BHARAT ELECTRONICS LTD (NSE: BEL) Q3 2026 Earnings Call dated Jan. 28, 2026
Corporate Participants:
Manoj Jain — Chairman and Managing Director
Damodar Bhattad — Director-Finance and Chief Financial Officer
Analysts:
Teena Virmani — Analyst
Umesh Raut — Analyst
Jyoti Gupta — Analyst
Amit Anwani — Analyst
Amit Dixit — Analyst
Harshit Patel — Analyst
Hardik Rawat — Analyst
Kavish Parekh — Analyst
Mohit Pandey — Analyst
Dipen Vakil — Analyst
Atul Tiwari — Analyst
Sumit Kishore — Analyst
Vikash Singh — Analyst
Bhalchandra Vasant Shinde — Analyst
Prathamesh Rane — Analyst
Balasubramanian A — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Bharat Electronics Limited Q3 FY26 Earnings Conference Call hosted by Motilal Oswal Financial Services Limited. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Ms. Teena Virmani from Motilal Oswal Financial Services Limited. Thank you, and over to you, Ms. Virmani.
Teena Virmani — Analyst
Good evening, everyone. Thanks, Ikra. On behalf of Motilal Oswal Financial Services, I welcome you all for Bharat Electronics Q3 FY26 results conference call. I would like to thank the management for giving us the opportunity to host the call. From the management side, we have with us Mr. Manoj Jain, Chairman and Managing Director; Mr. Damodar Bhattad, Director Finance and CFO; Mr. S Sreenivas, Company Secretary.
Without taking much time, I hand over the call to Mr. Manoj for his opening remarks. And after that, we will open the floor for Q&A. Over to you, sir.
Manoj Jain — Chairman and Managing Director
Thank you, madam. Good afternoon, everybody. So I will just briefly summarize the financial highlights up to Q3 for the financial year ’25, ’26. So till Q3, we have achieved revenue from operations of INR17,302 crore as compared to INR14,538 crore, which was up to Q3 of last year, with the overall growth of 19%. The profit before tax increased to INR5,171 crore up to Q3, as compared to INR4,242 crore up to Q3 last year, with a growth of 22%. The profit after tax also increased to INR3,845 crore, as compared to INR3,183 crore up to Q3 last year, with a growth of 21%.
The EBITDA has increased to 30% up to Q3, as compared to 28% up to Q3 last year. The earning per share also increased to INR5.26 up to Q3, as compared to INR4.36 last year same time, and order book position as on 1st January 2026 is INR73,015 crore, and as on 28/01/2026 as on today is INR73,450 crore an order acquired till 1st January 2026 is INR18,100 crore, until today is INR19,300 crore. This is a brief highlights of our financial performance up to Q3.
So now the floor is open for question-and-answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Mr. Umesh Raut from Nomura India. Please go ahead.
Umesh Raut
Thank you so much for this opportunity. Good evening, and congratulations for very good set of results. My first question is pertaining to the guidance for FY26 now, given that we have received — reported about 19% sales growth in first nine months, and we have received closer to INR19,300 crores of orders. So are we revising our sales growth number upwards, and considering that there is also a finalization of NGC order, which is remaining with shipbuilders. So are we anticipating any spillover of order from NGC from this year to FY27, which we was assuming earlier during Q2 call?
Manoj Jain
Yeah. So regarding guidance, as we told we are consistent about our guidance. So whatsoever guidance we gave at the start of the year, we are maintaining that, and we are confident that we will achieve or exceed this guidance. Regarding NGC, yes, we told after Q2 also that there is a chance of spilling over order to next financial year. Now also we are quite hopeful that maybe around INR3,000 crore to INR5,000 crore deal we may get by before March-end, and the remaining leads or remaining orders may come in Q1 and some of them may be Q2 of next year.
But definitely by next year Q2 [Technical Issues] all the orders of NGC order, because it is split across multiple line items, and a separate order we are expecting for those line items. So that’s why that is our final call right now. That around 20% to 25% of the orders we may get before March, and remaining orders in Q1 and Q2 of next year.
Umesh Raut
Understood. So are we including this NGC orders in our guided number of INR27,000 crore for FY26?
Manoj Jain
Yes, this is around INR3,000 crore to INR4,000 crore is included in that for ’25, ’26. Because we expected this conclusion. Because mostly at this level, GRSC level, GRSC and GSL level, it is already concluded with government. So they are now in the stage of final negotiation. And other things for these line items including specs finalization, some of these type of technicalities only are going on. So we are confident that before March, we will get INR2,000 crore to INR3,000 crore minimum this year, and that is included in this INR27,000 crore guidance, which we have given.
Umesh Raut
Understood. Second question is on the margin side. If I look at this quarter margin it was closer to 30% at a EBITDA level. I think other expenses are down by about 15% vis-a-vis our 24% top line growth. So any one-off in other expenses that we had in third quarter, and for nine months, our EBITDA margin is closer to 29%, which is much higher than guided number of 27%. So are we expecting major outperformance in terms of EBITDA margin for full year ’26?
Damodar Bhattad
No. As of now, we maintain the EBITDA margin of 27% what you have guided for the current year. Because it’s a composition of products which we sell. So up to December, what you have sold, and from January to March, the composition will be slightly different. So we maintain the EBITDA margin of 27% only for the current financial year.
Umesh Raut
And pertaining to specific third quarter, about other expenses declining by 15% year-on-year?
Damodar Bhattad
Other expenses declining. Just a minute. I’ll just look into it, and then we can move on to the next question. I’ll just give you on that.
Manoj Jain
Somebody else can ask the question. By the time we are just getting the data. We will reply while replying to his answer. We will reply on this also.
Operator
Thank you. Umesh. The next question is from the line of Jyoti Gupta from Nirmal Bang. Please go ahead.
