BHARAT ELECTRONICS LTD (NSE: BEL) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
Unidentified Speaker
Renu Bed — Senior Vice President
Manoj Jain — Chairman & Managing Director
Damodar Bhattad — Director (Finance) & CFO
Manoj Jain — Chairman & Managing Director
Analysts:
Unidentified Participant
Mohit Pandey — Analyst
Amit Dixit — Analyst
Nitin Arora — Analyst
Sagar Gandhi — Analyst
Vatsal Desai — Analyst
Atul Tiwari — Analyst
Jyoti Gupta — Analyst
Sumit Bhatnagar — Analyst
Devesh Lakotia — Analyst
Ranodeep — Analyst
Deepak Krishnan — Analyst
Manish Ostwal — Analyst
Dipen Vakil — Analyst
Raj Rishi — Analyst
Karan Gupta — Analyst
Nikhil Prohit — Analyst
Harshit — Analyst
Khush Nahar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Bharat Electronics Q4FY25 earning conference call hosted by IIFL Capital Services Limited. As a reminder, all participant line will be in listen only mode. And there will be an opportunity for you to ask question at the end of today’s presentation. Should you need assistance during conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Ms. Renu Bed from IIFL Capital Services Limited. Thank you. And over to you ma’ am.
Renu Bed — Senior Vice President
Thank you. A very good morning to everyone present. On behalf of IFL Capital, I would like to thank the management of Bharat Electronics for giving us the opportunity to hold the 4QFY25 earnings call from the management team. We have with us today. Mr. Manoj Jain, Chairman and Managing Director, Sridhar Modar Bhattad, Director Finance and CFO and Mr. Srinivas, Company Secretary. I now hand over the call to Mr. Manojain for his opening comments. Thereafter we can start the session with Q and A. Thank you and open to you sir.
Manoj Jain — Chairman & Managing Director
Thank you madam. Good morning all. So I will firstly cover the financial highlights for financial year 2425. The turnover increased to rupees 23,024 crore as compared to rupees 19,820 crore previous year with a growth of 16.17%. The profit before tax increased to rupees 7,090 crore as compared to rupees 5,335 crore previous year with a growth of 32.91%. The profit after tax also increased to rupees 5,288 crore as compared to rupees 4,020 crore previous year with a growth of 31.55%. The EBITDA also has increased to 29.39% as compared to 25.22% last year. The earning per share increased to rupees 7.23 as compared to rupees 5.50 last year.
Order book position as on the 1st 4th 2025 is rupees 71,650 crore. So overall on all the parameters company has registered good growth. Parameters are well within what was given to you as a target or expected performance. I hope we have increased only your expectations. And now briefly about the current geopolitical situation. You all know Bell Systems were there in all the forward areas providing offensive and defensive applications. Lot of C4I solutions developed by Bell and used by our Users were there in the field this time. You have heard lot more through the media about Bell involvement.
Bell teams were there in the forward area supporting our users and getting the feedback. Overall, we feel satisfied that yes, a technology developed by us was used by our users in a very, very efficient way. We got a lot of appreciation from our users presently and regarding this emergency procurement which government has now come out immediately. Still the projects are being discussed. So various projects of Army, Navy and Air Force are being discussed. We are actively involving ourselves for those discussions and we are hoping good orders will come under emergency procurement also for us. Otherwise also.
Anyway, we have a long lineup of various projects which we are expecting in this year and subsequent years. That is in brief from my side. Thank you. Thank you all.
Questions and Answers:
operator
Now start the session with Q and A. 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 their touch tone telephone. If you wish to remove yourself from question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Mohit Pandey from Macaren. Please go ahead.
Mohit Pandey
Yeah, good morning sir and thank you for the opportunity and congratulations on a good set of numbers. My first question is on orders. So basically any ballpark number you would like to share on what could be the quantum of. I know you mentioned this is still under discussion, but any ballpark number on what could be the quantum of the emergency procurement orders that would come this year. And secondly, any update you’d like to provide on the large pipeline orders such as QRSAM and Corvid linked orders that. Could be very helpful.
Manoj Jain
Yeah, certainly. Now EP projects, it may be a bit early, maybe another one week or so we will get the correct estimate of what all the projects which are coming which are to be done by bell because you know, EP projects are for arms and ammunition replenishment, some other spares, etc. Those and a few critical subsystems or systems which they feel are to be purchased immediately. So there is a list of so many projects and spares which we are looking at. But at this stage, because the discussions only are going on once the list is finalized, then only we will come back to you.
Something like minimum 8 to 10 or more different line items. I am expecting immediately minimum most. It may be even more also because the list is being finalized till now. Now regarding the long term projects. Yes, as you have told QRFAM good progress is done on QRFM in last year. And as we told last year we are expecting QRFM order hopefully before March. But it may slip to April, May also. Right now we are thinking it may come by February, March itself because good progress is there on that front. But worst case it may be shifted by one quarter.
So that is our thing for the biggest order which is as I already told around 30,000 plus crore order. We want to grab it in this year itself. Worst case it will be Q1 of next year. And so many other big projects are in pipeline which we are hopeful to realize this year and subsequent years.
Mohit Pandey
Yeah, thanks for that answer sir, if I can ask what are the other bigger pipeline projects that you’re expecting this year?
Manoj Jain
Yeah, no the thing is that is the biggest QR SEM but in addition to that the NGC program next generation Corvettes for that there are so many items of Bell. So we are expecting a major order of that subsystems because that will come from one of the shipyards only or two of the shipyards who will become L1 and L2. So from them only it will come. So we are hoping that majority of those subsystems there are around 10 to 12 subsystems which are there on these type of ships. So those will come in this year.
