Post on 12-Aug-2020
Shri. G. Mohan Kumar
Secretary - Defence Production
Hearty Welcome to
Defence Electronics -
Bharat Electronics Limited
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2
Disclaimer
THIS PRESENTATION (PRESENTATION) IS NOT AN OFFER TO SELL ANY SECURITIES OR A SOLICITATION TO BUY ANY SECURITIES OF BHARAT ELECTRONICS LIMITED (THE
“COMPANY”).
The material that follows is a Presentation of general background information about the Company’s activities as at the date of the Presentation. It is information given in summary form and
does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation does not constitute a prospectus, offering circular or offering
memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase
any of the Company’s equity shares.
This Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking
terminology, including the terms “believes”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “may”, “will”, “seeks” or “should” or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical
facts. They appear in a number of places throughout this Presentation and include statements regarding the Company’s intentions, beliefs or current expectations concerning, amongst other
things, its results or operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-
looking statements are not guarantees of future performance including those relating to general business plans and strategy of the Company, its future outlook and growth prospects, and
future developments in its businesses and its competitive and regulatory environment. No representation, warranty or undertaking, express or implied, is made or assurance given that such
statements, views, projections or forecasts, if any, are correct or that the objectives of the Company will be achieved. The Company’s actual results of operations, financial condition and
liquidity, and the development of the business sector in which the Company operates, may differ materially from those suggested by the forward-looking statements contained in this
Presentation. In addition, even if the Company’s results of operations, financial condition and liquidity, and the development of the industry in which the Company operates, are consistent with
the forward-looking statements contained in this Presentation, those results or developments may not be indicative of results or developments in subsequent periods.
The Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness
or correctness of any information or opinions contained herein. The information contained in this Presentation, unless otherwise specified is only current as of the date of this Presentation. The
Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise.
Unless otherwise stated in this Presentation, the information contained herein is based on management information and estimates. The information contained herein is subject to change
without notice and past performance is not indicative of future results.
This document is a Presentation and is not intended to be a “prospectus” or “offer document” (as defined or referred to, as the case may be, under the Companies Act, 2013). It is clarified that
this Presentation is not intended to be a document offering for subscription or sale of any securities or inviting offers from the Indian public (including any section thereof) or from persons
residing in any other jurisdiction including the United States and Japan for the subscription to or sale of any securities including the Company’s equity shares. No part of it should form the
basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of the Company’s securities may be
offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”)except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state of the United States. The Company’s securities have not been
and will not be registered under the Securities Act.
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Table of Contents
1. Defence Manufacturing-Scenario
2. Company Overview
3. Future Scenario
4. Financial Profile
5. Half Yearly Performance
6. Achievements
3
Defence Manufacturing-Scenario
Modernisation and upgrade plans of Indian Defence Forces coupled with the
Government’s commitment to support these plans.
Majority of the defence requirements of Indian Industry met by Imports.
High technology expertise, a lot of patience, perseverance and good financial
strength required for Industry players to stay in business.
Continuous review and up-dation of DPP and offset policy, encouraging private
participation and foreign investments in the country.
5
Defence Manufacturing-Scenario
49% FDI under Automatic route and beyond on case to basis subject to flow of
state of the art technologies with the approval of FIPB.
Strategic Partnership Model to develop Large SI’s in the Private sector
More thrust on “Buy Indian”, “Buy & Make - Indian” and “Make” Programs.
Make in India” initiative to encourage indigenous manufacture.
Strategic partnerships and collaborations with friendly countries in defence
production, technology transfers and exports.
6
BEL – Over View
(1) * NSE as of November 21, 2016
(2) ** Based on standalone audited financial statement for FY ended March 31, 2016.
(3) USD/INR -66.175
“Navratna” Company having market leadership in Defence Electronics space with strong focus on R&D
Note: All financials are as per company filings with the stock exchanges
1. Bharat Electronics Limited (BEL) was established at Bangalore, India, by the Government
of India under the Ministry of Defence in 1954 to meet the specialized electronic needs of
the Indian defence services
2. In June 2007, BEL was conferred the prestigious Navratna status based on its consistent
performance
3. BEL has strong relationships with defence and government agencies
Robust
manufacturing
capability
1. Multi-product, multi-technology, multi-unit company servicing the needs of customers in
diverse fields in India and abroad
2. Bharat Electronics has nine manufacturing plants which are located closer to the
ordinance factories, the key clients of BEL.