Jyoti Gupta
Good evening, sir. Thank you so much. And great set of numbers. I think on a similar line, I just wanted to know EBITDA margin improved sequentially. What’s your outlook for margin stability through FY26 and into FY27? Are there any headwinds from input cost or manpower expenses that we should expect for FY27? And also, can you elaborate on the key drivers behind this margin expansion? Was it product mix, cost efficiencies, or prices?
Damodar Bhattad
FY26 as we told we are maintaining the margin of 27% EBITDA margin of 27% for the current year. As far as the next financial is concerned, we will be giving our guidance when we meet next time. So we’ll be giving the guidance for ’26, ’27 later on. Presently, we maintain the EBITDA margin of 27% for the current financial year.
As regards composition, it says different product mix is there. That’s how it leads to this slightly higher EBITDA margin in the up to December. But overall for the current financial year, still we maintain the EBITDA margin of 27%. Yes.
Manoj Jain
And regarding this manpower expenses, as you have told, we are not anticipating much change in the manpower expenses, which is around 14% typically of our turnover. We will have more or less similar figures only. And as told earlier also, it is pay revision or these labor codes etc, are not going to affect us too much, because we are more or less aligned with this labor codes also. So that as well as the pay revision, which may affect for three months something extra. But because of our increased turnover and other parameters, we are not seeing much change in our manpower cost as a percentage of turnover.
And the key driver for better EBITDA margin typically is product mix. But definitely the indigenization which we are in keep on increasing. Our value addition is becoming more and more we are — our material cost in our overall turnover is reducing, although marginally slightly, but it is in the reduction side only. And that is mainly because of more and more indigenization, more and more involving our MSME friends. So because of that little bit more push on positive side for the EBITDA margins are there.
Jyoti Gupta
Sir one more question. In terms of execution pay, which is key in the defense electronics. Are there any delays in project deliveries due to supply chain constraints or approvals? And if so, how is BEL mitigating those in case there is anything for future products that you see or anything currently which is there?
Manoj Jain
Supply chain management is the real job of companies like us, definitely. We are closely watching it, closely monitoring it at various levels. And overall, what we had seen last year, last year to this year, was much more comfortable for us. And next year to follow, it will be much more better, definitely. So this year, although we are targeting around 95% of our items, we will deliver on time. That is our internal target.
And next year, we wanted to make it 100%. There are some supply chain-related constraints because of some of the items, especially semiconductors, and some rotary joints, or some other critical items, which are not manufactured in India. So there are some supply chain management-related challenges, but we are forcing them a bit before and trying to mitigate that a bit early so that overall delivery to our customers is not affected.
Jyoti Gupta
Okay, thank you so much, sir.
Operator
Thank you. The next question is from the line of Amit Anwani from Prabhudas Lilladher Capital. Please go ahead.
Amit Anwani
Thank you, I’m audible?
Manoj Jain
Yeah.
Amit Anwani
Yes, so my first question, sir, with respect to the order. So this year, since 9M is quite strong, it will definitely be doing more than INR27,000 crore top line. And even on order inflow, we have guided INR27,000 crore. So just wanted to understand the — you have been of course highlighting about at least 13%, 15% growth even for next two, three years. Just wanted to understand apart from QRSAM, which is expected to sustain growth, you will be needing more than 30,000, 35,000 kind of intake. So does that give you confidence that we are going to have this kind of intake? And are there any medium to large orders which you are expecting in next 12 to 18 months, which kind of ensures that you win more than 30,000, 35,000 next financial year to sustain growth?
Manoj Jain
Certainly once we have committed to you that we are going to have a growth of more than 15% year-on-year, so that we have taken care of for next three to four years at least, what are the expected orders in pipeline based on that and their convergence timelines based on that only we have given this confidence or this commitment to you. So there are so many projects in pipeline for next financial year, other than QRSAM, and we are closely watching that. And definitely it will be more than INR25,000 crore, which we are seeing minimum other than QRSAM.
So QRSAM itself, we are hopeful that we may get by this year itself means by Q4 itself. Still, we are more than 90% confident of getting that now itself. One per some few percent chance only to spill over to Q1 of next year. But we are putting all our efforts to see that QRSAM also comes this year itself. So that will give me around INR30,000 crore, INR32,000 crore additional orders in my kitty.
But in addition to that, minimum INR25,000 plus crore additional are already pipelined in next financial year. So we are confident that we’ll have a steady growth of more than 15% in years to come.
Damodar Bhattad
As regards, somebody has asked the query on other expenses from quarter-to-quarter and from what is a — result for them in reason for decrease. Actually, cumulatively, the other expenses have increased only. For quarter-on-quarter last year, the provisions were slightly more, because of which the other expenses are decreased now, it’s due to provisions decrease current year. Quater-on-quarter there’s a provision decrease, overall, cumulatively, for nine months, its total or total order expenses have increased only.
Amit Anwani
Yeah, right sir. So one clarification on NGC, you said we are accounting for INR3,000 to INR4,000, which is roughly about 25%. So that INR10,000 to INR12,000 will be probably coming in H1, the remaining portion, right? Is that the right understanding for NGC?
Manoj Jain
Yeah. Correct. We will try to get it in Q1 of next year, but it may spill over to Q2 maximum. So in H1 of next year, we are hopeful to get remaining around INR10,000 to INR12,000 crore in next year.
Amit Anwani
Right. And lastly, since we had very strong margins, and even the utilizations must be going up. So what stops us to revise the guidance? Because the ask rate for guidance at 27% for 4Q is only 25%. So are we expecting the product mix to be not favorable in 4Q or maybe next year as well? Because I think comfortably we can do more than 28%, 29%. So what is stopping us to not revise that? Since we have already completed nine to 10 months of the financial year.
Damodar Bhattad
See, overall guidance for the current year has been given at 15%, okay? So quarter-on-quarter, we are not given. There are some quarters [Speech Overlap]
Amit Anwani
Sir, EBITDA margin, I was saying.
Damodar Bhattad
EBITDA margin. Yes, it will be around, because see again as we told it’s about the product mix only. So product mix has been more favorable up to December, and maybe slightly lesser favorable from this time on. We feel that the EBITDA margin will be maintained around 27%.