Then we are hoping Chatrugat and Samaghat that is a EW system so that also we may get this year. In addition so many other things like additional LCA requirement which HAL is pursuing. So from HAL we may get the order this year only. Then some BND spares for LR SAM, Atulya, Radar, Shakti, other GBMEs like that. There is a long list ADFCR. So a long list of projects which we are hoping will come in this year. Worst case they may go to slip to next year Q1 or Q2. So that way we have good leads right now order acquisition related and we are hopeful for be better next year.
Mohit Pandey
Yeah understood. Sir, I have other questions. I’ll come back into the group. Thank you so much and wish you all the best.
Manoj Jain
Okay, thank you.
operator
Thank you. Next question is from the line of Amit Dixit from ICICI Securities. Please go ahead.
Amit Dixit
Yeah hi, good morning everyone and thanks for the opportunity. Congratulations for a good set of numbers considering whatever you have discussed in the previous question. Just wanted to understand the kind of order inflow that we may expect for this year. I know there has been around 3300 crores that you have received so far. But what kind of Order inflow do you expect this year? And the subpart of this question is that given that we have seen a skirmish on the border and missiles have been successfully deployed, don’t you expect QRSA model actually to be expedited?
Manoj Jain
Yeah, that’s why I told earlier also QRSM order related. All the paper activities and other things are going on very very fast. We have also made one team dedicated for only finalizing this contract with the user. We are hoping it may come by last quarter of this year itself. But we are telling in addition to QRFM, QRSM may be around. Roughly around 30,000 crore we are expecting. In addition to that we are hopeful to get this year around 27,000 crore additional orders. So if QRFM comes in this year total we will cross 50,000 plus crore this year itself.
Otherwise also minimum 27,000 crore we are expecting this year. Of the orders which I have told you a big list was there. So these all orders definitely will give Us more than 27,000 crore this financial year as a order book. Additional.
Amit Dixit
Just. Just a clarification. 30,000 crores is the total size of QRSM or our share.
Manoj Jain
The QRFM is a. We are the production agency for QRFM so order will come to Bell. So total 30,000 crore is what we are expecting as order from users to Bell. And this order actually combines Air Force and army total requirements.
Amit Dixit
Got it sir. The second one is on the S400. So we found that S400 was very successful in the recent clash. And project Kusha is being contemplated now as per the media reports. And the size of the order could be as per media reports, around 40,000 crores. So what would be our share in project Kusha?
Manoj Jain
As you have rightly told? Yes, indigenous S400 is called Kusha. And knowing the importance of this project, we started investing on this project Presently this project is driven by DRDO and Bell is a development partner for them. The DCPT we call it. So we are the development partner with DRDO and we are developing jointly with them so many subsystems of the Kusha. Mainly all type of radars, different type of radars are there in that different type of control systems. Control centers we call it. Those are there there. We are already nominated DPP system integration of this system integrator for this is yet to be finalized.
We are hopeful that we will be system integrated also. So in case we are system integrator then as you have indicated around 40,000 crore order will come to Bell. Because system integrator Only gets if they decide to have two system integrators, then also definitely then 100% we will be one of them. We are confident of that. So then maybe around 20,000 crore as per your estimate will come to us as direct order. But the subsystems which are their major subsystems of indigenous S400 will be from Bell. So that’s why we are expecting very good order book of these subsystems.
But presently we are more involved in how to make this system very quickly jointly with the drdo. So our main focus right now is on the development front. But definitely orders will come in a due course of time.
Amit Dixit
Okay sir, thank you so much. I have other questions. I will get back in the queue and all the best.
Manoj Jain
Thank you.
operator
Thank you. Next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Nitin Arora
Hello.
operator
Yes sir, you’re on.
Nitin Arora
Yeah, thank you. Thank you sir for taking the question. So though you articulated the kind of emergency procurement which is happening just on the execution side also you see what you would have planned six months back for this year, FY26, is there a chance of faster execution because of, you know, the, the certainty of, you know, further disturbances? What is happening currently? Any change in outlook in that, in that part on the revenue side?
Manoj Jain
Revenue side. Anyway, at the end of the call we will tell you what we are expecting this year. But as you have rightly told, the need of the hour is to execute the projects faster.
So we are assessing that situation. Based on that situation we will see how we and our overall supporters because it is not that what we produce is manufactured within. Well, it is with a large number of MSMEs, other vendors who are there who are supporting us. So we are in constant touch with them in last 15 to 20 days and seeing how we can overall make the total execution faster. Internal also some process improvements. Further, we have done so jointly. Between that and discussions with our MFME and other vendors, we will come out with a plan of executing it definitely more faster than what is expected by our users.
Now I can assure you we are going to meet or exceed our user expectations. That is our goal. Even during this ops indoor also whatsoever users expected, definitely I am confident that we have met or exceeded their expectation in terms of support spares and other things and we continue to do that by giving them earlier to the requirement deliveries so that we are doing all these things and definitely we will execute it faster than their expectations.
Nitin Arora
And any comment on the profitability? Sir, it’s been very strong. Q4 specifically as well so whole year margins are pretty much higher than your guidance.
How one should look next year. If you can comment one on that, that’s it.
Manoj Jain
The revenue and margins guidance will give at the end.
Nitin Arora
All the best.
Unidentified Speaker
Hello.
Nitin Arora
Yes, thank you.
operator
Thank you. Next question is from the line of Sagar Gandhi from Invesco Mutual fund. Please go ahead.
Sagar Gandhi
Yeah, am I audible?
operator
Yes sir.
Sagar Gandhi
Yeah, yeah. Sir, my question is on the working capital, while the performance has been outstanding. Our working capital seems to have deteriorated. Significantly both on the receivables inventory front and payables also. I mean you have cleared use of. I mean you cleared substantial amount of liabilities. If you can comment on how do you see this receivables inventory changing over the next few quarters?