3. High capacity utilization and excellent execution track record
Market
Leader
1. Market leader in the defence electronics space
2. Manpower: 9848 employees
Focus on R&D
1. In-house R&D capabilities (R&D spend at 9 % of FY 2015 revenues) with 2,528 employees
in the R&D division
2. BEL has built an indigenous manufacturing capability on the back of its strong focus on
R&D
Strong JV
Partnerships &
Collaborations
1. BEL Optronics Devices Limited for Night Vision Image Intensifier tubes
2. GE BE Private Limited for Medical Electronics Parts, X-Ray Tubes
3. BEL Thales Systems Limited for Civil ATM and select Defence Radars
Rich
Heritage
Robust
Financial
Performance
1. Market Capitalization –USD 4314 Million * (After Buyback of Shares)
2. FY1 5-16 Gross Turnover – USD 1137 Million , Profit After Tax – USD 205 Million**
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3
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2
3
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2
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2
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2
3
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Key milestones achieved by the Company
More than 60 years of experience in the Defence Electronics space
1954 - BEL
established
at Bangalore
1961 - Receiving
Valves
1966 -
Radar
manufactur-
ing for
Army & In-
house R&D
1968 - Printed
Control Board (PCB)
manufacturing
1970 - Black &
White TV Picture
Tube, X-ray Tube
and Microwave
Tubes
1974 – 2nd
unit at
Ghaziabad
- Radars
and Tropo
comm.
equipment
1979 – 3rd unit at
Pune - Laser
Products,Batteries,
X- ray Systems
1980 –
1st
overseas
office at
New
York
1982 -
Space
Electronic
Division at
Bangalore
1983 –
Takeover of
Andhra
Scientific
Company as
the 4th unit at
Machilipatnam
1985 -
5th unit at
Chennai &
6th unit at
Panchkula
1986 – 7th unit
at Kotdwara,
8th unit at
Taloja (Navi
Mumbai) & 9th
unit at
Hyderabad
1987 -
Naval
Equipment
unit at
Bangalore
1988 - 1st
Central
Research
Laboratory
1989 -
Telecom
switching and
transmission
systems,
Electronic
Voting
Machine
1990 –1st
JV with M/s
Delft of
Holland
1992 – 1st
Disinvestment
(20%) & listing
on Bangalore
and Bombay
Stock
Exchanges;
2nd Research
Laboratory at
Ghaziabad
1994 – 2nd
Disinvest-
ment (4.14%)
1997 –
JV with
M/s GE
USA
1998 – 2nd
overseas
office at
Singapore
2002 - Mini
Ratna
Status
(category I)
2007 -
Navratna
Status
2000 –
1. Bangalore
Unit divided
into various
Strategic
Business
Units(SBUs)
2. Shares
listed on
NSE
2014 -
JV with
Thales
,France
2015- Bonus Issue
2016 -
Buy Back
of Shares
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JVs / Subsidiaries and collaboration with Global Majors
• Set up in 1997 as a joint venture between Bharat Electronics
Limited (26%) and General Electric Medical Systems (74%)
• The facility based at Whitefield, Bangalore, manufactures CT
Max and other state-of-the-art X-Ray Tubes.
• GE-BE Pvt Ltd achieved a turnover of USD 120 Million in the
year 2015-16 as against USD 110 Million in 2014-15
X Ray Tubes
BEL-Thales Systems Limited Technology Tie-ups / MOUs with foreign OEMs
GE-BE Private Limited BEL Optronic Devices Limited
High Voltage Tanks
• 100% subsidiary of BEL established in 1990 for conducting
research, development and manufacture of Image Intensifier
Tubes and associated high voltage Power Supply Units for use
in military, security and commercial systems
• The company is located in Bhosari Industrial Area, Pune
• Company achieved turnover of USD 16 Million and has made a
profit after tax of USD .30 Million in FY 2015-16.
• Order Book of BEL Optronic devices as on 01.04.2016 is USD 4
Million.
