BEL embarks on Rs 2,000 crore modernisation drive

Firm is in the process of upgrading its facilities and setting up new ones to meet growing needs of modern defence equipment

Government-owned Bharat Electronics (BEL) is embarking on an expansion-cum-modernisation drive to explore new areas in the defence and non-defence sectors.

In the next four to five years, the company plans to invest at least Rs 2,000 crore, to equip itself for new business opportunities.

“In the past five years, non-defence business has been 17 per cent of the overall business and we plan to increase this share in the coming years,” said S K Sharma, chairman and managing director.

Some of the areas identified in defence are SAM systems, electronic ammunition fuses, satcom terminals, LTE, Gigabit passive optical network, routing and switching products, he said. In non-defence, infrastructure protection, air traffic management radar, intelligent traffic management systems, solar power plants and smart city elements are being focused on, he added.

P R Acharya, the finance head, said: “We have a projection for capital expenditure every year. We have a plan for Rs 2,000 crore for the next four years.”

BEL is planning to set up a Rs 500-crore weapon systems facility in Andhra, covering design, development and production. It is expected to be ready in two years, said Sharma. Land acquisition is on in Ananthpur district, he said.

As for research and development (R&D), “We will be investing around Rs 1,500 crore in the next three years, around 8.5 per cent of the annual turnover,” said Sharma.

In 2014-15, it spent Rs 549 crore on R&D, about 8.2 per cent of the turnover as against Rs 467 crore the previous year, about 7.6 per cent of turnover.

Acharya said the company would be funding the expansion and diversification from its own reserves. It has reserves in excess of Rs 7,000 crore and does not need to borrow at this stage.

“The ministry of defence wants to modernise our R&D units to keep pace with the changing trends. We will be investing around Rs 200 crore on upgrading R&D infrastructure during the current financial year,” he said. BEL is upgrading the Microwave Components Facility at the Ghaziabad unit for making microwave modules for the low-level transportable radar project. It has also set up a facility for assembly and testing of Compact Multi-purpose Advanced Stabilised Systems at Chennai.