Damodar Bhattad
See if you look at our working capital portion it has been Fairly stable around 1.5 current assets to current liabilities. Even the current year, 31 March 25, the current ratio is around 1.7. So receivables and inventory, there’s not much change as compared to the previous year. Maybe five, six working days. Five, six days is the higher, that’s all. So overall it remains same working capital portion remains good and we are getting good inflows from the government side also.
Sagar Gandhi
So sir, your other liabilities, if you. Look at your cash flow, other liability section, there is a material change, 2900 crores changed year over year and consequently that is lead to net cash from operating activities going down from 6,000 4,600 crores. Only 586 crores.
Damodar Bhattad
No, that is if you could see been it is on account of the advances what we had received last year order book, the advances were slightly higher. This year the total order book intake was slightly less, 18,000 only as you are aware. So based on that from operating to that extent it is less but there.
Sagar Gandhi
Are no challenges on the receivables front is what you can. No, no challenges.
Damodar Bhattad
No challenges. Yeah.
Sagar Gandhi
Oh thank you sir. That is it so much.
operator
Thank you. Next question is from the line of Vatsal Desai from HDFC Mutual Fund. Please go ahead.
Vatsal Desai
Hello, I’m audible.
operator
Can you come little closer to Mike?
Vatsal Desai
Hello, Am I audible?
operator
Yes sir, Please go ahead.
Vatsal Desai
Congratulations on a great set of membership. So my question is again regarding the emergency procurement. So could you give a quantum of what will be the size of the Pickup procurement and what will the margins look like for those?
Manoj Jain
Again as I told you it may be a bit early. Maybe within, I hope within the next eight to ten days. All the IP procurement list by all the three defense Users will be finalized and then only we will have the correct estimate of what are the projects which will come to bell in that. So today it’s not appropriate for us to tell, but we are discussing for various requirements, emergency requirements from them, but how many they are going to freeze under EP and how many they will go through the normal FTP or other path that the call user has to take.
So once that list is finalized, then only we will start responding and planning for quicker execution for those EP projects. So today I can’t give you the quantified figure.
Vatsal Desai
Understood, sir. And you also mentioned faster. You try to, you know, implement faster. Execution for these projects. So will that escalated pace of execution impact margins positively or negatively?
Damodar Bhattad
See margins guidance including everything will be giving at the end of the conversation.
Vatsal Desai
Okay.
Manoj Jain
All the situation based on that only. We will give you our final figures of the margins and others at the end of the call.
Vatsal Desai
Okay, Understood. Thank you.
operator
Thank you. Next question is from the line of Atul Tiwari from JP Morgan. Please go ahead.
Atul Tiwari
Yes, thanks a lot. Sir, my question is on NGC program. You know, could you shed some color on the size of the order that you could expect from this?
Manoj Jain
As I told, we are having so many subsystems of ngc. So almost all electronics in the NGC program will be from Bell. The thing is, the subsystems finalization with the shipyards may take some time. Overall it will be of the order of 6,000 to 10,000 crore. I don’t know exactly right now how much they will realize this year and how much may spill over to next year. But large amount of order, maybe largest in this year after QRSM will be from this NGC program. But technically it is subsystems. So different, different orders may come from two shipyards, but put together the figure will be between 6 to 10,000 crore somewhere.
Atul Tiwari
Okay, sir. And so my second question is on your exports. You know, what was the quantum of exports in FY25 and are you seeing increased traction in exports because of the performance of your products in the recent conflict?
Manoj Jain
The thing is, last year I think we achieved one, not $66 million which was a healthy growth for us compared to overall Defense Ministry. All the productions, Defense productions, what they have achieved overall we have exceeded from that this year we are planning around $120 million. But as you have told, lot more leads are now fructifying, or may fructify based on the last geopolitical situation where our equipment solutions performed exceedingly well. But that takes its own time. That takes minimum, I can say one year for us to convert those leads or those advantages things to order.
So we have to wait for at least one year to get those orders and execution will take another 12 to 18 months. So export front we will see right now our growth based on our previous order book, etc. We are expecting around $120 million this year, which is again a healthy growth of more than 15%. We are targeting maybe after one or two years based on the what sort of progress we may get on these new leads, we may expect more than 20% growth. But for that we have to really work hard this year to convert those leads into confirmed orders so that at the end of this year only we will let you know how much we have encased on the present technological solutions which we have to generate new leads.
Atul Tiwari
And sir, a follow up question on exports again. Over past few months we have seen European rearmament and we are given to understand that you already have some relationships with various users in Europe, you know, in supplying components and all that. So are you seeing, you know, some kind of traction for supply, you know, for European armament from both sides?
Manoj Jain
Definitely. This is a good for Bell because so many of our electronic systems, our fuses, different type of fuses and other ammunition which we are now in, so those are really required by European countries. So we are in constant touch with our internal teams, defense strategies at countries, etc. And coming out with our revised marketing plans to capture projects on those countries. As and when we capture any project, we will definitely immediately come back to you that this we have got right now. These are again leads are opportunities for us and we are working hard to convert them into orders.
Atul Tiwari
Okay sir, thank you. Thanks a lot.
operator
Thank you. Next question is from the line of Jyoti Gupta from Nirmal Bank. Please go ahead.
Jyoti Gupta
Thank you so much, sir. Great set of numbers. My question is, of course you’ve been a defense PSUs. The lineup of orders will never be. An issue for you and you will continue to have very large orders. But my first question is in terms of margins, we have seen a sudden jump by 4% on a year on year basis. Any specific reason that we see this. Margin which has happened? And the second thing is that while. I understand a lot of procurement orders. Will be finalized in the next seven. To eight days even if they were not there. Without that we could we manage similar margins going forward if there was no such emergency situation or any of that sort. And why was other expenses? I mean there was a sharp decline in terms of raw material and other expenses in the fourth quarter on A yoy basis. Could you please explain that?