• Joint Venture Company (JVC) between Bharat Electronics
Limited (74%) and Thales (26%) established in 2014 for
designing, development, marketing, supply and support of
civilian and select defence radars for Indian and global markets
• Company located in Bangalore
• The company was incorporated on August 28, 2014
• During the second year of Operation, the company incurred a
loss of USD .30 Million.
Company Products
Sextant Avionics LCD systems for MiG 21
Sagem Systems Production and supply of navigational
sensors, inertial navigation system
Textron Systems MicroObserver Unattended Ground Sensor
System
General Electric
Company
Manufacture and supply of X-ray tubes
Israel Aerospace
Industries
Long range Surface to Air Missile
JVs and collaborations with major international players such as Thales, GE, Israel Aerospace Industries etc.
10
BEL – Key Business Segments
Multi-product, multi-technology, multi-unit company servicing the needs of diverse customers
Radar &
Weapon
systems
Communica-
tion
Electronic
Warfare
Network
Centric
Systems
Naval
Systems
Electro-
Optics
Tank
Electronics
Civilian
Products
• Electronic Voting
Machines,
Mobile Tablet
PCs, Solar
Traffic
management
systems etc.
• Gunners main
sight, digital
intercom
systems, tank
intercom
systems, L70
gun upgradation,
Schilka upgrade
• Laser range
finders,
night vision
devices,
weapon
systems
• Radar warning
systems, missile
warning
systems,
integrated
electronic
warfare suites,
convoy
jammers, etc.
• Surveillance
Radars, fire
control radars,
weapon locating
radars,
secondary
surveillance
radars ,missile
systems.
• HF Receivers /
Transmitters,
VHF Radio, UHF
Radio,
Encryption
products, radio
relays, data
communication,
strategic
communication
systems etc.
• Artillery Combat
Command
Control
Systems,
Battlefield
Surveillance
systems, coastal
surveillance
systems
• Short range/
medium / long
range Fire
Control
Systems, Anti
submarine
warfare
systems, fire
control systems
modules
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Robust manufacturing capability
Ghaziabad - 1974
• Radar
• Network Centric Systems
• Satcom & Cellular
Communication
Panchkula - 1985
• Tactical Communication
Equipment
• Portable Radar
Kotdwara - 1986
• Defence Communication
Equipment
• Telecom Products
Navi Mumbai - 1986
• Shelters, Masts
Pune - 1979
• Batteries
• Electro-Optics
• Laser Products
Bengaluru - 1954
• Military Communication
• Missile Systems
• Electronic Warfare and Avionics
• Radar
• Naval Systems
• Network Centric Systems
• Export Manufacturing
• Components
• Homeland Security
Chennai - 1985
• Tank Electronics
• Land Navigation
Systems
• Fire Control Systems
• Gun Upgrades
Machilipatnam - 1983
• Electro Optic
Equipment
Hyderabad - 1986
• Electronic Warefare
Equipment
Regional offices
• New Delhi
• Mumbai
• Kolkata
• Visakhapatnam
Marketing offices
• Bengaluru
• New Delhi
Overseas offices
• New York
• Singapore
Key Subsidiaries &JVs
• BEL Optronics Devices Ltd
− Manufactures Night vision image
intensifier tubes
• GE – BE Pvt. Ltd
− Manufactures CT Max and state of
the art X-ray tubes, High Voltage
Tanks and Detectors
• BEL-THALES Systems Limited
− Design, development & supply of
civilian and select Defence Radars
for Indian and global markets
Robust Manufacturing capabilities with 9 manufacturing bases spread across India
# Map not to scale
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Key Investment Highlights
Robust Manufacturing
capability with capex
planned for capability
enhancement
Market leader with
diverse customer base
Robust Order Book
Position High R&D focus
Increase in Capital
Defence Spending with
focus on “Make in India”
JVs / Subsidiaries and
collaboration with Global
Majors
