per schedule only we are going. Nothing to worry, nothing delays are there in this program for us. The leftover activity is around INR 3,000+ crore total we have to supply. Out of that majority we will supply this year. Maybe some few hundred crore will go to next financial year. It is as per the delivery schedule only. Nothing worrying thing in LRSAM program as of now we are seeing. Got it. Sir, could you just repeat the quantum that we'll be delivering this year, the amount invested? I'm not exactly giving you the exact value, out of the INR 3,000 crore which is left over right now for LRSAM program, around INR 2,200-INR 2,300 crore, INR 2,100 crore is planned in this year. Okay. Another follow-up question is regarding QRSAM. That will also have a similar execution timeline of seven to eight years in the future? No. The first order is seven, eight years spread because it is having FOPM, then FOPM evaluations, and then only the bulk production will start. Next order, whenever we may get, definitely if it is for the similar quantities, we can supply in three to four years. Okay. Understood. Sir, one last question is regarding even the delays in ordering of NGC, QRSAM, all these programs. Is there any risk of lower than expected revenue growth in FY 2028 at least because of the delays in this ordering? No. Let me tell you, financial year 2028 per se, let us say, these both programs are not constituting in our delivery. These are in our order acquisition target of this year, something will spill over to next year. They are not in my execution plan for next year. In my execution plan is whatsoever order I already have got and some other smaller orders. Many smaller base orders as we told, they keep coming for us. Those orders will have generally 12-18 months type of a delivery schedule. Those orders will keep my next year also. This year and next year is mainly depending on those type of orders. These large platform orders, they will start giving me big turnover after two years, not immediate. Got it, sir. Thanks for answering the questions and all the best for the coming quarters. Thank you. The next question comes from the line of Bhavya Gandhi with Bajaj Finserv Asset Management. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, just wanted to understand, because you guided earlier for 28% EBITDA margin. For the following quarters, we will require closer to 29% EBITDA margin on an average basis. Is that really achievable, sir, going forward for the coming quarters? Definitely, yes. We have variability of 25%-31% EBITDA margins based on the product mix in quarter to quarter, et cetera. At the year-end, let me again assure you, we will cross 28%. Got it. Sir, over the years, you had earlier alluded also that you want to increase the R&D spread to closer to 8%. On a longer-term basis, on a two to three-year basis, this kind of margins is sustainable because R&D expense is currently at 6%. 2% contribution further to R&D expenditure, will it take a hit on the EBITDA margins going forward on a longer-term basis? This is slightly two to three-year basis. No. There only is the real tricks. More you invest in R&D, likely chance of more EBITDA is there. That's fine. You are making this technology, you are developing something, you are doing more indigenization. I don't foresee 6.5 or 6.8 right now to increase to eight will hit on margins. Actually, I feel it may finally make my EBITDA margins more sustainable. Although my product mix may here and there change. These are based on previous experience of ours. In last 50 years, we have seen. We are continuously increasing our R&D expenditure. With R&D expenditure, we have seen the returns are coming in different forms. One is self-sufficiency in technology, and of course, indigenization. More indigenization gives us more EBITDA margins. Perfect, sir. Is it possible to quantify the indigenization figure currently? As such, indigenization figures, I think, indigenous content across platforms is one figure. For major platforms, we give that type of a figure. For company-level indigenization figure, there is no final formula. Turnover 80% indigenous for it. Overall, our turnover, 78% to 80% comes from indigenous products and technologies. Got it. Fair enough. Thank you so much, sir. Really appreciate it. Thank you. The next question comes from the line of Rahul with Macquarie Group. Please go ahead. Yeah. Hi, good evening, sir. I have two questions. Which are the international markets or partnerships, and product segments offer the best opportunity for you to increase your export revenue, and reduce your dependence on the Indian defense budget cycle? Almost all products and technologies which we are right now delivering to our Indian customers, there is a huge demand of that in international market also. The main products where we are seeing are radios. You might have seen that last year we have received a largest order of around INR 2,000 crore worth next generation software-defined radios. SATCOM solutions. D4 type of solutions. We have increased our T/R module type of build-to-print type of a market, for