Damodar Bhattad
Yeah, there’s margins increase. What you are telling in the beginning, it’s purely due to the scale of operations. The scale of operations was higher which led to the increased margins. So material consumption remained around 55% as was in 2324. The same was in 2425 also. So the material consumption being 55% the scale of operations led to increase in EBITDA margin. As far as the current year margins are concerned. We’ll give the guidance at the end.
Jyoti Gupta
Okay.
Damodar Bhattad
Other expenses reduction. You had asked other expenses. Last year we had a provision for intangible assets of 96 crores. So which was not there this year. So that led to the reduction in other expenses. Other things more or less were constant. Normal increases were there as it is for the scale of operations because of one intangible assets provision which was there in 2324. So due to that the other expenses got reduction. It has got reduced.
Jyoti Gupta
Okay. Other thing is in terms of as an integrator you said so one is you said you will have for subsystems. And then you’re also looking at integrated. Becoming integrated for some of the procurement platforms. Now my question is if you were. On the how this is irrespective of whether the orders are there or not, but on a general basis on a basic scenario, if you are on subsystems and we move to an integrator, how does that really improve by margin?
Manoj Jain
The thing is, when we are subsystem fellow subsystems are generally homegrown. So we have definitely good margin for that. System indicator role is a bit different and challenging because he has to take care of creating all these subsystem and delivering the required result. The system integrator generally the direct order. So from order book point of view, being a system integrator is definitely it will affect or it will improve my top line. But subsystems which are there, which will come anyway whether I am system integrator or not will make my top line reasonably okay. But definitely my bottom line is more better with subsystems.
So subsystem and system both are required for Bell and especially Bell type of a company only can play the role of system integrator because that challenges at system integration are of totally different variety. Different type of experience are required. Different type of integration skills are required in addition to project management skills. So that being a last 70 plus years in this field, we know all the present system, future system, legacy systems, those system integration and overall project management for these type of large projects which Covers multiple technologies like radar technology, ammunition technology, missile technology and control systems GUI’s.
They are different type of some 10 to 12 different technologies are there. Bel is luckily working in all those technologies. So we can give much more, quicker and better system integration experience to our defense users. So that’s why generally for these complex systems, first choice is typically Bell. But wherever they have not selected us, we are trying for that. Some of the cases as a strategy. If they want to become two system integrators then they will select definitely based on our Bell’s experience of last 70 years and all large system projects which we are handling presently also.
So if they give competition, we are hopeful definitely we will be one of them. But that call different, different user directorate or drdo. They will decide whether they want two system integrators or single system integrator. Personally I feel single system integrator is the right choice. Because you can’t develop system integration capability at two different parallel places. Because that challenges and then synchronizing these two system integrators may be a tough call. But that call I leave it to users or our DRDO friends to decide. Because we will not come into that we are capable of being system integrators that only we are telling and we are hopeful to to be system integrator for all these bigger larger programs.
Jyoti Gupta
Thank you sir.
operator
Thank you. Next question is from the line of Sumit Bhatnagar from LIC Mutual fund. Please go ahead.
Sumit Bhatnagar
Thank you sir for this opportunity. Sir, my question is regarding project Kusha. Any timeline when we can accept expect this order FY27, FY28.
Manoj Jain
You know it is still in R and D phase. So R and D phase. We can’t predict the overall trial times. You know how much time it takes for different type of terrains, testing and validation by the users. I hope prototype will be available for all these things in next 11 and half years total time frame. Because we are only developing majority of the subsystems for that the next one one and a half years it will be available.
After that. Typically for these type of systems it may take around 12 months to 24 months of trial. Sometime it takes even 36 months also. So we. This program is driven by DRDO DRDL. So we will write support to them so that they can compress their timelines. But exact timelines of the project. It is better that you ask DRDO only in some different forum. Because right now we are only giving total development support to DRDO because the program is driven by drdo.
Sumit Bhatnagar
Okay, thank You. So that’s it from my side.
operator
Thank you. Next question is from the line of Devesh Lakotia from Ikigai Asset Manager. Please go ahead.
Devesh Lakotia
Yeah, hi. So congratulations firstly on a weighted number. My question was again on the margin side just wanted to check while you have highlighted that margin improvement is partly on account of operational in increasing scale of operations but is there so a. Couple of things on the margin side. Is there particular segments or particular products. That where you earn better margins compared to others. Or as the margin profile at the contract signing stage itself increased over the past few years? From a continuity standpoint is it fair to assume that obviously guidance you will give later but is it fundamentally higher. Margins that we are looking at as a company?
Damodar Bhattad
So as we told the scale of operations, purely the scale of operations led to the increased margins and as you yourself told that the guidance for the current year will be given at the. I mean end of the call. So that’s what I would like to tell on the margin front and as far as your question on whether you’re on the contract signing stage and segment wise these type of information generally we do not tell about which segment what we earned because segment wise information we. Do not give just I wanted to add two more lines in that these margins are going to increase further I can assure you because we are doing real rigorous indigenization of the various systems subsystem and even at component level through directly by bell or by involving all our industry partners including MSMEs and startups. And of course many of the subsystems are in house developed like you have seen latest Akashtir program, more than 90% indigenous content was there and most of the subsystems of this were made in house. So this in house development meeting the exact requirement and indigenous drive these two will definitely take margins higher and higher.
That much I can assure you.
Devesh Lakotia
Thanks Anu.
operator
Thank you. Next question is from the line of Ranodeep s from MAS Capital. Please go ahead.
Ranodeep
Thank you for the opportunity sir. If I’m not wrong, till now we have released five lists of embargo any expectations for any sixth list being released and is bel slated to capture that market share? Thank you.
Manoj Jain
The PIL list you are referring I believe the positive indigenization list which not importing them. So we are there in all the PILs because majority of the systems directly indirectly have defense electronics or systems in mind. So we are there. We are developing so many solutions as part of PIL125 and some of the solutions we are working jointly with our Other ecosystem partners. So PIL6 whenever will come definitely it will help Bell because Bell main motto is indigenization or developing the systems and solutions indigenously. We are born for that mission only. So all PILs are directly indirectly will definitely help belong.