Focus on integration /
turnkey projects and
exports
Experienced
Management &
Government of India
Parentage
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2
3 4 5
6
7 8
13
Research & Development
• 50% Engg. Manpower deployed at 30 R&D Centers
• 86% Sales Revenue from Indigenous R&D
• R&D investment : 9% of Turnover
• CMMi Level 5 Certification for Software development
• 3 Tier R&D Structure
Blue Sky Research (Futuristic Technologies) (SDR, Networking, Wireless, Signal Processing, Cognitive
Radios & Radars, C4I Software, Sensor Data Fusion,
Networking Waveforms)
Central Research Labs
(2 Groups)
Core Design Groups
(8 Groups)
Core technology development for running projects (Defence Software, Encryption, RF, Microwave,
Radar Signal Processing, Power Supply, Control Electronics)
Products & Systems development Development & Engg Groups at each Unit
(20 Groups)
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• USD 76 Million annual CAPEX
• World class Manufacturing & Test facilities
• Test set up for Missile System
• Antenna Test Range Facility
• Modern Production setup for Airborne
applications
• Environmental Test facilities
• Product Development & Innovation
Centre
• Opto Electronic Manufacturing facility
Expansion & Modernization
15
Exports
• Dedicated Business Unit & Marketing
Group for Exports
• Achieved USD 85 Million during 15-16
• Export Initiatives:
• Strategic alliances with global OEMs
(Elbit, IAI, Thales, SAAB) for joint
development / co-production
• Focus on SE Asian Countries for
Comn, Sonars and Coastal Security
solutions
• Major products exported:
• Ship Comn Systems, EW , EO Fire
Control System, Radar Finger
Printing System, IFF, Hull mounted
Sonar, Radar Warning Receiver,
EVMs
• Major countries:
• USA, UK, Russia, Italy, Myanmar,
Brazil, Germany, France, Israel,
Indonesia, Honduras, Malaysia,
Maldives, Mauritius, Namibia,
Seychelles, South Africa 16
Major Orders Executed in 2015-16
• Akash Weapon System (Army & Air Force)
• 3D Tactical Control Radar to Army
• Schilka Upgrade to Army
• Passive Night Vision Devices to Army
• Low Level Light Weight Radar to Air Force
• Fire Control System to Navy
• Integrated Sonar Suite to Navy
• Ship Data Network to Navy
• New Generation Sonars to Navy
• L Band Surveillance Radar for Export (Myanmar)
17
Future Scenario
Future Outlook
• BEL to continue indigenisation efforts in keeping with ‘Make in India’
initiative
• Radars, Missile Systems, Communication & Network Centric Systems,
Tank Electronics, Gun Upgrades, Electro-Optic Systems and Electronic
Warfare & Avionics Systems to drive BEL’s growth
• Capacity enhancement and creation of new test facilities for Defence
business
• Company pursuing business opportunities in Solar Energy, Homeland
Security, Smart Cards and Telecom
• Strategies and action plans to face competition, maintain technological
edge and retain leadership position in strategic electronics
19
FINANCIAL PROFILE
2011-12 2012-13 2013-14 2014-15 2015-16
38 33
42
58
85
EXPORT TURNOVER (USD Million)
2011-12 2012-13 2013-14 2014-15 2015-16
862 909 933 1,012
1,137
GROSS TURNOVER (USD Million)
2011-12 2012-13 2013-14 2014-15 2015-16
125 134 141176
205
PROFIT AFTER TAX (USD Million) (USD Million)
2011-12 2012-13 2013-14 2014-15 2015-16
162 168 178
222273
PROFIT BEFORE TAX (PBT)
21
63.93% 65.19%
59.00%
56.43%
54.82%
2011 - 12 2012 - 13 2013 - 14 2014 - 15 2015 - 16
MATERIAL CONSUMPTION TO VOP (DPE) (in %)
163 168 156 191 197
18.95%
18.48%
16.68%
18.88%
17.31%
16.00%
16.50%
17.00%
17.50%
18.00%
18.50%
19.00%
19.50%
-
150
2011-12 2012-13 2013-14 2014-15 2015-16
Employee Benefits Expense(US$ Millions) % to Turnover
10791 10305 9952 9703 9948No. of Employees
(USD Million) EMPLOYEE BENEFITS EXPENSE TO TURNOVER
