New Delhi/ Bengaluru: Dinesh Kumar Batra, CMD, Director (Finance) & CFO of Bharat Electronics Limited is superannuating on Monday, October 31, 2022, after an illustrious career. The outgoing CMD has been a change agent for BEL. His most noteworthy contributions to the Company include an increase in the wealth of shareholders, steering BEL to become the first Defence PSU to cross the landmark market capitalisation figure of Rs.80,000 Crores (from Rs.24,000 Crores at the time of his taking over as CFO) and declaring the highest ever dividend of 450%. He steered the Board, Administrative Ministry and Shareholders' approval to increase the authorised capital three-fold to Rs.750 Cr and issue of bonus shares in the ratio of 2:1.
Under Batra's leadership, BEL achieved its highest-ever turnover of Rs.15,044 Crores in FY 2022, a growth of 9% over the previous year, despite challenges posed by the pandemic, global semiconductor shortage and stiff competition. This has instilled confidence among stakeholders, resulting in the highest PE ratio of 29 of BEL's share price among all manufacturing PSUs.
CMD BEL Dinesh Kumar Batra spoke to the Editor of Defence Watch Vivek Shukla in detail about the company's strengths and upcoming plans. Here are the excerpts:
DW: You have a strong connection with the employees I have seen. What is your Mantra behind the success of the Defence PSU BEL?
CMD Batra: We have two Mantras in fact. One, I always tell fellow employees, 'do what you say'. Which simply translates into doing what you promised or said. and second is for our armed forces. We reassure them by saying "Dharti ho ya akash, veer jawanon ke sath khade hum hardum". BEL, as an organisation is committed to the smooth transaction of their duties towards the motherland no matter what the challenges are, or what the landscape is. So whatever growth and commitment you see is coming out of these mantras only.
DW: BEL has shown stellar growth in the past few years. Can you share the key contributors?
CMD Batra: The growth in turnover during FY22 was mainly on account of the timely execution of the existing order book as well as new products introduced in the current FY. The major orders executed during FY22 were Long Range Surface-to-Air Missile (LRSAM), Air Defence Weapon System, Integrated Air Command and Control System, AFNET, Coastal Surveillance System Phase II, Integrated Perimeter Security Solution, Smart City projects, Oxygen Concentrators and Ventilators. New products introduced include Laser Fence System, IR Jammer for Active Tank Protection System, Solid State Power Controller Cards for Akash NG/QRSAM, S-Band 150 W Power Amplifier, GNSS Receiver and IP EPABX System. As far as profitability growth in the current year is concerned, the increase in turnover as compared to the previous year was to the tune of more than Rs. 1,200 Cr, which has brought in economies of scale and a corresponding increase in profit.
DW: What is your turnover projection for FY 2022-23. How is the order inflow this year?
CMD Batra: We are midway into meeting our targets for this financial year and I am confident that we will achieve around 15% growth in our turnover and an increase in EBIDTA (as a % of turnover) ) from the present 22% to 23% by the end of March 2023. BEL's order book as on April 1, 2022, stood at Rs. 57,000 Cr. This year, we are expecting around 15,000-20,000 crores worth of orders.
DW: What is the growth potential from export markets? How are you planning to expand your presence abroad?
CMD Batra: We are seeing a very good opportunity in Exports. Our present export order book is more than USD 265 Million. During the current FY, as part of its Offset commitments, under the prestigious C295 aircraft programme, Airbus Defence and Space has signed a contract with BEL for the manufacture and supply of the Radar Warning Receiver and Missile Approach Warning System. To enhance its geostrategic reach, BEL has strategically opened overseas marketing offices in the Indian Ocean Region, South East Asia, Middle East Region and the USA. BEL has six overseas marketing offices in Vietnam, Myanmar, Sri Lanka, Oman, Singapore and New York, and is planning to further expand its global footprints.
DW: What are the initiatives you have taken to diversify into the civilian business?
CMD Batra: Defence, being the mainstay of BEL, has traditionally been contributing to around 80% on average of the Company's annual sales revenue. BEL, however, has been continuously exploring diversification into allied Defence and non-defence areas. The total opportunity available in the non-defence business segment, being pursued by BEL in the next 8-10 years, is more than Rs. 2 Lakh Crores. The Company aims to increase its non-defence share in the overall business in the coming years.
Some of the areas BEL is focussing on in non-defence include solutions for Civil Aviation sector including Air Traffic Controller Radars, Anti Drone systems, Space /
Satellite Electronics, Space Launch Vehicles, Satellite Communication Services, Spacegrade Solar Cells, Satellite Assembly & Integration, Solar Business, Railway and Metro solutions, Software as a Service, Network & Cyber Security, Energy Storage products for Electric Vehicles (Li-ion & Fuel Cells, Charging Stations, etc), Homeland Security & Smart City businesses, Smart Meters, a range of Medical Electronic and health care solutions. There is a wide bouquet of businesses in non-defence that would play a key role in driving BEL's growth in the coming years.
DW: How is your order book position? Tell us about the key orders executed during FY 2020-21 and major orders for this financial year from Defence and Non-Defence space.
CMD Batra: BEL's overall order book stands at Rs.57,636 Crores as on January 31, 2022. The major projects executed in FY 2020-21 were LRSAM, Air Defence Weapon System, CDR TI for BMP & T72, Land-based EW System Upgrade, AFNET, Ventilators, Homeland Security, Smart City projects, Coastal Surveillance System, K-FON, SDR (NC), EOIR, CCTV, Avionics for Light Combat Aircraft, Electronic Fuzes, NAISS and Low-Level Transportable Radar.
BEL has acquired orders worth about Rs. 14,000 Crores in FY 2021-22. Major Orders received include AFNET Performance & Security Enhancement and SATCOM Network, Ventilators (including service), Naval Fire Control System, Software Defined Radio, Advance Torpedo Defence Systems, Digital Mobile Radio Relay, etc.
DW: Thank you so much for speaking to us. PSU Watch and Defence Watch wishes you a great future ahead.
CMD Batra: Thank you!