Ranodeep
Sure, sure. Thank you for that. Sir, can you share some thoughts around we did see a post that around 299 patents BEL has now under its pocket. So is there a school of thought around monetizing it in the future or what is the guidance around it?
Manoj Jain
Let me tell you our first aim of filing these patents was to protect IP because this is a defense IP so this IP should be protected. The first aim was to protect that. But as you have told yes if somebody comes for using this or commercialization of these patents, if some real needs are there then we should commercialize that also. But that is a slightly more involved process. We are in the process of finalizing the ecosystem for that because first thing is we should have a transparent way of valuation, IP valuation we call it. So that should be done because I should know what is the price of this.
The price and price benchmarking has to be done for these patents. We are in the process of finalizing one or two agencies who can do this job for us and once that is done then only we can go and offer it to somebody who is interested in that. So today it is a bit early for me to tell how quickly I can commercialize the my patent. But main aim of patent was to protect the ip.
Ranodeep
Sure, sure. So one last question and pardon my enthusiasm here. If I see the last 10 year sales growth is at 12% and last 10 year profit growth is 15% this has led to an amazing 27% growth in the stock. Any guidance in terms of where do you see the revenue growth in the next five years?
Manoj Jain
Okay again that is I am also highly optimistic so I can tell you the growth what I want to have. Definitely it should be minimum 15% so 15 to 17.5 and after five years we want to touch even 20% but right now it is 15 to 17.5% growth what I am looking at and I am confident we will definitely achieve it in next five years. And about profit also as you have told it was 15 and now we are giving consistently more than 20%. So we are hopeful once this indigenization and lot of in house developed products based on our in house R and D strengths, products and solutions are there which are meeting users aspirations.
So definitely it will be definitely more than 20 so first figure will be more than 15 to 17, second figure will be more than 20. So what you have told 27 will definitely become more than 30 to 35% for you. We are hopeful for that in next five years you will see we are working towards that. How much we will achieve that, God only knows. We are only putting efforts for achieving that and we are hopeful for that because of the overall ecosystem which is there. Overall strengths which we have acquired over a period of time, especially our in house strengths, working with academia, working with startups, working with other MSME and other stakeholders in this domain.
So collaborative, working even with our competitors. Also we are doing now on larger scale. So with these type of strategies, I’m confident we will achieve. We want to not only meet your expectation, we want to exceed your expectation. That is all what our whole team, team Valley is continuously doing and we will not disappoint.
Ranodeep
You really appreciate the response and the long responses. So thank you so much and wishing you all the best and helping India stay safe. Thank you.
Unidentified Speaker
Thank you.
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 question to only one question per participant should have a follow up question. We request you to rejoin the queue. Next question is from the line of Deepak Krishnan from Kotak Secure Institutional securities. Please go ahead.
Deepak Krishnan
I just wanted to understand just one thing on the margin front. I know where you give the guidance at the end and you indicated scale. But if you look at this year also we are doing system integration lrsam which would sort of be the biggest, you know, revenue contributor. So in spite of, you know, doing much more higher system integration, we are seeing much higher margins at a gross level. Even, you know, the last, over the last three, four years, what the numbers have been. So is there anything else that we should be aware of that from even at a gross margin level, as we go ahead and do QRSAM and some of the other system integration projects in addition to indigenization, we are seeing this, you know, huge gross mountains.
Are there any thoughts over there.
Damodar Bhattad
The graph? This margins, whatever you are talking of, it’s not only LRSAM we are doing, we are doing many, many product systems across all the SBOs. So what we get is a result of combination of factors. So there are some with little lesser margins, there are some with better margins. So all this combination of factors is what decides the final margin. So it’s as rightly said in the beginning we do system integration also and we also develop subsystems, modules we sell subsystems and modules levels also. So with this combination we are able to arrive at this margins, individual margins.
As I told, we will not be able to comment on that.
Deepak Krishnan
Sure. Just one question. On the 27,000 core guidance, the emergency procurement will be above and beyond that, right? Whatever we get from that that is not included in the core.
Damodar Bhattad
What you are talking? We are talking of 27,000 figure as an all inclusive figure. 3300 of this has already been received. Balance 24,000. Whatever we expect to receive in the current year of course it is excluding qsm.
Deepak Krishnan
Okay, those are my questions. Thank you.
operator
Thank you. Next question is from the line of Manish Ostwal from Nirmal Bank Securities. Please go ahead.
Manish Ostwal
Yes sir. Thank you for the opportunity and most of the question answer already have. I have only one question. In terms of achieving the growth of 15 to 17% over the next four to five years what kind of investments. We are making into in terms of. Capex and secondly R and D efforts. Can you talk qualitatively on these two aspects? It will be great help for us. Thank you.
Manoj Jain
As you know, as you have rightly told once we have to have better growth then we should have good products and good infrastructure. So both are required. So as you have told we are investing on both fronts. Whether it is an R and D front or whether it is in Capex front. Capex front itself. I think this year you might have noticed we have increased our investment. I think last year it was around 600 plus crore. This year it was more than 900 crore. And next subsequent years we have a really good growth plan. I can assure you it will be more than 1000 crore per year.
We are going to invest exact values. We will tell you from time to time. But it will be more than 1000 crore per year is the investment in capital we are looking at. We are having plans of making new factories at important locations in India which will be. Some of them will be even bigger than our present establishments. So we are investing heavily and we will going to invest heavily on bigger infrastructure in addition to smaller infrastructure like product support centers and other infrastructure for serving our users better. But the big manufacturing setups, two or three are already in the pipeline which are going to be inaugurated very very soon.
