BHARAT ELECTRONICS LTD (NSE: BEL) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Manoj Jain — Chairman & Managing Director
Damodar Bhattad — Director (Finance) & Chief Financial Officer
S. Sreenivas — Company Secretary
Analysts:
Unidentified Participant
Harshit Kapadia — Analyst
Umesh Raut — Analyst
Amit Dixit — Analyst
Amit Anwani — Analyst
Harshit Patel — Analyst
Atul Tiwari — Analyst
Manish Ostwal — Analyst
Jyoti Gupta — Analyst
Dipen Vakil — Analyst
Hardik Rawat — Analyst
Andrey Purushottam — Analyst
Karan Gupta — Analyst
Nikhil Purohit — Analyst
Darshan Parmar — Analyst
Girish Achhipalia — Analyst
Ajinkya Jadhav — Analyst
Presentation:
operator
Good day and welcome to the Bharat Electronics Q1FY26 earnings conference call hosted by Alara Securities Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing star on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Harshit Kaparia from Elara Securities Private Limited. Thank you. And over to you.
Harshit Kapadia — Analyst
Thank you, Vishaka. Good afternoon everyone. On behalf of Elara securities, we welcome. You all for the Q1FY26 conference call. Of Bharat Electronics Limited. I take this opportunity to welcome the management of Bharat Electronics representative by Shri. Manoj Jain, Chairman and Managing Director Sri. Damodar Bhattan S Director Finance and CFO and Mr. Srinivas S Company Secretary along with their team. We will begin the call with a brief overview by the management followed by Q and A session. I’ll now hand over the call to. Manoj sir for his opening remarks. Over to you, sir.
Manoj Jain — Chairman & Managing Director
Thank you. Good afternoon everybody. So these are the financial highlights for Q1 for the year 2526. Revenue from operations, it has increased to Rs. 4,417 crore up to Q1 as compared to Rs. 4,199 crore last year figure with a growth of 5.19%. And profit before tax, it has increased to rupees 1289 crore up to Q1, as compared to rupees 1,037 crore. Previous year Q1 with a growth of 24.28. The profit after tax that also has increased to rupees 969 crore in Q1 as compared to rupees 776. Previous year Q1, with a growth of 24.87%. The EBITDA also has increased to 29.86% up to Q1 as compared to 22.82% last year earning per share is increased to rupees 1.33 as compared to rupees 1.06.
And order book position as on 172025 is rupees 74,859 crore. Of course after that I think almost around 2,600 crore more. We have received order after the 1st of July so that you may be knowing through our different disclosures from time to time. Including one disclosure happened today also of around 500 plus crore. So this brief about the financial highlight of Q1 for Bharat Electronics.
operator
Hello?
Manoj Jain — Chairman & Managing Director
Yes madam. You can take on now questions.
Questions and Answers:
operator
Okay, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and. Two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while asking the. While the question queue assembled. The first question is from the line of Omesh Raut from Nomura. Please go ahead.
Umesh Raut
Hi sir, Good afternoon and thank you so so much for this opportunity. My first question is pertaining to our margin performance for the quarter. We have seen a very sharp increase. These are our margins on a year on year basis. So could you please share some insights behind these improvements. What was on the account of material saving, localization and digitization? And how much was on the account of product mix?
Manoj Jain
Okay, overall margins that is last year itself we had almost 27%. So it is a slightly better than that and it should be a good sign only I should say so that is there. So it is. Although last year first quarter it was less. I agree. But overall at the year end we had almost 27 plus percent was there. And this year guidance itself was 27. So we are trying to adhere to the guidance what is given to you? So that is the first thing which I want to tell DF sir, you want to tell something?
Damodar Bhattad
Gross margins. Gross margins were better in the first quarter since the composition of products which was more renowned manufacturing were there. So it was. Gross margins were better in the first quarter. As Jimin, as you rightly said, it is due to composition of product mix.
Umesh Raut
Got it. Sir, my second question is pertaining to large ticket ordering opportunities. So could you please update us timelines for these following programs. So update on QRSM program. So where exactly now you are seeing this program kind of getting finalized in terms of order signing. Second, with respect to Ms. Star program and exit kind of now getting finalized through shipyard. And third, basically on the project Kusha which is kind of in the finance phase of development now.
Manoj Jain
Okay, QRFM as request for last time also we have progressed a lot. Now you may be knowing.
operator
Hello. Actually there is a echoing sound from your line. Can you please check it? And also some disturbance from the background.
Manoj Jain
We are also noticing that. Yeah, here it is clear. But when we were speaking we were seeing background noise coming from other side, I believe.
operator
Just a second. Mr. Umesh, can you please Check if there is anything around yourself. Yourself side on the speaker phone.
Umesh Raut
I’m on mute now.
Manoj Jain
I think now it is better. Yeah, because then madam, and we were speaking, a voice was clear from both sides.
operator
Okay, okay, sure.
Manoj Jain
Shall we go ahead?
operator
Yes, yes, thank you.
Manoj Jain
So, QR Sam, as you may be knowing, the DSE approval was given on 3 July 2025. So good progress has happened on that front. So now only the RFP has to be issued to us, which internally there are some processes for that. We are constantly following up that we are confident to get this order by February, March. As of now also it may not slip to Q1 of next year. We are confident we may get in the Q4 of this year itself QRSM because the progress looks really good for us. And DSE approval already has come regarding NFSTAR and other subsystems.
