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Bengaluru: BEL is one of the few companies that has remained upbeat about its business prospects in the defence, and now the medical electronics sector, even at the peak of the COVID-19 pandemic. Seeking to ride on the government's thrust on self-reliance, BEL is confident that the ongoing financial year will be better than the previous one. BEL Director Finance Dinesh Batra, in a freewheeling conversation with Defence Watch, spoke on a variety of issues that are going to positively impact the performance of the defence PSU in the coming years and how does it plan to leverage the government's thrust on creating an Atmanirbhar Bharat. Here are the excerpts:
Q: How has the experience of the past year of operating in the midst of a pandemic been? BEL was one PSU that worked relentlessly even at the peak of the COVID crisis.
A: When COVID-19 broke out, BEL was entrusted with the responsibility of making ventilators and the company stood by the trust that the country had in it. Before that, we were into only manufacturing some components related to medical electronics. After successfully producing 30,000 ventilator units, BEL has now decided to enter the medical electronics market in a full-fledged manner. The forte of BEL is that we deliver what we promise. Our low-cost ventilators have been transported across the length and breadth of the country. Taking a cue from the success, we have built an indigenous cost-effective haemodialysis machine. The new dialysis unit has been launched in collaboration with Renalyx, which is a renal-health start-up. We displayed that at Aero India 2021.
Another important thing that struck out as an opportunity for BEL during the pandemic was the government's call for Atmanirbhar Bharat. The government issued a list of 101 import embargoed defence items comprising of not just simple parts but also some high-technology weapon systems. This came as a big boost for companies like us who invest Rs 1,000 crore, or 8-10 percent of our turnover, every year in indigenous technology development.
Q: So when the clarion call for Atmanirhar Bharat was issued by the government, would you say that BEL was already prepared for it and rose to the opportunity?
A: For decades, we have been working on indigenous technology development but because customers were free to import, we could not take any advantage of the indigenous technology. Let me explain it with an example. After the government's decision to place an import ban on systems valuing less than Rs 200 crore, the Airports Authority of India (AAI) had to look for indigenous technology for surveillance radars. We saw the opportunity and BEL immediately entered into an MoU with AAI for surveillance radars and ADNs etc, which are our in-house developed systems.
Q: And are they at-par with the ones they used to import?
A: We are benchmarking our products with the best in the world. Many a times we are better, in fact. I will not go into the details because they are different technologies and different products but out of my own experience, when I was heading the BEL Pune unit, I paved the way and diversified into electro-explosives. Until then, we were into only electronics. We integrated explosives with electronics. So the very first product that came out was electronic artillery fuzes which initiate explosive function in ammunition.
Very soon, we are going to put up a plant for making reserve batteries, maybe through the ToT route or through totally indigenised design. Then we will manufacture Li-ion battery packs because the country needs the same for meeting requirements of the e-mobility programme
We set up the complete state-of-the-art infrastructure and signed a ToT with an Israel-based company. There were certain flaws in their technology which we worked upon. And they were thrilled to see what we did in such a short time. They were trying for years and our engineers modified and improved the circuit within a short period of time. Today, we are on the path of indigenising many of those components which we were importing. Very soon, we are going to put up a plant for making reserve batteries, maybe through the ToT route or through totally indigenised design. Then we will manufacture Li-ion battery packs because the country needs the same for meeting requirements of the e-mobility programme. So we are not shying away from diversification.
Q: You talked about leading the development of electro-explosive devices. Could you tell us more about this?
A: Oh, it is going to be wonderful and it has a very bright future. With this small ToT, we ventured into the arena of artillery fuzes, which we have supplied for 155mm Bofors and 105mm guns. We have supplied more than 7 lakh fuzes worth above Rs 800 crore. So, BEL is confident in this direction and we have big plans. We have already signed a lease agreement with Tamil Nadu Explosives. We have acquired 200 acres of land in Nagpur to set up our own explosives' integration plant there. Once that is done, we have plans to enter into the loitering munition, airdrop bombs. So, see this is totally unexplored and a different area for BEL, and it is coming as an add-on.
Q: With a tough year behind, what do the finances look like?
A: If you look at our balance sheet, we are a debt-free company which gives us the liberty and strength to expand and diversify and the wherewithal to muster whatever quantum of investment is needed. We have a net worth of over Rs 10,000 crore. If we go by 2:1 ratio of debt to equity up to Rs 20,000 crore, we have the capacity to take loans. Even if you keep that at 1:1, then it would be Rs 10,000 crore. So, we are willing to expand, diversify and collaborate.
Q: You talked about equipment in medical electronics. Does the company have plans for exports?
A: Export, in any case, is our top priority and the government also wants that in the long run 25 percent of the turnover should come from export. Currently, they are asking for 8-10 percent. So we are gearing up to reach there. We are opening marketing offices across the globe. We are in Singapore, Vietnam, Myanmar, Oman, and we are opening up offices in Nigeria and Brazil.
We have recently entered into civil aviation, then in the e-mobility sector, we are entering into manufacturing battery-packs, chargers, and other sub-components, Satellite integration is another diversification…
We are trying our best to exploit the indigenously developed technology as much as possible.
Q: Are there plans which could not be executed because of COVID?
A: The COVID-19 pandemic has impacted the whole world and we too are no exception. There have been supply-chain disruptions. But I am pleased to tell you that while COVID has been there, my half-yearly turnover figures are better than the one in the last financial year. So it is not that the COVID-19 pandemic has had no effect, but the commitment with which BEL employees fought the pandemic and the lockdown has changed the game for us. In the middle of the lockdown, we successfully delivered 30,000 ventilators. So in a way, COVID has been a blessing in disguise and now we are confident that we can deliver any order. So, we are going to close this year on a better note than the last one.
Q: Tell us about the order book of BEL.
A: Presently, what I can tell you is this financial year is going to be bulkier in terms of order booking. The order book is at an all-time high of around Rs 54,000 crore. After delivering this year's double-digit growth in turnover, we will be ending the year with a better order book than the last financial year.
Q: What are the technologies and products that will give BEL an edge in the future?
A: We are diversifying into many areas. I will enlist a few here that are going to be game-changers. Like, we have recently entered into civil aviation, as I was telling you. Then in the e-mobility sector, we are entering into manufacturing battery-packs, chargers, and other sub-components. Satellite integration is another diversification for which we have acquired land in Bengaluru. Since our core competence is in the defence electronics segment so products like missile seekers, both RF and IR seeker, and Coastal Surveillance System (CSS) are being readied on priority. So, the list is long and strong.
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