But two or three bigger investments which are actually larger than our present two big factories. You know, our biggest factory is in Bangalore complex in Bengaluru and the second one is in Ghaziabad. So we are planning to have bigger than these two units, more units in future in Next two to three years or maximum four years we will see that we will start operations in those new locations also. So that will take care of this year. On year growth of 15.17.5 and beyond R and D also same way we are already scaling up. You will see further big big programs, big R and D investments done by us.
Not only on the revenue side on manpower front also. So this year itself I think we are investing in R and D manpower alone around 700 to 1,000 engineers. So that we can take up much more challenging and big programs. Because as you have seen now we are not only at subsystem level we are at system and solutions level. Company like the latest Akashir program we have seen or Akash program or IECCS program or BSS program. These all program requires lot many software and hardware engineers when we are developing it majority in house also. So we are investing on R and D manpower, R and D infrastructure, R and D projects jointly with the industry partners as well as capex related big infrastructure investments.
So all these once we are doing I am confident that we will achieve this type of growth which I have indicated.
Manish Ostwal
Thank you sir. Thank you.
operator
Thank you. Next question is from the line of Dipen Vakil from Philip Capital. Please go ahead.
Dipen Vakil
Thank you for the opportunity and congratulations. On a great set of numbers. So my first question is is it possible for you to give a order book breakup with respect to key projects that are currently outstanding in your order?
operator
Certainly. Certainly the biggest order book right now is LRTHEM then him Shakti Akash Army D29EW system LRUs for our LCA 83 aircraft, the BSS project, the ADCRs Akashtir project, the Arudra radar which we received last year. So these all are planned to be executed mainly this year. Overall we have around 71,000 plus crore of order book which is having so many items which are lined up for next two years typically two to three years. And out of that what I just now told you are to be executed this year. So we already planned all these major programs how we are going to execute and that’s why we are confident we will give a good growth.
Dipen Vakil
So on the percentage front these large projects would constitute construe the how much percentage from your total order book.
operator
Which last project at a large project for this year execution or total Overall order. Book wise the top 12 projects constitute about 40 40%. 40% of the order book is from the large projects.
Dipen Vakil
Got it. So and so what would be your defense and non defense slate for FY25 on revenue.
Manoj Jain
Okay. It will be around 92 to 93% difference and remaining non defense.
Dipen Vakil
Got it. Sir, thank you so much for answering my questions and all the best. 5.26.
operator
Thank you. Next question is from the line of Raj Rishi from dcpl. Please go ahead.
Raj Rishi
Yeah, like the non defense part, how much do you see as a percentage of turnover in 3 years
Manoj Jain
non defense presently as I told is around 6, 7% and when this EVM related execution are there that is typically becoming 12 to 14% also we have touched typically 15% up to 15% we have touched earlier but we are focusing on other non defense avenues also. So our aim is without EVM also we want to cross 10% immediately and in longer run it should cross 15 plus percent in non defence. And sir, Europe is significantly ramping up its defence budgets.
Raj Rishi
Do you expect BL to benefit from that?
Manoj Jain
Definitely. As I told some of our products, arms and ammunition fuses etc. We are planning to supply to them. But one more thing where we are looking at them is lot of contract manufacturing. This quality contract manufacturing for aerospace and defense which we are doing that we are thinking that much more scaling up will be possible for that. Because knowing their manufacturing constraints and knowing our infrastructure and our quality consciousness which we approved beyond doubt to them. So they are coming up with so many systems and subsystems to manufacture in India also for their global requirements.
So we are working on both the front and so your views on like the perception is that post Operation Sindhur Combat tested Bharat Electronics products you mentioned in our Twitter handle also there’s a game changer for the profile of Bharat Electronics. Do you what’s your comments on that? The thing is we are working for last at least 20, 25 years on all these technologies especially the Taxi3i programs or the large missile programs. We are working on all these things we are supplying to our users first time it has been used in a war like situation.
So practically how it is used that gives us much more confidence and our users also much more confidence on complex technological solutions which we have made for them. That perception of them will not only improve our order book from Indian users but definitely it will help us to export some of these solutions or variant of these solutions to various countries worldwide. So that is our aim. So we are hoping for getting good export order book from these technology which is now proved their efficacy in the real world type of situation.
Raj Rishi
Right. And so last question. What’s What’s your expectation on the drone and this One drone front how and and Brahmos how are you involved in these two projects?
Manoj Jain
Brahmos we are involved in some two subsystems right now. I will not tell you the exact scope of those things but definitely we are there in Brahmos I can assure you. Is it significant sir changing our scope of work or contribution in Brahmos but as you know lot many requirements are coming up not only from India, from other countries also. So Brahmos Aerospace also has approached us for doing right investment to see that large quantities how we can support them.
We are in constant discussion with them. We have come out with plans to manufacture and even design some of the next generation subsystems for them and you will see much more contribution from us from for Brahmos also Akasho anyway you know we are working yeah same thing is on drone also drone front also some 45 important drone related activities we are working and drone warfare is integral part of our present C4I solutions. Like you have seen Akash Tir or BSS or other program ISECs there is a drone warfare modules in all of them but we are working on making it next generation because as you know drone related technologies keep on changing so our drone warfare also should be always better and better.
So for that we have tasked our software teams or our taxi three teams to come out with the better and better drone warfare solutions using this latest technologies of AI. So that work already we have started for that. Okay and so last question there were some reports that from 5G when we go to 6G it’s going to be a game changer for dev tech. So like view on Bharat Electro impact on Bharat electronics pick 5G to 6G for telecom or which one you are referring like generally if the spectrum goes from 5G to 6G for Dev Tech Def Electronics a company like Bharat Electronics is going to be a game changer.
Any what’s your comment on that? And whenever any new technology comes there is a scope of getting newer and newer orders. So this sixth generation technologies for telecom especially and networking that we are already started working with our TRLs you may be knowing we have central research laboratory so they are looking at all this technology how to use them and adapt them for defense needs. So we are investing on those fronts in our research community and definitely every new technology I can tell you will give more and more business opportunities for companies like Bell who are there in defense electronics which are staying because of the technological advancements.