It was also told last time that our shipbuilders, they already got the order. So we have already started discussing with them about the configuration final effects, about the final bomb. So those activities are going on at good speed. So we are hoping in next three to six months we will get a considerable portion of subsystems order with us. So that is good progress is there. But this is having some five, six different type of subsystems. So for each subsystem configuration and other details, finer details are being worked out. After that we will have PNC CNCs and then order placement by them.
So hoping that also Q3 and Q4 we are expecting major portion of that from a small thing will spill over to Q1 of next year also some small subsystems may go. But majorly of the order we are expecting Q3 and Q4, Q2 nothing may happen because still we are in that discussion and that mode only the PNC TMC will take time. So typically Q3 and Q4 we are expecting majority of the portion. For this and for the kusha, we’ll be knowing we are still in the developmental phase jointly with the drdo. So drdo, those development related trials only are going on.
So order conversion is last time also told it will take minimum three to four years. Until that time we are developing systems and testing jointly with the drdo, the subsystems and their performances. This is in brief about all the three systems.
Umesh Raut
Got it, sir. Thank you so much. If I can squeeze one more. So if.
operator
I’m sorry to interrupt you, Mr. Umesh. Actually I will request you to rejoin the queue for follow up questions.
Umesh Raut
Thank you. Thank you so much.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference. Please limit your questions to two per participant. Should you have a follow up question, we would request you to rejoin the queue. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Amit Dixit
Yeah, hi, good afternoon everyone and thanks for the opportunity. A couple of questions from my side. The first one is on Dhiru Paksha. Now there has been a testimony by company indicating that they have received order for Exciter unit and certain other components for Veeru Paksha. So just wanted to understand have we also received the order or in which phase? VR. So that is my first question.
Manoj Jain
No, this Virupaksha radar Is for mainly 230. So there are various subsystems in that we have got one order developmental order from DRDO for that and that order we are in the stage of execution. But these are called development orders. So after development order and what you are referring also that company also has got developmental order for some two subsystems we call it. So they have got some order but main order is not gone to them. Main order is, I think if I’m not wrong, it is bell and extra microwave. If I’m not wrong for the main systems.
So we are developing these prototypes. Once these prototypes are evaluated and tested and I am confident we will qualify then only the production phase related or bulk orders will come. So right now it is prototype development jointly with DRDO for this virus.
Amit Dixit
Great. So thanks for the clarification. The second question is essentially relates to the emergency procurement. Now in the last concord of course, fresh from the skirmish, we expected that there could be around the media articles indicated 40 to 50,000 crores of emergency procurement. But things appear to have cooled down a bit on that front. So what are you hearing? And some of these orders that we have got in the recent quarter, do they also pertain to emergency procurement or emergency procurement if any would be over and above this.
Manoj Jain
Okay, the emergency procurement overall the activity started as last time told. We have received one or two orders already as part of emergency procurement. I think it was when we had given our public statement there we have written also some of the items like on Triple LR radar we received and one more item I think so we have started getting emergency procurement related orders also as it was told last time, I think September is the cutoff as of now for them. So by next two months we are expecting many more orders. But overall all these orders, let me assure you they will be part of our 27,000 plus crore of order book which we wanted to get.
In this total financial year we have already received more than 10,000 crores. So remaining 17 plus thousand crore definitely EP will help us in crossing that target.
Amit Dixit
Okay sir, great. Thank you so much and all the best.
Manoj Jain
Thank you.
operator
Thank you. The next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Hi sir, thanks for the opportunity. First question on the any impact of supply chain since this quarter we did about 5% growth despite very strong order books. So first thing wanted to understand anything which impacted the revenue booking because of the supply chain issue. And second how are we dealing with the real earth magnet ban which came from China Any exposure there and how are we dealing with that situation?
Manoj Jain
Okay, yeah. Your first point is correct that we only could register 5.19% growth. We were expecting around 200 plus crore further execution of the order. But last minute because of geopolitical situation especially in Israel Iran conflict that affected our minimum 200 plus crore of the revenue. So because of that only we thought we will be in double digit growth. But because of this only we could fall short of that. Anyway quarter two we will compensate for this. I am confident about that. And regarding this real world magnets it is not affecting us directly because this is mainly for EV and other segments.
We are not right now in EV segment as a big player. We are only done some partial R and D in the EV segment for chargers and other. So it is not affecting us at all with real earth magnet related issues not affecting Bell IT merge me affecting automobile sector and other companies.
Amit Anwani
Sure. And so wanted to understand on the current order book plus.
Manoj Jain
Please you have told a Madam I told to you already asked to please join the queue and we are available since 4 o’ clock and please.
Amit Anwani
No worries. Thank you.
operator
Thank you so much. Thank you Management. The next question is from the line of Harshit Patel from Aquarius Securities. Please go ahead.
Harshit Patel
Hi sir, thank you very much for the opportunity. So my first question is could you share some timelines for the Chatrugad and Shamgat electronic warfare system orders. Also how large these orders will be?