Amit Anwani
Understood.
Manoj Jain
It will not go below 27%. That much we are ensuring. I can assure you it will not below 27%, which we started our year with, and we are continuously going towards that only. There should not be any doubt in the minds of you that it will be below 27%. That much we are ensuring.
Amit Anwani
Yeah. Sir, last question on the EU deal, there has been a talk about defense cooperation in that document, and kind of synergy between the Indian players and export to Europe. So any assessment you have done that leads you to some kind of product exports in Europe.
Manoj Jain
It is too early to tell that right now. But definitely, it is opening up a new market for us. And there is one more thing, a new research, joint research opportunities also, because I think they have told that there is a big research fund also available with EU, where they want to have some joint development. So there are definitely companies like BEL who are R&D focused and technology focused company. We will have good tie-ups for good joint research, and where we may expect some fund flow also from research point of view, and research, which definitely generated some more business.
So we are expecting more and more business from them. But today we have not quantified that. Maybe when we meet in April, by the time we will quantify how much more is there, and based on that only, we will give you the better guidance for next year.
Amit Anwani
Understood? Thank you so much sir, and all the best.
Operator
Thank you. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Amit Dixit
Yeah, good evening, sir, and congratulations for a good set of numbers. A couple of questions from my side. The first one is essentially on recently, we have been hearing a lot of shortage with respect to semiconductor chips. As a result of which the prices have gone up significantly in the market. So are you also seeing any impact of that in your bill of materials? And can you quantify for us, what percentage of COGs, would the semiconductor chips comprise?
Manoj Jain
Semiconductor chips are very important component of BEL designs, no doubt on that. But knowing this shortage of chips and especially sometimes one particular type of chips are in shortage, we are already made design efforts to make alternate designs. So based on that, today we are not feeling that hit on because of shortage of chips. So our designs are now much more generic. I should say like that.
So we are not facing any major challenge for us because of availability of chips or chips shortage. And overall, I think the chips we are having almost total type of semiconductors are around 2,000 plus type of different type of semiconductor; other chips are there in our total project portfolios. And of course, we are there indigenizing a few of them, and few more, we are expecting government to come out with some plans with the help of other startups and others.
And overall, we see that chips should not become a bottleneck for us in years to come. So we are coming out with that type of a plan of indigenizing those chips. So firstly, we want to start with some critical chips. We have already done some investment for microwave related important chips. So we have designed our own chips to avoid these type of shortages and these type of dependencies.
A few of digital chips, also fabless designs we have done, and all the fabs which are coming in India, we have signed an MoU with them and early engagement already started with them to leverage on the strength of them manufacturing in India. So with these type of things we are confident that chip-related issues or surprises should not affect BEL that much. That much only I can tell you at this point of time.
Amit Dixit
Sir, as a percentage of COGs, how much would this chip cost be? Just a broad estimate.
Manoj Jain
Out of the BOM bill of material, let us say bill of material is 100. So in that 100, around 20% to 30% typically will be semiconductor chips, typically. Because remaining are some assembly, some other components, mechanical components, testing all other things put together are there, but semiconductor chips — specialized semiconductor chips are of the order of this percentage.
Amit Dixit
Okay, wonderful, sir. Second question is with respect to the execution this quarter. So what would be — I mean if you can break down the revenue broadly into the execution by platform that would be great.
Manoj Jain
Previous quarter, I mean Q3, or you are asking about Q4?
Amit Dixit
Sir, Q3.
Manoj Jain
Q3 major orders we have executed in Q3 up to Q3 is mainly — up to Q3, we have executed mainly LRSAM project, Himshakti project, Battlefield Surveillance project, LYNX Fire Control, Akash Army, LRUs for LCA Mark-1A, all the digital LRUs, and Shakti EW system. These are the major orders which we have executed up to Q3, and which the seven project itself would have accounted for around INR5,000 plus crore.
Amit Dixit
Okay. And for Q4 what are the major platforms for execution?
Manoj Jain
Plans for execution in Q4 are again LRSAM, Akash Army, Himshakti, Arudra, MPR will be added in the D29 EW system we will supply a bit more because last time it was Q3 it was a bit less number. Now, around INR500 plus crore we may supply in Q4. BMP-2 upgrade also now we will supply big numbers and LRUs for LCA definitely will continue. So this is around INR4,000 crore to INR5,000 crore comes from these six, seven major projects in Q4.
Amit Dixit
Understood, sir. Thank you so much, and all the best.
Operator
Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Harshit Patel
Thank you very much for the opportunity, sir. So my first question is on the Akash missile program, while it is under execution, wherein Bharat Dynamics is the lead integrator, and we apply to them. Why you haven’t included Akash next generation in your near-term or the next one year pipeline. What would be the size and probable timeline for this large project?
Manoj Jain
Okay, so as we have rightly told, the Akash project, which we are executing right now, is called Akash Prime. Lead bidder was BDL, and we are doing production of that items, and some testing and other integration, some other trials, etc., were done. We are hopeful of executing more than 90% of that order before this financial year itself. Akash NG, per se, is the next generation Akash, for which trials are already completed. Now the process of AON approval will be put up, and that’s why we are not that much confident that by next year end we may get, it may spill over to next to next year.
So in ’26, ’27, we may not get the confirmed order of that. But definitely ’27, ’28, we have planned that, if we are lucky, we may get in the Q4 of next year. But we know the process takes its own time also. So AON and then approval, then RFP issuing to BEL. This one will be issued to BEL only not BDL. So, hoping maybe Q4 of ’26, ’27, else it will be in ’27, ’28, only we may get the order for this.
Harshit Patel
Understood. Just a small clarification. You said we will be the lead integrator for Akash NG and not BDL, right?