So any new technology gives us lot of opportunity. We don’t see Technology as a threat. We see a new technology always as an opportunity.
Raj Rishi
Okay, thanks a lot, sir. Thank you.
operator
Thank you. Next question is from the line of Karan Gupta from Kisit Mehta. Please go ahead.
Karan Gupta
Hello.
operator
Yes. Please go ahead.
Karan Gupta
Is it audible?
operator
Yes, sir.
Karan Gupta
Yeah. So. Good morning. Sir, my question is limited to first of all on the revenue side this quarter. Is it some lack of execution this quarter only compared to essentially previous quarters and last year.
Damodar Bhattad
No, we couldn’t get your question fully. Can you repeat?
Karan Gupta
Yeah. Is there any lag of execution this quarter? They reported six and a half percent of growth this quarter compared to sequentially quarters and last quarter.
Damodar Bhattad
No. Are you talking of lack of execution or what?
Karan Gupta
Yes. Yes.
Damodar Bhattad
Overall we had given a year on year guidance growth of 15, revenue growth and we have achieved 16%. As we have told earlier. Also there are some variations which happens due to the nature of products, nature of systems. But overall our revenue guidance was 15% and achievement has been 16%. Cutter on cutter variations are there which you have earlier also told in the confault.
Karan Gupta
Okay. The other income side which is, which has been now the part of your EBITDA 10 11%. So one is the other income last two years which is increased significantly. So what is the other income part?
Damodar Bhattad
Other income part is not counted for the EBITDA margins. Only the production is counted. Other income is not a part of EBITDA margin part of it. Let’s take it that way. EBITDA margin is what? What is E E margin?
Karan Gupta
Okay. Okay. I’m just asking what is in this other income? What is increasing last two years?
Damodar Bhattad
What. What is there in the other income? Is the main, the interest income on term deposits, what we get dividend income, interest income. These are the other incomes.
Karan Gupta
Okay. And just last one, on the working capital side, the receivables have increased this quarter. The operating cash flow is comparatively significantly lower than last year. So do we have any problem on the receivable side? Will it recover next year or this year? FY26 fully.
Damodar Bhattad
There is no problem on the receivable side. The operating activities, cash flow from operating activities. What you are telling significant reduction. It’s just a reduction due to the order. Some of the orders getting into the next year. What we thought will come in the previous area, we got 18,000. So some spillover was there as we had given in our first week of April guidance that some 5,000 crores negotiations were finalized and it had got spilled over to the next year. So that was what say that is what led to the reduction in Cash flow from operating activities.
Otherwise there’s no challenge on the receivables front. And overall the difference is only 5, 6 days from compared to last year. Which is because of the slightly increased sale in the last quarter of the current year.
Karan Gupta
Okay. Okay. And how much outsourcing we do from local manufacturer or some small companies and small businesses.
Damodar Bhattad
See generally our MSME procurement is in the range of 30%. Total procurement may. Our MSME procurement is around the range of 30. I don’t have the exact number for 24, 25 but it remains in the range of 35%. Actually. 35%. What we can consider from for the overall order book if we are executing let’s say 1000 crore of some project. Overall domestic procurement 35% comes from MSMEs.
Karan Gupta
Okay. Okay. Thank you. Thank you.
operator
Thank you. Next question is from the line of Nikhil Prohit from Fredent Asset management. Please go ahead.
Nikhil Prohit
Hi. Thanks for taking my question. Just one question. I wanted to understand what products capture higher margins. I’m aware you don’t give out individual numbers. And I don’t want the margins for each product just the products which are margin accretive for the company. That’s it. Which. Which of them?
Damodar Bhattad
You. You ask the question straight or you ask this way. It doesn’t make much of a difference. You tell high mar automatically. The others are low margins. So it really doesn’t make a difference. You don’t ask margin product wise or you tell of the higher margins. So all we tell is we don’t give segment wise margins. We don’t tell product wise margins. We talk only of the overall margins. Definitely there will be some high margin, some low margin. All these combinations are there. There are more than 200, 300 products and services we are offering. So there are combination of factors and overall margins is what we give the guidance for.
Nikhil Prohit
Got it sir. Okay. Thanks.
operator
Thank you. Next question is from the line of Harshit from Elara Capital. Please go ahead.
Harshit
Hi. Thanks for the opportunity and congratulations for good results. Sir, I have two questions on the order inflow side. Since you mentioned that there is a risk that it can spill over to April May. Is this because now this year we are having emergency procurement and the budget is around 1.8 lakh. So is it they have to extinguish this budget. Earlier EP was not part of this spending. So because of VP spending coming in some order may be pushed to the next year. Is that a worry for you? And secondly if you can share some details on the counter known system sir which has been Applied has this been used in the conflict which happened? And you are expecting any orders coming from the counter system. Thank you.
Manoj Jain
Okay firstly let me tell you this QRFM which I was expecting may go to next year not because of the budget. I feel budget government of India has allocated enough and this year also as you might have seen the Nvidia report 40 to 50,000 crore additional budget also they are giving. So I don’t see budget as a problem. QRSM is a very very big program and lot of internal processes are there. Negotiation rounds will be there, Scope of work will be there. The thing is it is jointly progressed for Indian army and Air force.
So those type of procedural challenges only I am seeing which we can’t predict the timelines. That’s why I told it may be last quarter of this year or first quarter of next year. We are expecting that to happen. But no way it is not related to budgets it is related to process related time it takes for such a large program. I can tell you it will be the largest program once we receive it. What well has received. Because till now I think we have received largest order book of single order of around 8 to 10,000 crore only.