Manoj Jain
Yeah, this Chatrugath and Samagat order good progress already has happened. We have received even RFP for one of the program because they are quite interrelated program Chatrogat and Samagat. So we have got one Samagat program Already the RFP has been issued to us so we are in the process of responding to that. Generally in the public we only go after we receive the order. So this intermediate stage we Generally don’t tell. But anyway to give you confidence that it has come to that stage. And following this the next order will be for Shatrugarh. RFP will be issued for Shatrugas more or less similar configurations are there.
One is for plain and desert, one is for mountain requirements type of thing. So the total order I think for Shatrugar for Samagat put together will be around 6,500 crore plus.
Harshit Patel
Okay, understood. So my second question is on the next generation Corvettes program. So you have highlighted that we would get the subsystems related orders worth 60 to 100 billion rupees. So sir, what is the overall addressable electronics pie in this order out of which we are getting this 60 billion to 100 billion. I am just trying to understand what is the import content over here in this program.
Manoj Jain
These all subsystem barring MF star. I think the MF star MrFem only is having some 50 50% work share arrangement with our foreign partner. All other subsystems are totally homegrown. So they are as such only dependencies of ICs or some other component level things which manufacturing capacities are not there in India. But otherwise from indigenous content point of view they are totally homegrown. MSR, MRFM. Typically it is around 50, 50% work share between US and foreign OEM. Typically roughly. So that is the total NGC program. So in the total program per se I think around 60 to 70% minimum indigenous content will be there.
It will be higher only exact value I don’t know. But here roughly you can achieve around 70% indigenous content for the NGC program for Bell.
Harshit Patel
Understood sir, thank you very much for answering my questions and all the best.
Manoj Jain
Thank you.
operator
Thank you. The next question is from the line of Atul Tiwari from JP Morgan. Please go ahead.
Atul Tiwari
Yeah, so thanks a lot. My question is slightly medium term. Your revenues are now almost touching on an annual basis 300 billion rupees. And except for some of these larger orders, your order inflows are about 270 billion. And even in this quarter the order book was flattish to down slightly. So thinking forward three, four years out, can we sustain 15% plus revenue growth from this large base of revenue?
Manoj Jain
Certainly yes. 16% is not at all a challenge. We are actually internally aiming for 17.5% plus as it was told also last time. Also so many projects are in pipeline where we have done good investment at right time. Two programs are anyway QRFM and Kusha which you know, which are definitely 30, 40,000 plus crore. But in Addition also so many other missile programs. We are now DPP partner for drdo. Like one of the missile which was tested Yesterday, it is BDL and Bell Harga 2 dppt. So that way so many other missile programs. We are now confident that our share will increase in these programs.
In addition to our main equipment of electronic variety in ships, submarines or air force radars. So these all programs we have a good pipeline. We are envisioning for at least next 3, 4 years for order inflow as well as for execution. The execution itself as I stand right now around 80 plus thousand crore order book is already there with us today and including QRFM around 40 to 50,000 crore we are going to get orders now. So I don’t see 16 or 17% will be a challenge for me. But definitely it will not go below 15.
That much I can assure you. It will be between 15 to 17, 17.5, 18 somewhere. We will try to stabilize around that type of a growth pattern based on the order inflow and type of project where we are involved right now.
Atul Tiwari
Great sir. And last question is on margins. Margin performance has been very strong even in this quarter on a base of last year where the margins were out 28% plus at EBITDA level. So can we see further margin expansion also over next two, three years beyond 28%?
Manoj Jain
Presently we have guided for a margin of EBITDA of 27% this year and we maintain that since the composition of product mix is different in every quarter so it appears it’s little more this time. But overall for the current year we maintain it at 27% and over a period of time also 27 is a healthy figure. Anyway, next year when we review our product mix we’ll come back with the revised figure which may be left side or right side, I don’t know right now depending upon the overall product composition. But it will be around this range only that much I can assure you.
Atul Tiwari
Thank you sir and best of luck.
Manoj Jain
Yeah.
operator
Thank you. The next question is from the line of Manish Oswal from Nirvana Bank. Please go ahead.
Manish Ostwal
Yes sir. Thank you for the opportunity. I have two question one on the employee base side. So what is the current base of employee and in terms of addition last three, four years, how many people we added on the technical side and how much money we are spending on the innovation R D side in a yearly basis a percentage of revenue.
Manoj Jain
Okay. Our employee base was around 9,000, slightly less than 9,000 it was this year. We as we are told earlier also we will cross around 9,600 plus. And next year we are planning crossing definitely 10,000 plus. So because overall and most of the employees, what we are adding now is in the technology front almost 70% plus of our new recruitment is going into R and D because we know we require more and more stronger R and D to take care of this new technology. Related products like AI as a technology, ML as a technology, Quantum as a technology which are imbibed inside all these new developments.
So we are adding good technical manpower, almost 200 scientists. Also we are taking from premier institutes for our CRLs as part of this activity. So total we put in R and D around 6.2%. Last time it was turnover of our turnover on R and D. This year also we are expecting a bit more than that only. So between 6 to 7% of our turnover we wanted to invest on R and D. And as it was told last time also total R and D investment this year will be between 1600 crore plus. Only between 1600 to 1800 crore somewhere we will plan and it will not be below 1600.