22
VoP (DPE) = Net turnover – Changes in Inventories of FG, WIP
TRADE RECEIVABLE TO TURNOVER
422
494 509 518
637
178191
202188
208
0
50
100
150
200
250
300
0
100
200
300
400
500
600
2011-12 2012-13 2013-14 2014-15 2015-16
Inventory Inventory in No. of days to VOP (DPE)
(USD Million)
406
504
624
572 561
172
202
244
206
180
150
200
250
300
0
2011-12 2012-13 2013-14 2014-15 2015-16
Trade Receivables Trade Receivables in No. of days to Turnover
(USD Million)
INVENTORY TO VOP (DPE)
23
Return on Capital Employed = PAT / Capital Employed
Return on Equity = Profit After Tax / Net Worth
10.71% 10.58%
14.44%
17.09% 19.28%
2011-12 2012-13 2013-14 2014-15 2015-16
EBITDA to Turnover (in %)
15.66%
14.78%
13.85%
15.19%
17.00%
2011-12 2012-13 2013-14 2014-15 2015-16
Return on Capital employed (in %)
14.76%
14.12%
13.28%
14.80%
15.55%
2011-12 2012-13 2013-14 2014-15 2015-16
RETURN ON EQUITY (ROE) (in %)
24
Cash Earning Per Share = (PAT + Depreciation) / No. of
Shares
Note: Excludes Dividend Tax
EPS normalised for the previous periods due to issue of Bonus
Shares
0.52 0.56 0.59
0.73
0.85
2011-12 2012-13 2013-14 2014-15 2015-16
EARNING PER SHARE (EPS) (in USD)
0.60 0.64 0.68
0.83
0.96
2011-12 2012-13 2013-14 2014-15 2015-16
CASH EARNING PER SHARE (in USD)
(USD Million)
25 27 2835
62
2011-12 2012-13 2013-14 2014-15 2015-16
TOTAL DIVIDEND PAID
25
66
77
71
83
106
7.71%
8.94%
7.77%
8.89%
10.52%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
-10
10
30
50
70
90
110
2011-12 2012-13 2013-14 2014-15 2015-16
R&D Expenses R&D Expenses to Turnover (%)
R & D EXPENSES TO TURNOVER (USD Million)
(USD Million)
2011-12 2012-13 2013-14 2014-15 2015-16
3543
6258
79CAPITAL EXPENDTURE/INVESTMENT
26
Figure inside the bar is the Market Price, which is the average of closing prices on NSE for each year
2016-17 is based on the closing rate of NSE as on 21.11.2016 (After Buyback of Shares)
(In % )
15.31
11.41 9.59
15.80
20.44
2011-12 2012-13 2013-14 2014-15 2015-16
PRICE EARNING RATIO
Book value normalised for the previous periods due to issue of Bonus Shares
850 953 1,060 1,192 1,320
3.54 3.97
4.42
4.96
5.50
2011-12 2012-13 2013-14 2014-15 2015-16Net Worth Book Value (in US$)
BOOK VALUE PER SHARE (USD Million)
19201535 1350
2788
41934314
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
MARKET CAPITALISATION (USD Million)
24.01 19.18 16.87 34.85 17.47 19.31
27
Shareholding Pattern as on 4th November, 2016 GOI, 74.41%
FINANCIAL INSTITUTIONS
, 0.03%
MUTUAL FUNDS, 9.03%
FIIs, 4.22%INSURANCE COMPANIES,
0.61%CORPORATE
BODIES, 2.66%
NRIs, 0.16%
OTHERS, 8.88%
28
HALF YEARLY PERFORMANCE
Financial Highlights upto 2nd Quarter 2016-17 (Ind-AS Compliant) (USD in Million)
Particulars 2016-17
(Unaudited)
2015-16
(Unaudited)
Total Income from Operation (Gross) 411 405
Net Profit for the period before tax 78 56
Net Profit for the period after tax 58 43
Earning Per Share (EPS in USD )
(Previous year normalised for Issue of Bonus Shares) .24 .18
30
ACHIEVEMENTS
Major achievements in recent past
Induction of Akash Missile System to Indian Air Force and Indian Army
Akash is a great success story of the ‘Made in India’ initiative and
BEL is proud to be a part of it
32
Major achievements in recent past
Established Integrated Test Bed Facility for
Missile and Weapons Systems Integration
33
Major achievements in recent past
Foundation stone laid for Defence Systems Integration Complex
34
Major achievements in recent past
Partnership agreement signed between Thales and BEL Thales Systems Limited
for joint development of PHAROS Fire Control Radar
35
Major achievements in recent past
Raksha Mantri’s Awards for Excellence for the years
2012-13 and 2013-14 in various categories
36