Manoj Jain
Sorry. It is not we will be. We want to be. Okay, because it is Air Force. This — sorry, we will be, sorry. No, Air Force is we take, army is by BDL. So, Akash Air Force. This is Akash NG is right now the requirement is from Air Force. So that’s why we are the lead bidder for this. For Army also we want to be. But as of now, Army Akash is handled by BDL. Army — Akash Air Force is led by BEL. Of course, for QRSAM program, Army and Air Force both we are the lead bidder. So that’s why there is some small confusion happens sometimes. But Akash NG, we are the lead bidder. And that’s why it will be handled by BEL. And back-to-back, we will have arrangement with video for the missile portions.
Harshit Patel
Any size of the program you can indicate.
Manoj Jain
As of now, because again once AON is done, then only the exact configuration will be finalized. Because the configuration or the requirement keeps changing. So, how much quantity they want based on that. But based on the present discussion, it is of the order of INR2,500 crore to INR3,000 crore as of now. But when AON will be done before then that they will have their own internal assessment about exact quantities which are required. So it may vary maybe generally on the plus side only typically. So right now the estimate is between INR2,500 crore to INR3,000 crore.
Harshit Patel
Understood. Secondly, there seems to be a lot of delay in the order placement for Shatrughat and Samaghat electronic warfare systems. Since, these two have been in the development stage for a long time now. Any particular reason for the slow movement in these two programs? And when do you think this will finally get — I mean, when we’ll finally get this order?
Manoj Jain
Okay, let me tell you. Shatrughat and Samaghat, both projects there were small delays because of the rigorous trials etc., but that phase is over. Trials were over. Trials were successfully concluded with the lead person is DRDO and well supported by BEL. After that RFP was issued to BEL. We have given RFP response also. So case is moving very very fast. Cost audit also is done. So we are hoping out of the two programs, maybe one of the program, we may get this year itself by Q4. Otherwise, definitely they are in H1 of the next year both the programs.
But we are still trying because things are moving in a really positive way very very fast way right now. So we are expecting one of the program Shatrughat. We may get order by Q4 of this year itself. Otherwise of course both the programs definitely by H1 we are going to get. That much I can assure you.
Harshit Patel
Thank you very much for answering my questions, and all the very best.
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, and congratulations, team, on another solid quarter. Sir, I wanted to get an understanding of based on our guidance of roughly INR27,000-odd crores, and this was prior to the EP getting approved. What now we’re looking at a balance of around INR8,000-odd crores of inflows that are to flow. Which systems in our expectations, what programs are going to constitute this INR8,000 crores of balance inflows?
Manoj Jain
Mainly to LCA order from HAL. We are expecting very soon, anytime, because we have done conclusion of price also. So we may get that. That is our biggest order in this quarter for us. As I told you NGC, and the Shatrughat, these two we are hoping to get by this year itself. And remaining orders are there two, three more bigger order of around INR1,000 plus crore. We are confident we will cross INR27,000 crores without QRSAM, definitely.
Hardik Rawat
Got it, sir. And if you could indicate the size of these three major orders that you mentioned. I understand that for NGC you mentioned INR2,000 crores to INR3,000 crores in this current year. But for Shatrughat and the LCA LRUs that you spoke about any indication as to the size of these orders?
Manoj Jain
Shatrughat will be around INR3,000 crore, and LCA order also will be around INR2,400 crore plus roughly.
Hardik Rawat
Got it, sir. My second question was with regards to the provision write backs that you mentioned in this quarter. What would be the size of these provision write-backs that you’ve done and —
Damodar Bhattad
Provisions write-back, what you have done is overall INR256 crores.
Hardik Rawat
Okay, sir. I have more questions. I’ll get back into queue. Thank you so much.
Damodar Bhattad
Okay, thank you.
Operator
Thank you. The next question is from the line of Kavish Parekh from B&K Securities. Please go ahead.
Kavish Parekh
Hi, good evening. Thanks for the opportunity, and congratulations on a great set of numbers. My question with respect to the QRSAM project, so could you please break down the total project cost into key components, and who will be the key suppliers for the same? For instance, if I go to BDL, It would be great if you could quantify the same and also mention what would be the order values for vehicles, launches, etc. And how much of the content will be handled by BEL in-house?
Manoj Jain
QRSAM is a very complex project consisting of various big big subsystems, and missile is of course the largest subsystem, and missile will go to BDL from BEL. So BEL will place an order. Once we receive the order, we will place an order to BDL about the missile. And missile order itself will be around — roughly around 30% of the total order value. Roughly, I’m telling you. So that will be there, and we will see what else we can share with you. But remaining orders will be executed by BEL, and definitely we have our large ecosystem of industry partners for QRSAM program.
So we, jointly with them definitely will execute the remaining portion, which is around 70%, you can say will be executed by BEL with the other industry partners of BEL. And definitely BDL is our of course the largest partner in that way because the missile comes from him. Of course, in missile also some of the subsystems we will jointly make, some of the electronic subsystems also we will jointly make. That is the agreement between BEL and BDL. So, overall, this program will definitely give a boost not only to BEL and BDL, it will give a major boost to all the major industries in India.
Kavish Parekh
But within that 70% could you quantify how much would be handled by BEL in-house?
Manoj Jain
As such, we have — we are don’t want to quantify that at this stage, because once we receive the confirmed order with exact quantities, then only we can say this much portion is going to LNT or this much portion is going to other vendor, etc., like that. Today we cannot tell you that, but definitely it is based on the approved vendor list of DRDO. Because it is a DRDO-developed project where some vendors for some line items also are defined by DRDO, and as per the configuration list given by them, only the orders will be placed among those approved vendors, which DRDO has finalized.
Overall integration, definitely will be done by BEL, and overall offering as integrated system will be done by BEL. So that is as per the agreed philosophy between BEL and DRDO. It is as per the LATOT document, which is signed between BEL and DRDO, that type of arrangement is there. And that is common to all DRDO projects. So in every DRDO projects in the LATOT document, they will quantify the total configuration list of major subsystems, and those subsystems we have to take from those vendor.