That much I can assure you for doing this innovative R D across all domains where band is operating.
Manish Ostwal
Yeah. Second sir, in terms of that you talk about the technology like AI, ML and quantum technology. So in terms of modern warfare, where do you see the significant shift in terms of. I mean technological trend and secondly whether those technology we are having right now in India we need to have tot with other countries. So can you talk about slightly detail where we are in terms of technological aspect compared to the other players like in US or China.
Manoj Jain
Let me assure you we are almost at par with these countries in this new technology domain of aiml. We are working closely with our defense forces to see that how this modern warfare can be benefited by this new technology of aiml. The main challenge there typically in AI ML is the data. So how to get the right data to train ourselves for that we have done considerable work. We are having a very, very close tie up with our defence forces. We have created AI incubation center for Navy and Army at Bell so that we user and startups all can work together and develop this technology, this cutting edge technology well in time.
So we have done good investment, we have done a good infrastructure and good framework for these technologies to be developed for the modern warfare. As you may be knowing, all major C4I programs which we have used even in the recent were primarily from Bell with support from DRDO as the initial technology provider. But now it is mainly spearheaded by Bell. Lot of AI ML components Were there in this systems. But many more are planned now as a value addition for this C4I programs based on AIML technology. So we are confident we can do jointly with our startup ecosystem, we can do jointly with our defense users in place, closely working with them.
We can give this cutting edge technological solutions related to modern warfare without any support from foreign countries. That much I can assure you.
Manish Ostwal
Thank you, sir. Thank you. Thank you. Answering my question. Thank you.
operator
Thank you. The next question is from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.
Jyoti Gupta
Thank you for the opportunity. Great set of numbers. I have two questions. One is relating to export component in revenue. How is that likely to look? How is it going to look like in the next five years? Is it going to increase? And second is we are talking about missiles. But LCA mark one where the CMBO has said that we will finish five LCAs. But looks like we received two engines in July and we expected to receive roughly around 12.
And my sense is best case scenario we should be complete with seven LCAs. So what would be your contribution in terms of from the LCS this year? How will that impact your margin or revenue from the high platforms?
Manoj Jain
Okay, so regarding export, we are having consistently performance of almost 20% year on year growth on export front. And we are confident over a period of next five years we try to reach around 10% of our turnover through exports. Right now it is around 4 to 5%. So we are constantly putting efforts as overall company is growing at roughly 15 to 16%. But exports our internal target is more than 20. So a period of time the export share to the overall turnover will steadily increase. And we wanted to reach in next five years around 10% of our turnover through exports.
So that is our vision about the exports. We are going in right direction with a reasonably good speed, I should say on export front. Regarding lca. Yeah, there was some delays of the engine availability to sal. But our components, our electronic components which goes in these platforms because that goes and that is they use for their testing and making the total LCA ready for just fitment for the engine. Their side we have not seen any challenges. We are regularly started supplying to HAL and that we continue to supply. So hal finally supplying LCs to user is not impacting well per se.
So our regular production to meet their expectation as per the contractual timelines which between us and HAL was committed. We are more or less on target for that. And it is not going to affect our revenues per se.
Jyoti Gupta
But what could be the contribution of your revenue Coming from HAL.
Manoj Jain
This year I think SL we are supplying LCA component and then some other helicopter components also. So those are there. Overall I think we are planning around. You can assume around thousand plus crore total put together for LCA and other helicopter programs of HAL. Typically a thousand crores plus minus 100 crore may be there because some radars also we are supplying to them this year for their airport operations. So tentatively around thousand plus crore you can assume.
Jyoti Gupta
One more question. Can I add on this? Okay, thank you.
operator
Thank you. The next question is from the line of depend wakeel from Philip Capitan. Please go ahead.
Dipen Vakil
Thank you so much for the opportunity sir. And congratulations on a good set of numbers. So my first question is in the line of to understand a little bit of your order book. Sir, can you give us a breakup of of the pending orders in your current order book. So major maybe 510 contracts which are large value in your order book.
Manoj Jain
So as on today, as on 1st of July. Technically the major order book largest is LRC program. You may be knowing now we received one order also this year also out of that. So around 5000 plus crore is LR program. QS is around 4500 plus crore. Akash army is the third one which you may be knowing. The Akash prime trial successfully it was done recently. Nearly came in the media also. So that around 3,000 crore. BMP upgrade around 3,000 crore. Ashwini Arudra radar around 2,500 crore. Shakti around 2,000 crore. Shakti EW system around 2,000 crore.
So like that is there top 1012 programs itself consisting of around 35 to 40,000 crore order book for us.
Dipen Vakil
Got it sir. And I wanted to also understand sir. Recently you received an air defense Atulia radar from Indian army. So what would be the kind of execution cycle for such order?
Manoj Jain
I think it is around three years. If I’m not wrong. Because already we have realized early production model also for that and total 24 numbers of the radar we have to supply as part of this roughly three years. I can say exact details I don’t have. But typically because there is no FOPM or other things here you have to directly start supplying. Because we have already developed the prototype and are ready with the so called production version now. So we hope to complete this in roughly three years time frame.
