Bharat Electronics May-24

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Questions and Answers

What is the primary purpose of the letter addressed to the Manager?

To report financial earnings

To request additional funding

To invite investors to a conference

To provide a transcript of a conference call (correct)

On what date was the conference call with investors held?

25.05.2024

24.05.2024

22.05.2024 (correct)

20.05.2024

What is the registered office location of Bharat Electronics Limited?

Dalai Street, Mumbai

Outer Ring Road, Hyderabad

Nagavara, Bangalore (correct)

P J Towers, Delhi

Which government entity is Bharat Electronics Limited associated with?

Ministry of Defence Signup and view all the answers

What is the CIN number for Bharat Electronics Limited?

L32309KA1954GOI000787 Signup and view all the answers

What is the fax number provided in the letter?

+91 (80) 25039266 Signup and view all the answers

What is the email address listed for contacting Bharat Electronics?

<a href="mailto:[email protected]">[email protected]</a> Signup and view all the answers

Which of the following does NOT appear in the letter?

Stock price performance Signup and view all the answers

What was the increased Profit After Tax (PAT) for the year?

INR4,020 crores Signup and view all the answers

What was the reported earnings per share for the previous year?

INR4.11 Signup and view all the answers

What was the highest ever order book amount mentioned?

INR35,000 crores Signup and view all the answers

What external event was mentioned as having an impact on turnover?

Hamas war Signup and view all the answers

What growth percentage was initially guided for turnover?

15% to 17% Signup and view all the answers

What order acquisition is expected for the financial year 2024-2025?

INR25,000 crores Signup and view all the answers

Which quarter was severely impacted by external events?

Q2 Signup and view all the answers

What was the expected EBITDA range provided earlier?

21% to 23% Signup and view all the answers

What was the reported other expenses in Q4 according to the discussion?

INR1,200 crores Signup and view all the answers

How much provisioning was linked to the Integrated Air Command and Control System project?

INR220 crores Signup and view all the answers

Which factors contributed to the need for provisioning for the Integrated Air Command and Control System project?

Delay due to customer dependencies and scope modification Signup and view all the answers

What is the purpose of the Board of officers formed by the airport?

To review dependencies and recommend findings Signup and view all the answers

What does Bhanu Srivastava express confidence in regarding the Integrated Air Command and Control System project?

Obtaining necessary approvals from authorities Signup and view all the answers

If the provisioning amount is excluded, what would the other expenses approximate to in Q4?

INR950 crores Signup and view all the answers

What overarching issue is highlighted concerning the Integrated Air Command and Control System project?

Significant dependency on customer approvals Signup and view all the answers

What kind of project complications does Bhanu mention regarding the Integrated Air Command and Control System?

Complex dependencies and scope modifications Signup and view all the answers

What is the main purpose of the 175 acres of land committed near the defense corridor in Agra?

To establish a MRO facility for missile systems Signup and view all the answers

What is the estimated annual investment for building new capacity and upgrading existing facilities?

INR 600 crores to INR 700 crores Signup and view all the answers

Which facility is being upgraded to meet the latest technological requirements?

Super component facility in Ghaziabad Signup and view all the answers

What kind of orders is the Indian Navy finalizing related to BEL's supplies?

Submarines and next-generation corvettes Signup and view all the answers

What is the approximate total cost stated for the civil and electronic equipment supply in the project?

INR 8,000 crores Signup and view all the answers

What types of systems is BEL planning to supply for next-generation corvettes?

Sonar systems and combat management systems Signup and view all the answers

How many nodes are completed for the underground section as mentioned?

Two nodes Signup and view all the answers

Which of the following equipment is NOT mentioned as part of BEL's supplies for the Indian Navy?

Fighter jet systems Signup and view all the answers

How many types of equipment is BEL supplying for the P15B and P17 alpha?

10 to 12 types of equipment Signup and view all the answers

What share of the total project cost is dedicated to electronic equipment supply?