In QRSAM program, because it is a very large program. DRDO and BEL jointly have developed not only single vendor, in most of the line items, we have developed alternate vendors also. So, because of that, we hope that any surge capacity which is required for this program will be sufficiently handled. So this is done as per the configuration list, which is finally given by DRDO to us. Based on that only, we will give this individual line item or some modules related orders to different stakeholders.
Kavish Parekh
Understood. And following up on the QRSAM, once the project enters execution in FY28 or ’29, I understand that execution will be spread over four to six years. What sort of a margin impact do you anticipate here? Considering a large part of the program sort of gets outsourced.
Manoj Jain
No. It will be more or less similar like Akash, which we are handling. Something like that only outsourcing will be more or less similar in QRSAM program. So we are not making a — we cannot — we are anticipating what type of margins will be there in this program, definitely. And when we will come out with year-on-year guidance at that time, we will see how much QRSAM which contribute to that. And based on that only we will give you the overall guidance in the that year projection.
Kavish Parekh
Understood. Lastly, sir, on exports, any key export opportunities that you see over the next 12 to 18 months?
Manoj Jain
Definitely, export opportunities are there in all the areas of BEL’s operation. And we are doing a focused attempt to increase our export turnover from presently 3 to 4% to 5% in near future and overall 10% in a long-term. So that is our plan or vision. Some few orders which we are expecting in Q4 are related to satellite communication equipment, communication equipment, the TR modules which we are regularly getting from France, the data link projects, and operationalization of our coastal surveillance systems for various countries. So these are some of the major leads which will convert into a reality in Q4.
Kavish Parekh
Understood, sir. On the non-defense side, I think the medium to longer term guidance or aspiration is to have the mix split in say 10-90 between non-defence and defense. Any key incremental opportunities that you see on the non-defense side to be materialized over the next again 12 to 18 months?
Manoj Jain
Certainly, as you also told, right now our non-defense is around 6%, 7% type of thing only, which we want to definitely cross 10% plus in near future, and long-term our aim is to make it 15% and beyond. So, for that, continuous efforts are being done, especially in railway and metro segment we have got good leads, Kavach program is going in right direction. Our CBDC program also is coming to almost a finishing touch. And PSD platform screen doors, we have got some orders, and some more good leads are there for us. So that is related to rail and metro.
In addition, we have got very good leads and very good orders related to airport authority means aviation sector. From HAL, we received the order from airport authority. We have received orders, and many more orders are in pipeline related to airport authority, related to radars, related to our air traffic management system, and other related subjects.
So these two itself will give us a very good lead in non-defense. And space will be partially defense, partially non-defense for us. So that also will give some contribution for non-defense segment for us. So these three are the main sector where we are aiming right now a big, big leads. And of course, our cyber-security business, data center type of business, also will give us reasonably good non-defense leads. So, put together these we are confident that in near future we will try to cross 10% of our turnover through these non-defense leads.
Kavish Parekh
Got it, sir. All the very best. Thank you so much. Appreciate it.
Operator
Thank you. The next question is from the line of Mohit Pandey from Citi. Please go ahead.
Mohit Pandey
Yeah. Good evening, sir. Sir, first question is on the data center opportunity. So, if you can elaborate on what exactly is our offering here. I understand, earlier this year an order has also been one, right? Yeah
Manoj Jain
Yeah. Orders, what we have one is a few INR100 crores which is not our aim. Our aim is to quickly get a few thousands of crores in this data center business. And, main aim is that we wanted to give a secure data center solution and combined not only as a data center, as a combined value-added solution with the AI, cybersecurity, and other components built in to these digital platforms. So we wanted to give a comprehensive package around data centers.
So that is our aim, and we have done some good beginning right now. But it’s still a long way to go to reach a sizable portion around. Our aim is minimum INR1,000-plus crore next year onwards from data center type of business. So that is our aim, and few INR100 crore is not sufficient for us. So we are working out a unique solution. Because data center there are so many private players, so many other OEMs are there who are directly selling this solution. Our solution should be unique.
So we are working on how to make it unique. We are working out with some startups also in this domain who are having some unique ideas in this solution. Especially AI related some unique ideas are there which can be exploited through the data centers. So we are working out various combinations with them and hopeful to get unique solutions in this domain for BEL to sustain.
Mohit Pandey
Understood, sir. And who are the target customers here? Are these government data centers or? Yeah
Manoj Jain
Yeah. Mostly government only, state government, and central government-related activities only. We don’t want to go to the general public [Technical Issues] OEMs, etc. We are having good leads in various state governments also.
Mohit Pandey
Sure, sir. The second question is on margins. So I wanted to understand if commodity cost movements around copper, aluminum, silver, etc., what kind of impact they may have on our margins in the coming quarters, if at all.
Manoj Jain
We are not anticipating much because of these metals, because firstly, ours is a semiconductor or electronics material these variety doesn’t impact us that much. Maybe overall in our materials, maybe 5% or so maybe of coming from so called materials for us. So I don’t see any major change for us as a company, Midhani, or some other company, definitely, it may affect, but not BEL. BEL is more affected by semiconductor, and that I already explained. Semiconductor we have come out with our own plans to mitigate the risks.
Mohit Pandey
Understood, sir. Also, with regards to semiconductors and overall, are there price — what kind of price variation clauses are you able to pass on any unexpected increases to end customers? Is that possible in our business?
Manoj Jain
Yes, we are having this ERV clauses. So, exchange rate variation clauses in most of our orders with our defense forces, and that indirectly covers all the semiconductors also.
Mohit Pandey
Understood, sir, understood. And sir, last question again is on margins. So I understand most of the defense orders are currently on nomination basis, and my understanding was for most orders margin profile would be similar. But so just wanted to understand how product mix impact. Is it because indigenization levels are at different levels across different products? Or how should one understand that.