Dipen Vakil
Got it sir. So safe to understand that even electronic office suit for Mi 17 helicopters with execution cycle will also be three years.
Manoj Jain
If I’m not wrong it was four years. Okay, you are telling now it is depending upon not only our production capacity, it is depending upon what user wants. Because user has to do this like upgrade. They are already flying these helicopters so when that will be available to us for these upgrades. So they have their own plan for next three to four years. So if I’m not wrong it was almost almost four years in that three more years. So total four years is a delivery schedule if I’m not wrong about that. But that is mainly because of the overall planning jointly between us and airport.
Based on that this schedule was worked out and we are on time for supplying them these subsystems. See all these are factored in in our giving our exhibition programs. Whatever we are telling is all factored in in our exhibition programs. Whatever we are predicting.
Dipen Vakil
Got it? Thank you so much for answering my questions and all the best.
Manoj Jain
Thank you.
operator
Thank you. The next question is from the line of Hardik Rawat from IIFL Capital. Please go ahead.
Hardik Rawat
Thanks for the opportunity. Good afternoon and congratulations team on a very strong set of numbers. My first question is depending on the question of the order book constitution which are the major, you know considering our guidance, conservative guidance of 15% of the 22,000 crores of balance revenue to come in the next nine months. What will be the major programs that will contribute to this?
Manoj Jain
Just one major order to be received or order to be executed in next nine months. What was your question?
Hardik Rawat
Orders to be executed sir.
Manoj Jain
Orders to be executed. Then it’s okay. So Lrpm of course always the tops for us. So Lrfem is around 3000 crore. We are hoping to execute this year In Shakti is another big program where we are going to realize revenue around 1700 plus crores. Akash army around 1300 crore. D29 LRU for LCA, DSS and Arudra around 6 to 800 crore each. And then links you to IACS Shakti EW BMP2 upgrade around 500 plus crore. And then remaining are smaller smaller things. So overall we have planned totally how we are going to execute in next 3/4 leftover to achieve this growth of at least 15% for this year.
Hardik Rawat
Got it. So that’s very helpful. One last question would be with regards to the margins front. Now you know we have seen a sharp expansion in the operating margins which have largely been led by the gross margins. Yet our other expenses have grown as a percentage of sales by roughly 215bps to 9.5 percentage. Any specific reason because of this, you know reason for this jump as a percentage of sales. Have we made any additional provisioning this quarter?
Manoj Jain
Yes. Regular provisioning will be a part of whatever we need to do at that particular point of time, depending on the delivery schedule of products. But in certain cases we get the DD extension without ldos, without the penalties also. So we are able to reverse. So there’s provisioning is there as a part of other expenses. But that is a regular feature.
Hardik Rawat
Yeah. So nothing out of the standard.
Manoj Jain
Yeah.
Hardik Rawat
Thank you so much.
operator
Thank you. The next question is from the line of Andre Pushatam from Cogito Advisors. Please go ahead. Hello. So your voice is not audible. Hello. I will request you to join the queue. The next question is from the line of Ajinkya Jadhav from KRIIS Portfolio. Please go ahead.
Ajinkya Jadhav
Yeah, thanks for the opportunity. Yeah, just wanted to ask like, are we into the sonar system? Like, have we participated in the tender. For the ATAS sonar Sonar?
Manoj Jain
I think we are the largest supplier of sonars and we are the trusted partner for NPOL who is the main designer for sonars in India. So we have associated ourselves with them since beginning and we are doing some proactive investment also jointly with them on sonars. We have our own some subsystems development and indigenization program also for tonars like side scan sonar and others. We are planning to have a export worthy version of sonar also. So overall I think in the sonar front we are a good technology provider for our defense process and we are doing now some more value addition in that by adding this AI ML type of technologies or integrating it for larger strategic platforms.
So as such I don’t see any issue of changing our role for that. We are going to further excel only in this domain. We are hiring some more advisors in this domain to see that this is strong position in the sonar development we continue to maintain. And we are hardly depending on foreign countries from the sonar perspective. Although a few foreign origin sonars are there, but they came as part of the platform earlier itself. Any new sonar per se, I doubt whether now we are importing.
Ajinkya Jadhav
Yeah, great to know about that. And the second question is regarding that. What is the sales mix for between you can say the component assembly and. The product in our total sales?
Manoj Jain
The thing is per se, we are making products only as part of the product. We do the assembly. Okay. That per se assembly we don’t take as a business case. Okay. So we generally sell modules, some modules, systems or systems of systems. Same thing is our components per se. Components direct business because we have a component foundry also. But that buyback business is very, very minimal because that is only for some strategic ISRO and other requirements only that is very, very insignificant I should say as part of the business.
It is more of a strategic in nature presently. So presently our sale mix is mainly of products and solutions.
Ajinkya Jadhav
Got it, got it, got it. Yeah, thanks.
operator
Thank you. The next question is from the line of Karan Gupta from asv. Please go ahead.
Karan Gupta
Hello, I’m audible. Yeah, yeah. So I just joined a little bit late. So I just your commentary on the one question regarding revenue and margin side. So what’s. What’s the product exchange has happened? No. Kind of 4, 5% of the revenue growth this quarter on the margin side, their gross margin of improvement is around 9 to 10%. So what products mix that change. And you also said something on the more you are doing in house manufacturing of some of the components which was your earlier outsourcing. So what’s the impact of in future in house manufacturing and the product mix on the margin? I mean if you can just quantify if we are doing more in house manufacturing, so how it will impact positively on the margin side.
