Bharat Electronics eyeing $1.2 billion revenue

DW : What immediate and future growth opportunities Bharat Electronics is looking at?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: We are looking at revenues in the region of Rs. 5200 Crore ($1.2 billion) which we are confident to over achieve subject to realization of some orders. Profit will also be quite stable. The new products which we are planning this year should take off very smoothly. This is the immediate growth we are looking at and this should lay the foundation for our future growth.

DW : How does the offsets program figure in your growth plans?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: What we are very happy about this year is that our offsets initiative had given us its first order. We have received a good order from M/s Fincantieri Italy for supply of Composite Communication System, Versatile Communication System, ESM System, Electric Opto Fire Control System and their integration on board a fleet tanker Supplied by them to the Indian Navy. As of today. 14.3 M Euros is the worth of the order that we have received last year which will be implemented this year. This fiscal, we are expecting another similar order for the second fleet tanker.

DW : Now that you mentioned offsets, BEL has been selected by Boeing, Lockheed Martin and Northrop Grumman as the choice offset partner, what new projects are in the pipeline and what would be the amount of money involved in these offset projects?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: Most of the products are in the Electronic warfare and Radar segment specially the IFF segment and we are also looking at contract manufacturing for them. Most of the work will be software implementation or modification, system integration and testing. These are the areas but the details are being discussed. This may happen in the next 6 months.

DW : Can you comment on the progress on some of the MOUs you have signed at Aero India 09?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: One MOU is with Boeing is to establish testing and simulation. I think Mr. I V Sarma Dir. R&D will be able to tell you more about that. Mr. I V Sarma Dir. R&D; The MOU is for the setting up a Multi platform simulation centre. This is a very good initiative Boeing has done in many countries so we thought it might be good to start this here. This is just the beginning and about 5 years from now that may become the tool by which everything gets formulated even GSQRs (General staff quality requirements). This is a very futuristic tool.

DW : What are the key areas in which BEL has built up technical expertise over the years?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: Technical expertise have been developed in areas such as Frequency Hopping Radio Receivers having extensively worked on its software. This expertise will help us on a lot more futuristic products. Similarly with the RADARS in association with DRDO. Successful implementation of Rohini radar and similar projects has given the basic confidence for us to work towards the futuristic radars that are required in defense. We have started working through the joint teams concept and it has resulted in product cycle time shrinking and delivering product to the exact specification of the customer.

DW : What are the products/services you will be displaying at the Paris Air show 2009 and what response are you expecting from the show.

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: Our concentration in Airshows is towards the implementation of the offsets. Most of the partners are now contending for aircraft products in India. Our idea is to project BEL as a reliable offset implementation partner. Looking at the opportunities and projecting required capabilities is the target. As far as product and services are concerned our focus will be African countries, south east Asian countries and the surrounding countries where our products can be accepted. As far as Europe , US and other advanced countries are concerned our focus is contract manufacturing and offset implementation.

DW : Any particular reason to chose KPMG for studying BEL’s growth strategy?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: We went through a process of expression of interest some 5 companies were evaluated. We have evaluated them on the basis of who has expertise in domain that we have a requirement in. We already have about 85% business coming for Defense and aerospace, we want to focus on scaling the 15% to 30% from other areas.

DW : How are you looking at changing 85-15 to 70-30?

Mr. Ashwani Kumar Datt and Mr. VVR Sastry: We want to consistently grow. For me it’s important that while we retain our existing customers; Indian Army, Air Force and Navy as well as paramilitary forces, we find that there are a few hundred crores business we can achieve from customers that we are presently not addressing. SO exploring and adding new markets in India. In exports we need to have a quantum jump, we are doing small volumes. This may take 2 years but it will eventually happen.