Manoj Jain
Yes. Indigenization levels, also are different. Some of the products we have IC content of around 50% to 60%. In some of the projects it is 80%. Some of even it is touching 90% also. And secondly, some of the projects we are doing value addition of the order of 30% to 40% means we are assembling a component card, assembling system, sub-system, system, and then making a system of system. In some of them, we are system integrator only. So in the system integrator projects, our own value addition will be less to our own margins will be less.
So that’s why as told by Director Finance also our product mix is really big. And it is a big AI algorithm which finally decides what should be our margins in this year based on the products which we are going to sell this year. It is a very very complex equation. Let me tell you. It is not very easy to comprehend with 350 plus products and products of products or systems and systems of systems. Calculating exactly what will be the final margins for me is a really a tough exercise. And that we do typically every quarter only we can’t do every day. It is a very very complex. So based on that only we give you an indication about what will be my margins this year.
Mohit Pandey
Sure, sir. Sir, and last question is overall and on aggregate basis, what would be the indigenization level now any ballpark number that is possible to share.
Manoj Jain
Again I told you it is varying from 50% to almost 90% or 90-plus percent in some of the programs it is like that. So average you can say, 50% into plus 90% divided by 2. So, around 70% to 73% maybe the overall indigenization level.
Mohit Pandey
Sure, sir. Thank you so much, and congratulations again, and wish you all the best. Thank you.
Manoj Jain
Thank you.
Operator
Thank you. The next question is from the line of Dipen Vakil from PhillipCapital. Please go ahead.
Dipen Vakil
Hi, sir. Thank you for this opportunity, and congratulations on a great set of numbers. Sir, my question is, so first, can you provide us with a breakup of your current order book? So you have an order book of close to around INR73,000 crore. So what would be the major orders in that order book?
Manoj Jain
Yeah, certainly I will tell you. As on 1st January 2026, the major order book consists of electronics users because we got the order for 10 years requirement for them. Then LRFM, BMP-2 upgrade, Akash Army, Ashwini Radar, MPR Arudra Radar, and EW suit for Mi-17 V5. So these seven projects will constitute around INR20,000-plus crores. So, major projects are these. And out of that first project only is for eight more years. Now remaining projects like LRFM is hardly now one, one and a half years more we have to execute BMP-2. All other projects are typically for next two years, we will execute also.
Dipen Vakil
Got it, sir. So and for the smaller value orders, so the less than INR1,000 crore orders that we get on a recurring basis, what is the likely execution period for those smaller orders? Like, is it like within executed during the same year? Or what would be the general idea for that?
Manoj Jain
So those orders typically are 12 months to 18 months. Typically, sometime only 24 months, but less than 24 months definitely. These smaller orders typically are.
Dipen Vakil
Got it, sir. Sir, and so the INR7,000 crore or INR8,000 crore additional order inflow. So you gave us two, three names on the major acquisition that are pending. So, are we confident, can we — is there a chance to surpass on the INR27,000 with the help of emergency procurement and the smaller value orders, or I think INR27,000 crore is on the upper end side of a guidance.
Manoj Jain
No. That much again I can assure you INR27,000 we are going to cross. How much more? That depends upon the last mill surprises and the Q4, whether we will get some more bigger order out of this in Q4, or they may spill over to H1. So that is the only suspense for us. But we are confident based on large orders movement, as well as so many more small orders are in pipeline for us. So we are going to cross INR27,000 crore. That much I can confidently tell you.
How much more today, I can’t tell you. And if at all we don’t cross too much, it will be in the H1. That much will be there because the good progress is already done on these major leads for us.
Dipen Vakil
Got it, sir. Sir, and so — okay, so I’ll get back on the queue. Thank you so much for answering my question, and all the best.
Manoj Jain
Yeah. Okay.
Operator
Thank you. The next question is from the line of Atul Tiwari from JPMorgan. Please go ahead.
Atul Tiwari
Yeah, so thanks a lot and congrats on yet again very strong set of numbers. Sir, my question is on your bid for AMCA project in consortium with L&T. So, where we are in that process as of now, and when can we expect some kind of definite movement and selection of the partner who will make product for AMCA?
Manoj Jain
As you may be knowing, and I think the last time we told I believe, that we have partnered with L&T for that, and L&T is the lead bidder. So right now, it was only the EUI response. So EUI response we had submitted. All the EUI responses are evaluated by a high-powered committee in MOD. We confident that we will be one of the selected bidder and soon we will get RFP. Hopefully, my estimate is around mid of February, we may get the RFP, and then they may give us some reasonable time to respond to the RFP.
And as of now, I am confident based on the strengths of BEL and L&T that we will be the strongest bidder. In that particular RFP, that much only I can tell you. But exact English or RFP also, I don’t know. So what will come in RFP. But based on the strength of BEL and L&T, we are confident that we will be the strongest bidder for this program, and we will get this program.
Atul Tiwari
And sir, my second question is on prospects for large orders. So QRSAM and NGC order we know. But except for these two, what are some of the larger orders that we can expect over next two, three years?
Manoj Jain
There are multiple such programs definitely are there for us for next two, three years. But the one of the largest program where we are working right now with good investment is that Kusha program, which is the indigenous S400. So there we are working, and we will expect something like QRSAM type of order only when that project rectifies. It may take almost three years roughly to get that order. So maybe around ’28, ’29, or so we may get that big order.
But in addition, there are some INR3,000 or INR4,000 plus crore, some eight to 10 big programs which we are expecting next year and next to next year. So there is a long list of those programs, and we are confident we may get a sizable portion of those programs in next to next year. So we have our own plans of total type of elites for these programs to maintain this growth of 15-plus percent, and good progress is there on all those programs. Many of the programs the R&D phase is already over. Now it is in the paper evaluation, and processing related things only are going on. So we are having very good confidence to get them in next one or two years.
Atul Tiwari
Great, sir, thank you. Thanks a lot.
Operator
Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Sumit Kishore
Good evening, and thanks for the opportunity. Two questions. The first one is again on other expenses for the nine-month FY26 and nine month FY25 period. Could you please quantify what is the extent of nonlinear provisions in the other expenses? That’s my first question.