Manoj Jain
Okay, let me again clarify. I think every last time also we told it is not enough manufacturing, it is in house design or indigenization which as a drive we are doing. Manufacturing we do based on the case to case basis. Typically we involve our MSME and other partners more and more wherever they are available and their quality output is ensured. We generally take from them only when we are not finding any MSME partners for doing manufacturing. Those items only we do in house manufacturing. Otherwise our motto and vision is to promote our MSME partner and take their help as and when required as much as possible.
But I was mentioning about in house design and indigenous designs. So we are doing more and more efforts for indigenization. So indigenization is a bit different means designing in India, but manufacturing in Bell or outside Bell that we see on case to case basis. And as I told wherever possible, if NAM vendor is there, MSME vendor is there, we firstly opt to that only. And that only will give us actually more and more margins. Because definitely when we involve our MSME vendor Ecobase, it will be overall beneficial for them and for us also. Only thing we have to ensure is the quality and timeliness of the deliveries that we go through a rigorous process of evaluating our vendor base and based on that only we select them.
But once we select, we really do handholding and see that they also prosper and we also prosper. So that is the about this in house manufacturing opening in house Design front. The second point you told about revenue. Yeah. This year first quarter we had got almost 5% only as our revenue growth mainly around 200 plus crore which we thought we will realize the sales by June. Because of geopolitical situation especially in Israel Iran conflict, some of the critical components from Israel could not come and because of that we could not achieve otherwise. Our target was at least 10% plus in the first quarter itself.
Overall anyway definitely we will cross 15%. But in the first quarter itself we were having our internal target of 10 plus percent. But we could fall short of this because of this last minute so called surprises for us. And that is a regular feature nowadays knowing the geopolitical situation around the world. But sometimes some particular item may affect us a bit more in one quarter next quarter it will compensate because we have overall very very large product mix. So this large product mix will not impact us too much. Like here also it was around 200 crore impact only was there which definitely I am confident we will compensate in quarter two.
And overall margin wise as it was told earlier also our product mix is so large we can’t quantify whether this product mix and what margin will come with this product mix. Average it out and overall what guidance we have given will be around that only will be our margins. It will not affect too much because of so called geopolitical situation or because of the product mix for one particular month etc.
Karan Gupta
Okay, okay, fair enough. Anything we are doing with their life simulation, we are providing services to you maybe export side or domestically for some companies. Live simulation.
Manoj Jain
Live simulation. The simulator business. We are having simulators. We are supplying, exporting also now to some of the countries and definitely in India large complex systems and solutions related to radar or missile segment. We are developing advanced simulator for our Indian needs. But we found a lot of export opportunities and we have exported in the recent past also some two, three good deeds. We have exported also and we are doing marketing for our simulator business further in many more countries. So we are confident that the simulator business is really great going for us and good growth prospectors are there in this business.
We are putting some more manpower also in this particular segment and then seeing that some of the large programs because any large programs require the high end simulator also. So we wanted to develop those simulators well in time itself so that it can be used while supplying the equipment itself. This emulators can be used for good training from day one itself. So we are working for that.
Karan Gupta
So part of the business is the part of the business.
Manoj Jain
Part of the business will be around maybe 2 to 3% of our total business less than 5%. Definitely. 1 of our SBU is primarily doing that business and 2 of our R D houses are supporting them. So out of total 29s views, actually one SV is more focused towards the simulator and one more SBU is partially supporting them. So you can see the overall business also depends upon how many SBs are working with around. You can say roughly 2% of our business.
Karan Gupta
Okay, thank you.
operator
Thank you. The next question is from the line of Nikhil Purohit from Fiden Asset Management. Please go ahead.
Nikhil Purohit
Yeah, hi. Thanks for the opportunity. Am I audible? Yeah, just two questions. So what was I. I joined the call. What was the defense versus non defense ratio.
Manoj Jain
Again? Typically defense non defense is 88 to 90% and 10% is roughly non defense, which is our typical figure.
Nikhil Purohit
Got it. Okay. And does our exports order inflow guidance remain intact?
Manoj Jain
Yeah. Yes, yes, yes. We are confident. We are confident of what’s your target? We are given around 120 plus million. We are confident we will have that good. Progress already has been done. Although we don’t give a direct breakup of how much export order we have received quarter to quarter. We don’t give that. We give overall consolidated figures only. But in this order, what we have received right now also there is some portion of export orders also. And we are confident we will meet our guidance on export.
Nikhil Purohit
Thanks.
operator
Thank you. The next question is from the line of Umesh Raut from Nomora. Please go ahead.
Umesh Raut
Thank you so much for giving me an opportunity once again.
Manoj Jain
Yeah.
Umesh Raut
First question is sir, pertaining to increase possible increase in employee cost on the account of 8 pay commission. Now specifically in FY28. Because I think if I look at early assessment of what they are recommending, I think it is about closer to 3x kind of increase in basic pay. So any assessment, early assessment, what kind of increase we can expect in case of employee cost.
