BEL targets 10 pc revenues through exports by 2030

Enhancing investment in R&D & global market presence

With ambitious targets set, public sector defence major Bharat Electronics Limited aims to achieve 10 pc of its revenue from exports by 2030, alongside a substantial increase in investments in research and development, K V Suresh Kumar, Director (Marketing) tells Media India Group in an interview on the sidelines of Eurosatory, currently underway in Paris.

What is the objective of Bharat Electronics Limited at Eurosatory 2024?

BEL is a multi-technology, multi-product multi-unit company, which is working on the state of the art technology intensive products, we have brought here wide range of products. We have got a full set of offerings that we can provide to customers and our main aim of coming to this exhibition is to make our presence felt and to network with potential customers. Therefore, we have brought a full range of products to show to our customers what we can provide them.

What kind of feedback you have received from customers so far?

We have got a lot of interest coming in from our potential customers  and potential industry partners have shown interest in working with us and therefore the response has been fabulous.

Any particular product, which has proven to be very good here?

A lot of interest has been shown in communications products, as well as in electronics products, to start with, because basically the current exibition is more focused on army requirements and therefore in addition to that, we also have received interest in supplying radars. 

Where is this interest coming from geographically? 

Interest is coming more from the Middle East, African and Latin America and South American customers.

What about Europe?

We are really looking at partnering with the Europeans and trying to become one of their direct suppliers because technologically, Europe is either more advanced or at par with us. So, we are trying to get into partnerships with European companies, because we have got the production capabilities and we have very good R&D facilities. 

Therefore we have got the capability to design and develop anything that is required by the customers and therefore we are  trying to get into partnership with these European companies. We are also looking at great opportunities for the manufacturing these things in the country, for example, for the Rafale aircraft programme, BEL is a key manufacturer of certain products. We are looking at more of such opportunities.

Are you also discussing some joint product development with the Euroepans?

Yes, but I would not like to mention the products, but we are working  with many companies to undertake joint development programmes.

How was the last financial year for you?

It has been fabulous. BEL has achieved the highest turnover of INR 198 billion which is about USD 2.4 billion and our order book is looking absolutely great. We have received close to USD 4 billion in orders last year. It is  a highest ever record acquisition by BEL for any year and our current order books stand  around INR 760 billion, so therefore the year has been fabulous and we are looking at continued growth and continued performance in the coming here.

What is the breakup between domestic market and exports?

Exports is not great because we are not putting a higher focus on exports. In the last year the export turnover has been about USD 100 million, USD 92 million to be precise. It is actually 100 pc increase compared to the previous year, but when we look at the company’s total turnover, it is about 2 to 3 pc and the very purpose of coming here and is to make our presence felt and acquire new potential customers and increase our export revenue over the next five years. By 2030, we would like to achieve 10 pc of our revenues from export.

Are you also looking at partnering with Indian private sectors?

Of course, we already partner very strongly with the private sector in India as over 40 pc of our production is integrated by the private industry. All our big programmes have a number of private sector partners. BEL does not produce everything on its own and we depend on subcontracting activities, therefore private industry is a very strong partner.

In terms of R&D do you also do joint product development with them?

We do collaborative R&D with the industry where we take partners, so there is a scheme called collaborative R&D programme which is run by BEL and we do a lot of  partnerships with the private industry. 

Today, I don’t think that every company needs to do everything from scratch. Indeed, it is in the benefit of both the parties to come together to develop something together. For example, you know, we can share our expertise in electronic system design with private company, which has got expertise in mechanical design and therefore we can come together and provide state of the art, world class products, rather than be developing a mechanical design expertise in-house. I think it is always better to come together and to do that, and I don’t see there is any red line that you can draw. I mean, as long as the collaboration is successful and we are able to work together, I think you can do wonders.

What is your revenue target for this year? 

This year, our chairman has set an ambitious target of achieving INR 250 billion in sales. But I think it is achievable as we have got a very good order book on hand. 

How much is your R&D spend?

We are the largest R&D spender among the Defence Public Sector Enterprises. It is up to 6-7 pc of our revenues, and by 2030 we would like to increase our R&D investments to 10 pc of revenue, that means, you know, if you assume that we have a revenue of INR 500 billion in 2030, our R&D spend would exceed INR 50 billion.