Damodar Bhattad
Other expenses for the nine months has increased from INR1,158 to INR1,280, okay? In that major reason is provision towards doubtful deaths, which is around INR110 crores, is the increase. It was — it is INR709 current year as against INR598 last year. So INR100 crores is the provisions increase on account of, I mean other expenses increased by INR100 crores because of this provision, major is that only.
Sumit Kishore
Okay. And that is for the provision for doubtful debt is the — are there any other large provision. What is the total provision?
Damodar Bhattad
Total provision is INR709 for the nine months ended December.
Sumit Kishore
Okay. So actually then the other expenses have gone up even lesser than the 10.5% that we see?
Damodar Bhattad
Mainly due to the provisions only. Whatever increase we are seeing is on account of provisions. It was INR1,158 last year, INR1,280 current year, and INR110 crores is on account of provision. So it’s all almost same.
Sumit Kishore
Massive operating leverage, which is playing out. Yeah, that’s quite good. The second one is on other income. The other income for the nine-month period down about [Technical Issues]. So, how your cash position, and what element of treasury decline is,there or so what is explaining the other income decline?
Damodar Bhattad
Other income decline. See interest income is slightly less as compared to last year. Interest income has decreased from around INR472 crores to INR416 crores. As you know, generally there has been a decrease in interest rates. Also average yield has also decreased on the deposits. So that is one major point of that. So that is why the other income has slightly decreased. In addition to that, last year there was some FE [Phonetic] gain which is not there now because the rupee has depreciated current year.
Sumit Kishore
Got it. And what is your cash position at the end of cash and bank balance? As of nine months at FY26?
Damodar Bhattad
Cash position is reasonably good at INR7,000 plus crores.
Sumit Kishore
Okay, thank you so much.
Damodar Bhattad
Right.
Operator
Thank you. The next question is from the line of Vikash Singh from ICICI Securities. Please go ahead.
Vikash Singh
Hi, sir. Good evening, and thank you for the opportunity. Sir, just wanted to understand our R&D capex, which we are doing this year. And given we are participating in so many program how should we look at our R&D expenditure going forward as well because obviously this should go up. So, if you could give us some insight into it.
Manoj Jain
Yeah. This R&D capex means R&D expenditure total R&D expenditure has two components. One is revenue, and one is capex. Capex requirement of the R&D community, means there’s a test instrument and other infrastructure. So, put together itself we will call it as a total R&D expenditure for us. That last year it was INR1,468 crore or so. This year, our target is crossing INR1,700-plus crore. So, and next year it will be more than INR2,000 crore. So overall now we wanted to have almost 20-plus percent increase year-on-year on our R&D expenses.
Because we know the overall requirement of indigenization is increasing. Overall requirement of new technology development is increasing. We are also diversifying into new and new areas, and these new areas require more R&D resources. So we are keeping on increasing our R&D budget, as well as our R&D manpower also. So today we are having more than 3,200 plus R&D engineers.
In last one year itself, we have added almost 700 to 1,000 R&D engineers in our R&D manpower. And we will continuously increase further for diverse R&D areas where we are working. So, overall, we know you also may be knowing that the BEL is a R&D focused company with the three tier R&D. So definitely, we are going to increase our expenditure, or technically, it is an investment, not expenditure. R&D investments we are going to increase in a very, very sizable way. Minimum 20% year-on-year growth investment we have committed now, it will be more than 20% only, I can assure you.
Vikash Singh
Noted, sir. And so just one question, just a repeat of a previous participant. In terms of AMCA, I know we are usually three people who are there in case of whatever the order comes. If we are so, what percentage would be supplied by us? So let’s say what is the percentage that probably would have already been settled between you three people who are bidding for the AMCA right?
Manoj Jain
The thing is, let me tell you AMCA, right now there are multiple consortiums. So five or six, six or seven consortiums have participated in EOI. Hopefully in RFP may be issued to three or four only because they cannot evaluate too many fellows. So I’m guessing that. But after RFP then there will be L1 discovery, technical evaluation, and then L1 discovery. We are confident of qualifying technical, and we are confident that we will be L1.
Once we are L1 between BEL and L&T, we have arrived at some work share arrangement between both of us. L&T has backend arrangement with the third partner so that his portion some of the execution will be done by the third partner. Our portion, as of now, we are free to work with that third partner or not. But right now the commitment is between L&T and the third partner, not directly between us and third partner. But seeing the project progress, we seeing the strength at that point of time, we may share some of our work share also to our third partner. I hope I have answered your question.
Vikash Singh
Yes, sir. I just wanted to know the currently workshare percentages divided without the third partner is divided what percentage yours?
Manoj Jain
It is more or less 50-50, because we told 50-50 is the overall investment. 50-50 will be the more or less work share between both the lead bidders. So L&T and BEL. It is more or less 50-50 because investments and everything has to go together only you can’t have investment more and that work share less. So right now more everything is 50-50.
Vikash Singh
Notice, sir. That’s all for my side. Thank you, and all the best.
Operator
Thank you. The next question is from the line of Bhalchandra Vasant Shinde from Motilal Mutual Funds. Please go ahead.
Bhalchandra Vasant Shinde
Good evening, sir. Congrats for good set of results. So far in overall scheme of things in larger programs post FY27, what is the visibility means? Like what kind of a pipeline we are working, so that we’ll be able to maintain INR25,000 crore, INR30,000 crore kind of inflows over next three to five years.
Manoj Jain
These all projects I can’t tell you today because some of the projects are multi-vendor also. Many projects are definitely nomination-based because of our continuous efforts, which we have done over last five plus years to develop the critical technology modules for those programs. So we are confident overall there is a big list of projects for us. In that list of almost 30-plus items are there, which are minimum INR1,000 plus crore business for us in next few years. So that is a big list.