Manoj Jain
I think that that’s fine. Also last time also we indirectly hinted to you this airpay commission things are not directly relevant for us. Although indirectly it will control our prp. There is a separate pay revision committee which will be constituted by government for PSU that will get some input from this HP commission. But it will not be exactly same. And in the PRC they give a lot of flexibility to PSUs to decide based on their profitability and viability of from financial point of view. So at that time we will see definitely we want to give the best to our employees.
But I don’t see any big challenge in the FY28 for that. We will Start doing some small provisioning from 27 end onwards and see that. But I don’t think it is going to impact us too much. Because our overall growth, turnover growth will compensate for this small increase in employee cost. That much I can assure you.
Umesh Raut
Got it. And my second question if I look at our services business I think there also we have set up now new SBU related to SaaS business as well. But I think our service business contribution and overall turnover is still at about closer to 10 11%. And looking at our defense installed base as well now it looks like we have a sizable exposure towards installed base and indigenization is also going up. So how do you think this services turnover as a percentage of total revenue for you to go up in medium to longer term?
Manoj Jain
As you have told a 10 to 11% is our services sector.
operator
Sorry to disturb you sir. Again your line is echoing. There’s echo in your line.
Manoj Jain
That is Madamura side. I believe they have to mute her. Shall I go ahead?
operator
Yeah please go ahead.
Manoj Jain
Yeah. So 10 to 11% as you have told we are trying to increase it to 13 14% over a period of next two years. So definitely slightly increase will be there in the services. Because from the new areas also now we are pursuing the services especially one order which we have received even today. Whatever we have given in public domain data related to financial services related business by our software we have got a good order. So these orders non defense variety also will increase. So we will have 3 to 4% overall increase in our overall product mix because of services we are expecting 1011 will become 13 to 15% over a period of time.
Umesh Raut
Got it. Sir, just one clarification. As a part of defense offset contracts does services come under as a more of a potential opportunity for exports?
Manoj Jain
Everything can come under offset opportunity for export. But definitely right now we are not getting any big leads of the services variety under offset. Under offset typically is a contract manufacturing type of thing or some of the subsystems which we have to supply to them as bne. So services per se and offset. These two are not gelling together as of now. But definitely there is a scope.
Umesh Raut
Thank you sir. All the very best. Thank you.
operator
Thank you. The next question is from the line of Harshit Patel. Please go ahead.
Harshit Patel
Thank you very much for the follow up. Sir, we had received an order worth close to 2000 crore from HL for the electronics LR for LCA mark.
operator
Sorry to disturb you sir. There is a noise in your background of whistling.
Harshit Patel
Hello. Is this audible?
operator
Yeah.
Manoj Jain
Yeah some noise. Is there echo but we will manage and when we speak at the time I think he has to mute we’ll do that.
Harshit Patel
We had we had received an order worth 2000 crore from HL for the electronics LRUs for the first 83 numbers of the LCA Mark 1A program. How large could be the follow on order for the subsequent 97 numbers. How much more wallet share we will take with the enhanced offerings. In this upcoming order.
Manoj Jain
It will be more or less in that order of 83 to 97 and eld escalation HL cannot give us more than that. So it will be because quantity to quantity and typically it is year on year escalation so that will be there. So you can extrapolate how much it will be roughly it will be around 3,000 crore. I can say including escalations roughly 3,000 crore plus minus. We have to sit across with ETL and do smart negotiations that only will tell us what is the final figure. And as and when we finalize that contract we will definitely intimate to all of you.
But you can assume ballpark figure of roughly 3,000 plus minus 200 crores here and there.
Harshit Patel
I was asking from the point of view that won’t we be supplying many more subsystems visa this what we are supplying right now for example, the UTTAM ASA Radar will be part of our offerings. When we’ll go to the this additional 97 numbers there could be much more offerings on the electronic warfare subsystems as well. So we will be supplying the same subsystems or we will increase our as well in this new in this newer order.
Manoj Jain
You have rightly pointed out what I was referring you because you told electronic subsystems which we have supplied for 83 so for 97 we will supply all those same but of course EW and Radar are the two new subsystems which still not finalized configuration or minor details of that. And there are I think in both of them there are two partner so we don’t know who will become L1 in that. So we are only bidding but not confident whether we will get the full order. So maybe for those EW and there is a 50% probability I should say although as management I should be confident about 100 but I know my competitor also would like to have and the second thing HL may decide to give it to L1 and L2 because many times when systems are complex and timelines are crucial, they split the order between L1 and L2.
Right now EW and Radar related those discussions or those draft RFPs or contract discussions have not yet started with ETL. So I can’t quantify right now what type of terms and condition they are going to write for that. Once they give us some draft RFP then I can come out with a more revised figure for this EW0R. Right now I have excluded EW0R from that and only the other sub electronic subsystems around 1111-16 type of subsystems which we are supplying for them. So those subsystems only I told order value of around plus minus 3000 plus minus few hundred crores.
Harshit Patel
Understood sir. Thank you very much for the elaborate response.
operator
Thank you. The next question is from the line of Darshan Parmar from Jeffreys. Please go ahead.