airborne segment, especially. Because there, whatsoever our quality and our infrastructure is there, we are increasing our presence in that type of a high professional grade airborne modules. That also will be at module level and system level, as I told, mainly about communication, our WLR type of a weapon systems. Those type of things, there is a long list. We are very confident that we are going to give you much more better export-related figures than what we are currently having. Sure. Sir. My second question is, you've indicated your plan to increase exports to about 10%. I think you also talked about increasing R&D. I want to know which are the specific areas that you're directing your incremental R&D spend. This will help us understand the direction that BEL is taking. I think you already talked about microwave-based and laser-based weapon system. Any more areas that you could call out where you are looking at spending more incremental R&D? Let me tell you again, because we are in defense electronics domain, each and every area is important for us, because each and every area has some technological upgradation. Like example of AI. The AI is not limited to only army or navy or air force or only to radar or laser systems. AI as a technology is required across all domains. We are spending our R&D also across all domains. Of course, slightly more increase in R&D is on some of the big platforms type of projects for us. Means large equipments like some of the radar, sonar, EW, that type of a program. In a mission mode also, we have taken a few more projects. Overall, I can tell you, we are spending evenly across subsystems, systems, and equipments, and on indigenization drive for subsystem module level. As such, we are spreading all our R&D efforts in all directions, including diversification into civilian domain, like rail, metro, aviation sector. Like that also, we are doing space. Diversifying into these new areas and consolidating our strength in present areas by infusing newer and newer technology. There only this majority of the R&D funds will go. My last question is on your employee cost that you talked about. Now, when it goes for incremental agreement that will be there, this will be valid for how much time period? Typically, what is the last time the hike that was taken? Let's say, you have an INR 3,000 odd crore expense towards employee. I'm just trying to think how much could this be in FY 2027 or 2028. Is it 10% or how does it work? Last time the hike was in January 2017. That was for a 10-year period. the next h ike is in 2027, January 1st. Okay. That is how I told that for the current year- Right For one quarter, the impact will be there. Sure. As far as age is concerned [inaudible] We cannot tell at the same [inaudible] broadly, taking into account certain parameters of what we got last time and what we may get this time, that is how I predict, I had estimated that the employee cost to turnover could remain in the range of 12% in the coming year and coming years also, in the next year also. Because the scale in turnover will be increasing by that time. If the employee cost three months provision is there in the current year, even next year, either provision or full settlement may happen. Overall impact on the employee cost to turnover percentage may not be significant. Sure. Thank you very much, sir, and all the very best. Thank you. The next question comes from the line of Shirom Kapur with Jefferies Group. Please go ahead. Hi, sir. Thanks for the opportunity. Just want to ask about your 15% revenue growth guidance for this year. Given that you've done 20% in the first quarter itself, are we on track for likely beating this 15% revenue growth? Will it be higher? Definitely, as I told last year also, target is 15%. Last month, we may surprise you by maybe half percent, 1%, 1.5%. I don't know how much more we can have, but our balanced plan is 15%, and I am confident we will reach 15%. Quarter to quarter, there are variations from previous year to this year. Generally, they are in all our defense-related projects. As such, we are confident to meet or exceed 15% guidance. Noted, sir. Just secondly, if you could, you mentioned some of these programs that you expected in FY 2027, Shatrughat, Samaghat, and Shakti Phase 4, HAMMER. Could you quantify some of these programs, that how much, what are the potential order sizes for some of these? If you could go a bit deeper into the HAMMER program that you have signed up with Safran, what is that overall market potential there? No, we are only talking about the first order, immediate first order, which we may get in this financial year for these three programs, because subsequently, there will be definitely many more orders for all the three. For Shatrughat and Samaghat, I think I told you around INR 9,000-plus crore. We may get from Shatrughat and Samaghat. About Shakti, it will be around INR 2,000 crore. About HAMMER also, it is around INR 2,500-plus crore. These three orders we are going to get in this financial year itself. Subsequently, repeat orders, there is a good potential for