INR 3,000 crores Signup and view all the answers

What is the status of the overground nodes as discussed?

Some are functional, others pending Signup and view all the answers

What is one of the systems BEL is supplying for combat helicopters?

EW systems Signup and view all the answers

How much has been provided for the IACCS project in total as discussed?

INR 400 crores Signup and view all the answers

What is the risk associated with the profit margin for the IACCS project?

Further provisioning may be needed Signup and view all the answers

What is the significance of the INR 230 crores mentioned by Bhanu Srivastava?

It is the provision for the IACCS project this year Signup and view all the answers

What aspect of the IACCS project is highlighted as having a high component?

Civil construction Signup and view all the answers

What is the main focus of the P-75(I) submarine program?

Enhancing indigenous manufacturing capabilities Signup and view all the answers

Which two Indian shipyards are mentioned as involved in the P-75 additional submarine?

L&T and MDL Signup and view all the answers

What percentage of contract value has been typically received as derivative orders from larger projects?

20% to 25% Signup and view all the answers

What might the anticipated percentage of localization opportunities rise to in the future?

30% to 35% Signup and view all the answers

What kind of systems are included in the submarine equipment mentioned for P-75(I)?

Sonar and communication systems Signup and view all the answers

What is being negotiated in relation to indigenization efforts for the P-75(I) program?

The extent of indigenous content with foreign OEMs Signup and view all the answers

What is the pipeline budget for radar and avionics for FY '26 mentioned?

INR 22,000 crores to INR 25,000 crores Signup and view all the answers

What is the primary goal of the Government of India's Aatma Nirbhar policy as mentioned?

To increase self-reliance through indigenous manufacturing Signup and view all the answers

Study Notes

Bharat Electronics Limited Q4 FY'24 Earnings Conference Call

Date: May 22, 2024
Management: Bhanu Prakash Srivastava (Chairman & Managing Director), Damodar Bhattad (Director Finance & CFO), Sreenivas S (Company Secretary)
Moderator: Amit Dixit (ICICI Securities)
Key Financial Highlights (FY24):
- Turnover increased to INR19,819.93 crores (up 14.35% YoY from INR17,333 crores)
- Profit Before Tax (PBT) increased to INR5,335 crores (up 33.87% YoY)
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to INR5,290 crores, a gain of 25.22% compared to previous year's figure of INR4,260 crores
- Profit after tax (PAT) increased to INR4,020 crores (up 33.68% YoY).
- Earnings per share (EPS) has been INR5.5 compared to previous year's INR4.11.
- Highest ever order-book (as on April 1, 2024) INR75,934 crores.

Conference Call Discussion Points

Order Intake (FY25): Estimated order acquisition in the range of INR25,000 crores.
Export Targets:
- $110 Million target this financial year
- Significant export order book of $400 million, with an expectation for another $200M+.
Import Content:
- Target reduction in import content for fiscal 2025 – 2026 is dependent on product type and mix
- Significant indigenous components/products
Gross Margin: 45% (Q4 FY24), sustainable trajectory; 23-25% EBITDA expected in FY25. Non-defense mix will remain approximately 15% of the total revenue
Provisioning: Provisions made in line with contractual conditions, - Some may reverse in the future. Some higher provision happened in Q4 2024.
Expansion:
- New facilities, including one for night-vision, and another for EW systems in Telangana and Andhra Pradesh (near Huderabad)
- Further expansion in Agra for missile systems and maintenance.
- The strategy is to build sufficient capacity for future demands
QRSAM: Significant contract, but delivery and financial impact are expected to take place in 2025-2026.
Employee Costs: Employee costs are expected to stay around 12%.
Major Contracts:
Indian Navy: Contracts expected for submarines and corvettes include sonar, communications, ship data networks, combat management systems, EW systems, radars, and SAMs.
India Air Force: Payloads for combat helicopters and utility helicopters.

Other

The conference call was recorded and the transcript is available on the company website, www.bel-india.in.

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