Bharat Electronics Limited : Company Review

BEL

Bharat Electronics Limited (BEL) is a multi-product company manufacturing a range of products in the areas of

radars,
sonars and naval systems;
communication equipments and systems;
electronic warfare and avionics systems;
command and control systems;
electro-optic devices and related systems;
tank and weapon electronics;
components, such as discrete electronic and microwave;
upgrades of equipments and systems,
and shelters.

These equipments are supplied to a range of customers, including the Army, Navy, Air Force, Paramilitary forces, Indian Meteorological Department and others.

During the fiscal year ended March 31, 2008 (fiscal 2008), 20 new products were introduced and supplied. The products include Central Acquisition Radar (CAR), Doppler Weather Radar (DWR), Artillery Combat Command & Control System, Optronic Pedestal, Briefcase Satcom Terminal, Combat Management System, Internet Protocol (IP) Encryptor, Project Prateeksha, Optical Tracking System and Space Grade Components.

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Bangalore, Aug. 24 Bharat Electronics Ltd expects to invest Rs 1,000-1,500 crore in joint ventures to create critical technologies for national security over the next three years. It is pursuing three-four joint ventures with multinational and domestic companies, BEL’s Chairman and Managing Director, Mr Ashwani Kumar Datt, told Business Line.

The defence public sector company has been in talks for technology tie-ups with Israel’s Rafael Advanced Defense Systems Ltd and Elbit Systems (NASDAQ:ESLT) Electro-optics (El-Op), Europe’s Selex Galileo and Thales, Boeing (NYSE:BA) and the Hyderabad-based Astra Microwave.

Out of the dozen possibilities under consideration, “Our target is that at least one should get decided by March 2010; and a few more during 2010-11,” said Mr Datt, who took charge of the Rs 4,600-crore company in May. “We may not need more than three or four joint ventures.”

BEL develops futuristic products for the Armed Forces that contribute 80 per cent of its revenues. Mr Datt said it had short-listed thermal imagers, ATM radars, air-borne electronic warfare systems, missile electronics and guidance systems as priority technologies to acquire through tie-ups or special arrangements.

“Over two-three years we should be investing Rs 1,000-1,500 crore for these.” Last year, it roped Bharat Dynamics Ltd and Tata Power Co into a consortium to make the Akash surface-to-air missiles on the IAF’s Rs 1,200-crore order. It has similar arrangements with ECIL and HAL and a Rs 2,500-crore solar cells venture plan with fellow PSU BHEL.
NIGHT VISION TECH

Acquisition of night-vision technologies, now available with very few countries, he said, was a priority, for which BEL was talking with Elbit El-Op and Photonis. Night vision goggles and binoculars for personnel and electro-optic systems mounted on vehicles, battle tanks, aircraft and ships give a big boost to internal security.

Potential partners had been engaged in discussions for some time now, but as owners of high technology, they preferred to have larger stakes in a joint entity than the 26 per cent FDI that the Ministry of Defence allows. This was an important issue in some of the joint venture proposals that are being discussed, Mr Datt said.

Until last year, the cash-surplus BEL planned to buy one or two technology-rich companies overseas with a kitty of Rs 50-100 crore. “We are wiser now than before that acquiring companies abroad is difficult. It is unlikely to happen.”

Last year, it enlisted KPMG to advise on new growth areas. “The aim is to create a new area that can give us business of Rs 500 crore in two years,” Mr Datt said. “We have agreed on five areas for exploration. KPMG has been retained to give us more information on the investment required, returns on it, the business potential and the mode of doing it.”

For the current year, BEL plans to invest Rs 700 crore across its production units towards new manufacturing/testing equipment and for establishing a new business venture.