them to have repeat orders. Repeat orders definitely will come after two-plus years only, because this execution itself will take around two years. Beyond that only the repeat order will come, once we supply major quantities of present orders, then only. Understood, sir. Just lastly, given that last time you were expecting around INR 21 billion worth of deliveries in FY 2027, which are some of the other programs that you're expecting to contribute to your FY 2027 revenues, if you could quantify them? Right. Definitely, we have done our planning, recently we have finished our roll on plan meeting also, reaffirming how much for which program we may get. Akash, Army, we are going to generate revenue more than INR 1,000 crore, around INR 1,200 crore. D-29 EW systems, MPR Arudhra, BMPV upgrade, LCA, LRUs. These are around INR 500-INR 1,000 crore, each one of them will give to us. Overall, in this our INR 30,000-plus crore journey, these are the six, seven important projects which will fetch me these type of turnovers. Understood, sir. Thanks. Appreciate your answers. Thank you. The next question comes from the line of Vipul Kumar Shah with Sumangal Investments. Please go ahead. Hi, sir. Thanks for the opportunity. My question is regarding raw material cost, which has shot up very sharply sequentially and over year-over-year also. Of course, it may be due to product mix, but it has increased by almost 8%-10% sequentially and year-over-year. Is that due to any commodity price inflation, or is that any one-off there or product mix, and how do you take any corrective action for that? Your comments will be welcome, sir. Let me again assure you, which was told earlier also, it is mainly because of product mix only. The thing is, traditionally also, because of our product mix, our material cost varied from 50%-58%, 59%. Typically, it was around 55%, but based on the product mix, sometime it drops down by 3%-4%, sometime it increases by 3%-4%. That is the so-called healthy sign for our business of operation. Right now, we are not foreseeing any pressure from this RMC. We have analyzed thoroughly this particular one, and based on the product mix only, the final conclusion was, it was because of product mix. It was not because of some pressure on because of raw material-related consumption or input cost suddenly increase, et cetera. If it will be there, definitely we will share with you the first. Sir, what is our export pipeline, and where do you see our exports two to three years down the line? As I told you, export, we are having great leads right now. Leads to getting the order sometime takes a little bit more time. Presently, I am having around $465 million order book with me. The leads which we are pursuing is at least four to five times more than that. The leads, we may get it, that I can't directly predict. Definitely this year, we have given our internal guidance of around $300 million we should definitely fetch out of the leads which we are having. That is spread across, again, some 15-20 important products. We are confident to slowly and slowly increase our presence in export market because as you also remember, and I told earlier, we want to finally aim at 10% of our revenues through export. We are working systematically to see that we reach that goal in next to five years. Sir, one small suggestion, if you can put a presentation with every result where you can form in a tabular fashion, the platform wise execution for each year for at least two years, it will be very helpful for investors and analysts to understand the company. This is a suggestion, if that is practically possible or not, you please think over. Thank you very much and all the best, sir. Thank you for your suggestion. Definitely, much more detailed things comes in our annual report, which is really comprehensive, where we take care of everything. Every quarter, whether we can give that type of a thing, we will see, and we will see SEBI guidelines and other things also. Definitely right now we are complying to whatsoever guidelines as per company act and SEBI are there. Your suggestion is welcome. We will explore that. That other than annual report, can we publish this type of data in the form of some presentation? We will look into your suggestion, certainly. Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks. Yeah. My closing remarks again is same as my starting remarks of the thing that the Q1 was good, met our internal expectations. Whatever we had planned, we have more or less executed all of that. The future outlook remains the same. The revenue growth of 15%, EBITDA margin 28%, order inflow of more than INR 55,000 crore, including QRSAM. The R&D investments more than INR 2,200 crore. CapEx more than INR 1,200 crore with a typical defense, non-defense business of 90:10. These guidance, definitely we are working towards, and I am confident we will achieve this guidance for this financial year. This is my closing remark for this quarter. Thank you, sir. Ladies and gentlemen, on behalf of Motilal Oswal Financial Services, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.