Darshan Parmar
Hi sir. Congrats on good set of numbers. Most of my questions are answered. I just had one question regarding the potential opportunity on the drone front. If you could give some sense on that please.
Manoj Jain
Drones per se. We are some four or five major leagues where we are working on drones. One of the lead anyway is the Archer UAV for which some trial and other evolutions are going on and immediately completing that we are expecting a big order on Archer uav. But in addition there is a loitering ammunition. There is a logistic drone and there is a male variety of drone requirements which has come. We are pursuing these three four more opportunities of drones. Mailwala and Archer are definitely big leads for us. So we are confident by year end at least one of the order we may get out of these four five leads before this and the next two to three years.
Definitely something orders we will expect from that. But presently I don’t have a quantified figures about that because these all are in different stages of evaluation only they have not come to a contract finalization stage where I can clearly give you some numbers. But definitely drone and drone warfare and anti drone these are the area of importance for Bell. We are committed for this particular segment because we know we can give very good solutions to our defense forces in this segment.
Darshan Parmar
All right, thank you.
operator
Thank you. The next question is from the line of Girish from Ms. Please go ahead.
Girish Achhipalia
Thank you for the opportunity sir. Just couple of questions. Firstly on the order book, what portion of the order book of 75,000 crores that you have today is recognizable as revenue beyond FY27 as in the contractual obligations and your execution which is going to be beyond FY27 whether it is FY28 or 29 if you can quantify that. And second question I had was on the order book on currently how much of it is nomination versus competitive bid Those two were the questions.
Manoj Jain
So order book out of this next two years on the majority of the orders we are going to execute only some 23 big programs like fuses is there which is there for next 10 years actually and eW systems solutions are typically for around 4 to 5 years delivery schedule so they are only a little bit larger. So more than three years out of this order book around 14,000 crore is there for more than three years remaining. All are within three years executable. And regarding nomination and competitive bidding the ratio is around 9090 plus minus to 10% 9010 we can say roughly 90% 10% competition as of now.
Girish Achhipalia
And this is competition is including the non non defense or are you talking only about defense? Sir, 1910 ratio.
Manoj Jain
Put together even some of the non defense also we have got a nomination. It is not that only difference. We get on nomination based on our strength acquired across number of years. Some of the nomination projects we have got like this platform screen door which we have got so many other projects are there on non defense also. So this mix is for both depends and non defense both.
Girish Achhipalia
Just like you said 3 years plus is 14,000 crores. 2 years plus would be how much sir, would it be like 25,000 odd crores or any ballpark number here?
Manoj Jain
Yeah, 2 to 3 years is around 8,000 crore plus. 8 plus 14 around 22, 23,000 crore is 2 years plus.
Girish Achhipalia
Okay, thank you sir.
S. Sreenivas
We can have one last question.
operator
Okay sir, thank you. The next question is from the line of Hardik Rawat from IIFL Capital. Please go ahead.
Hardik Rawat
Appreciate the follow up opportunity. Two quick questions. Firstly with regards to the exports opportunity, so which are some of the key projects that Bell have developed which are finding good traction in the export markets?
Manoj Jain
The thing is for us all our radars, missiles, communication systems, software solutions all are there in our export related portfolio For US drones and anti drones, especially anti drone systems also lot of opportunities are existing right now and one new area now is this P4I solution. After Ops Indoor you might have seen so many of our C4I solutions were time tested. So now many of the countries are coming towards us for giving a customized solution for them for the C4i. In addition our contract manufacturing related to TR modules and NPRAX which all eight those type of things also are increasing for us.
So there is a good set of products and solutions across almost all domains where Bell is working. So good export leads are there right now and that’s why we are confident we will achieve the whatsoever. We have given guidance at the End of the year we are going to achieve that. So these products are of almost all major areas of operation of Bell.
Hardik Rawat
Got it sir. And lastly sir, what would be the capex figure for FY26?
Manoj Jain
Capex figure is a thousand plus crore. We are going to have this time. Thousand crore plus only. It cannot be less than that. That is we are committed this year because we are having large extension and other plans already are underway. And a lot of capital items are required for our new generation test instruments and others. So overall put together we have done good planning for that. And we are confident we will definitely cross thousand crores.
Hardik Rawat
What it says that helps. Thank you so much and all the best.
Manoj Jain
Thank you.
operator
Thank you ladies and gentlemen. That was the last question. I now hand the conference over to Harshit Kaparia for closing comments. Please go ahead.
Harshit Kapadia
Thank you, Vishakha. We would like to thank Manoj sir, Damodar sir as well as Srinivasa for. Giving us an opportunity to hold this call. Any closing remarks for the investor community, sir?
Manoj Jain
Okay. Same is like Future outlook for FY25 26. We are maintaining all those parameters. I will just repeat that. The revenue growth more than 15% EBITDA margin. More than 27% order inflow. 27,000 plus crore excluding QRFM If QRSM comes which we are still confident for Q4 if it comes then it will be a reach of 30,000 plus crore R&D investment. As it was committed it will be 1600 plus crore only. Capex thousand plus crore and export 120 plus million dollar. So these are our future outlook for 2526. And we are confident of achieving.
operator
Thank you ladies and gentlemen. On behalf of Elara Securities Private Limited and Bharat Electronics. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.