labels: bharat electronics ltd, electronics - industrial
BEL to enter civilian market news
Pradeep Rane
21 June 2004
Bharat Electronics Ltd (BEL), a leading supplier of high-end electronic communication and other equipment to the Indian armed forces, is trying to get into get into civilian market in a big way.

The company is making efforts to achieve a prudent sales mix by reducing dependence on defence sales. The management is seeking to develop civilian markets with avenues opening up in the form of supply of electronic components, supply of electronic voting machines (EVMs), launching of indigenous set-top boxes, etc.

BEL is also trying to tie-up with its technology partners to supply various components. Currently around 70 to 75 per cent of BEL''s revenues comprise of sales to the Indian armed forces. The company is seeking to reduce its dependence on defence sector to widen its market mix, even though it is believed that defence expenditure by the government will remain stable with emphasis on continuous modernisation and upgradation of warfare technology.

The country has maintained defence expenditure at 2 to 2.5 per cent of its GDP. For financial year 2002-03, the budgetary allocation has been hiked by 14 per cent to Rs650 billion to specially meet the armed forces' modernisation needs.

According to analysts with CLSA, a leading foreign broking firm, "BEL has steady growth prospects and is a strong cash generator." The company is virtually debt free and net cash positive.

The company was set up in 1954 to develop, manufacture and supply high-end electronic equipment to the Indian defence forces. The major products are radars and sonars, communication equipment, electronic warfare equipment, opto electronics, tank electronics and specialised components.

The Company''s strong order book position, currently at Rs66.5 billion, is expected to be maintained in the near future. The order backlog is marginally lower in March 2004 as compared to the previous year (Rs69.4 billion). However, this is not a cause for concern since bunching of orders may present a skewed picture at the year end. In April, the company received an order of Rs5.5 billion for supply of short range radar equipment.

BEL is targeting strong growth in exports. Exports are targeted to increase to Rs5 billion by FY07 from Rs 414 million in FY04. India''s growing proximity with Israel has given BEL an opportunity to establish relations with Israeli entities whereby it would export components at competitive rates.

Currently BEL has partner companies in France, Sweden, Israel, SAARC and CIS countries. The cost conscious African markets is also be targeted by BEL. It is targeting both defence and para mitary organisations for exports.

Immediate export prospects include supply of short-range radars to Sudan, Indonesia, Uzbekistan and Mauritius. Post successful implementation of EVM''s in the Indian general elections, BEL has received enquiries from several countries including USA.

BEL has two joint ventures - with General Electric Medical Systems, USA for X-ray tubes and Multitone, UK for paging systems. It has also launched the "Simputer" - a Linux based computer - in collaboration with Picopeta. BEL is also in talks with MSO''s to commercially launch its set-top boxes for television when CAS is implemented.


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BEL to enter civilian market