So this is 30,000 crore. So definitely a lot of paperwork, lot of processes has to be followed by all for that. So that only I am expecting it may take this much time seeing the size of the business for this. Understood. And overall size of the QR SEM is 60 right? And you are only getting the first in the second regiment as in 30,000. Is that a correct understanding? No no no no no no no no. I never told that last year also we made it clear the first order of Indian Air force and Indian army will come to Bell because that is a combinedly processed and they are nominating Bell as a production agency.
It was already nominated Bell as a production agency. So this first order combined order of these is around 30,000 crore. That order we are confident to get it after that next order when they will place. I don’t know that maybe because of the success of the first order they will wait or what? That is a government has to tell Right now government is processing the first order first biggest order and later on only subsequent orders may come. But this first order we are hopeful to get 100% to Bell only no other fellow. And regarding counter drone system it is used.
It has used its effectiveness in the recent ops. Sindur you have seen through media reports also we had supplied these systems to army, Navy and Air force and it has performed very well. At all the three fronts. In addition we have got recently order from BSF also for that and recently one more order from army we have got a few days back and we are hoping to get some more repeat orders for this because it has proved its efficacy in the field conditions and user is happy so user is recommending it for repeat order. So we are hoping to get a few more repeat orders of this counter drone system and
Harshit
you have soft scale and hard scale both or you are only into soft, sir?
Manoj Jain
No, we are into both and this particular counter drone system which you are referring has both the features hard kill and software Although we have some solutions which are only soft skill also.
Harshit
understood any quantum of per size or release like 50 crore, 100 crore this counter drone system would be approximately you might have seen a Recently we have published oh okay.
Manoj Jain
We have not given that detailed breakup but a good counter drone system rough value only I can tell you is around 50 to 25 crore is a good with hard kill soft kill both combination is around that range depending upon the configuration and spare and other support etc the value may vary but it is of that magnitude.
Harshit
Understood sir. Thank you. Thank you very much for answering all the questions and wishing you all the best sir. Thank you. Thank you.
operator
Thank you. Next question.
Manoj Jain
I think we can wind it up because it already passed 11. Just see if one or two more questions afterwards we should wind up please. This is our request.
operator
noted sir. Next question is from the line of Khush Nahar from Electrum pms. Please go ahead.
Khush Nahar
Yeah. Hi sir, thank you for the opportunity. My question was regarding. I think recently we have won some orders for our software defined radios. So could you elaborate more on what. Kind of opportunity we are seeing in. This in terms of maybe early requirements or the opportunity over the next three to five years? And what is the competitive landscape over here? Is it an in house technology or are we lead integrators for this product?
Manoj Jain
The SDR software defined radio is a technology in IT itself. So all the radios in the field, whether it is there with army, Navy or airport are being replaced by sdr. So as you have told competition is there or not. For naval programs we are supplying I think some five different type of SDRs and for those we are the single vendor because we were the first one to develop these jointly with our DRDO friends and some other industry partners and we were the production agency for that because SDR is a complex technology in itself. So all the naval programs we are the single vendor you can say and we are supplying large numbers and recent order of last I think few months back we got around 1000 plus crore order.
That was for SDR Navy versions only. Regarding other services like especially for the army where we have supplied all their tactical radios. Right now majority of them are from Bell. A few were imported also when Bell products were not there in between timeline so they were there. These all have to be replaced by now Indigenous SDRs. So we are expecting of the order of roughly around 40 to 50,000 numbers of these SDRS for army in years to come. And for that we are one of the leader. But definitely there will be some competition from other players.
But today for one of the DRDO program we are the nominated production agency. And that SDR also has come up very well. We are soon expecting big orders for that. And parallel also we are developing other form factor SDR where there is some competition. But knowing our strengths and knowing our success for our naval and other projects of SDR we are confident that more than 80 to 90% of those orders or maybe best case 100% of those orders also will come to Bell.
Khush Nahar
So if you could help me with maybe into some rupee crore in terms of pipeline for the next three years or five years. Whatever visibility we have.
Manoj Jain
The order book new order inflow in next three to five years will be sufficient to make our company grow more than 15%. I can assure you we are targeting around 17.5. 15 to 17.5% of growth in next five years. As I already indicated we are confident our order book will be more than that.
Khush Nahar
Thank you for the answer but I meant about the hdr. The SDR pipeline that we are seeing. In terms of rupee crore.
Manoj Jain
Okay. SDR for naval front. I think we have got order worth around 2 to 3,000 crore roughly in last few years. We are expecting From Navy another 2 to 3,000 crore in next few years. But biggest numbers will come from army where as I told you now 40 to 50,000 numbers roughly SDR they will be requiring immediately. So tentative cost of 1 SDR I can guess is around. Depending on again the configuration 10 lakhs to 20 lakhs to 30 lakhs. So 10 to 30 lakhs I am expecting for SDR you can take average of 20 lakhs.
So 20 lakhs into 40 to 50,000 is what the volume expects or business volume expected of this sdr.
Khush Nahar
Right sir. Thank you.
operator
Thank you ladies and gentlemen. That was the last question of the day. I now hand the conference over to Ms. Renu Beit for closing comments.
Renu Bed
Thank you. Thank you everybody for participating patiently. Before we close the call, I would. Request Ashi Manoji to kindly reiterate the annual guidance of fiscal 26 and then we can close the call with his closing remarks. Thank you. And over to you, sir.
Manoj Jain
Okay, so our guidance for financial year 2526 is revenue growth around 15%. EBITDA margin around 27%. Order inflow more than rupees 27,000 crore. The R and D investment definitely we want to increase. But it will be of the order of 1600 crore and beyond. And capex as I told, more than 1,000 crore. And defense to non defense business, typically we are expecting around 90 to 10 ratio. So these are our guidance for year 2526.
operator
Thank you on behalf of IIFL Capital Services Limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Unidentified Speaker
Thank you. Thank you all.