And we have done reasonably good R&D already for them. And as I told Kusha is one such program where we have done very good investment further. And we are hoping it will be another QRSAM for us. So these type of a two, three big programs definitely will take care of a big order book at the end of the year. And then this smaller INR1,000 crore, INR2,000 crore, INR3,000 crore, INR4,000 crore worth of orders definitely will take care of our overall growth of more than 15%.
Bhalchandra Vasant Shinde
And, sir, whenever a new order like QRSAM Kusha program starts executing, is it fair to assume that our margins will have some dilution? Because there the indigenization component will be at the lowest level. And over a period of time you ramp up in the indigenization.
Manoj Jain
No. Let me tell you, these programs are 100% indigenous. The QRSAM or Kusha programs are 100% indigenous, except the ICs and other things semiconductors. So overall indigenization level in this program is good. However, because this program we will play slightly higher-end role, the system integrator role. So the profit actually will be shared by large industry partners, MSME partners also. So we may have slightly lesser margins in this project.
But overall, projects will be very good profitable for company and for our MSME and other partners. So definitely that’s why we told we have a logical mix. Some projects we are working as a system integrator, some projects we are working from ground up like at component level or subsystem level also. So our value addition varies from I told you around 40%, 45% to something like 10% to 15%, depending upon the type of program.
So, because of that, our EBITDA margins, etc., that’s why I told it is a complex equation, and with that fly average only we told last year there’s 27%, and this year also we are sticking on to 27%. Next year April we will come back to you with our guidance for next year based on that year product mix and what type of products are there and what type of value addition in each product, which we are anticipating in those programs.
So based on that we will decide, and let me tell you in these programs of QRSAM, Kusha, etc., because they are 100% indigenous, definitely it will be much more cost-effective for us as well as for our users.
Bhalchandra Vasant Shinde
Got it. Thanks.
Operator
Thank you. The next question is from the line of Prathamesh Rane from Elara Securities. Please go ahead.
Prathamesh Rane
Yeah. Hi. Am I audible?
Manoj Jain
Yeah.
Prathamesh Rane
Yeah. So congratulations. A great set of numbers sir. Just two questions from my side. What would be the Uttam radar update for 97 numbers? And when would we be expect the order?
Manoj Jain
Uttam radar right now as a radar is handled by HAL, and only subsystem level, the AAAU level only we are one of the vendor, so but, decision about how many of Uttam radars will go or not, whether in this 97, full 97 will be Uttam radar only that decision will is being taken by HAL in conjunction with our DRDO friends means ADA.
So ADA and HAL jointly are deciding how many of these 97 numbers order will be supplied with Uttam. How many will be with foreign radar or mix of these two? We are not a party to that. Once HAL finalizes the configuration at the time, only they will ask for a bid for this triple AU, which is the most complicated subsystem or most costly subsystem of this, and then only we will come to know, and we will quantify.
As on today, we have not added that in our kitty of this immediate market leads, because we are not sure about configuration finalization by HAL still. So the day they finalize, and then they issue RFP, after that, only we can plan.
Prathamesh Rane
Sure. And one Last question on 52 Military Satellite Order, what would be BEL’s scope in that?
Manoj Jain
As of now, military satellite we are not in business, so we are in the prototyping or coming out with some unique solutions. So we are tying up with some of the startups and some of the even foreign OEMs, also we are tied up. So we are coming out with a unique proposition for these military satellites, and then only we wanted to bid.
So right now it is a bit early to tell how much of this share we will get. But we have done reasonably good progress in coming out with a unique solution for this jointly with our startup and other industry partners. And once we offer that solution to our military friends, then only we can quantify how much of this share can come to us. Today, it is a bit early to commit.
Prathamesh Rane
Sure. Thank you, sir.
Manoj Jain
Madam, it is already 5:00 [Phonetic]
Damodar Bhattad
Maximum one last question, madam.
Operator
Okay. We’ll be taking one last question, sir.
Damodar Bhattad
Yes.
Manoj Jain
Yeah.
Operator
Okay, so the next question is from the line of Balasubramanian from Arihant Capital. Please go ahead.
Balasubramanian A
Good evening, sir. Thank you so much for the opportunity. Sir, indigenization is lowest in urban systems. What specific components are still imported, and what is the roadmap for substitutions? And how we are leveraging DRDO partnerships to accelerate indigenous development in sensors, radars, and EW systems. Thank you.
Manoj Jain
Yeah, DRDO is continuously developing sensors, EW systems, etc. But as you have told already, that airborne system, there is a challenge of testing, certification, etc. So it takes its own time. If some of the subsystems are already proven in some foreign platforms, then we are tempted to use them also till our own indigenous systems are matured. But I can tell you more than 70% to 80% of airborne sensors are now of indigenous origin. But definitely, a few are still of foreign origin because they are already tested somewhere in some other platforms. So those particular systems which are already inducted there, which we are also taking, there we are going at module level indigenization.
So that activity is going on, and definitely all airborne subsystems, we wanted finally to be only indigenous. We are maybe around 70% or more already indigenized. But there is still some gap which we are bridging either by efforts of our own hours plus DRDO, ours plus DRDO plus other industry partners. So there is a slightly more complicated, slightly more complex problem in airborne segment, and we are trying to attack it jointly. And various programs are going on at BEL, at DRDO, and at our industry partners also.
Balasubramanian A
Got it, sir. Thank you.
Operator
Thank you. In the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments.
Manoj Jain
Thank you, all. As you have seen till Q3, we have gone reasonably good and I hope we have met the expectation of you all. And as we started the year, we want to see that year end will be with the figures which we had committed to you. Means revenue growth more than 15%, EBITDA margin definitely more than 27%, order inflow INR27,000 crore-plus R&D investment, although we told INR1,600 crore, but I am confident we may cross INR1,700, but at least INR1,600 plus, definitely we are going to be there.
Capex INR1,000 crore and defense, non-defense business of 90 to 10. So these are our guidance as future, and we are hopeful to exceed that only. That is a brief summary from my side.
Operator
[Operator Closing Remarks]
Manoj Jain
Thank you, all.