BEL Q4 net declines 29.5% as export revenue slides, wage cost rises

State-run Bharat Electronics Ltd (BEL) posted a 29.5 per cent fall in its standalone net profit to Rs 5.58 billion in the quarter ended March 2018 owing to slump in export revenues, higher wage cost coupled with falling interest income. 

Total income from operations also declined by 14.62 per cent to Rs 36.08 billion in the January-March period of FY18 as against Rs 42.26 billion reported a year ago.

For the fiscal FY18, while consolidated net profit of the company decreased 6 per cent to Rs 14.31 billion, its total revenue from operations stood at Rs 104.85 billion, a rise of 13 per cent over the same period of previous fiscal.

"Fall in interest income, higher wage cost and more tax outgo were the reasons behind the fall in profitability during this fiscal. However, our sales have grown around 14 per cent last fiscal and we are hopeful of around 15 per cent growth in revenues in the current financial year," BEL chairman and managing director MV Gowtama, said.

The defence PUS has also seen sharp plunge in export revenue to $26 million in the last financial year as against $65 million reported in 2016-17. "We had one order from a client in India which was not delivered and it impacted our exports revenue," he added. The order was in the nature of import substitution which is considered as deemed exports and accounted for in the exports revenues of the company. 

Gowtama, however, added that company's exports order book stood at $92 million as on April, 2018, which included offset order book of $35 million.

"We are betting big on exports and have started to witness some bit of traction in this space. The company is expanding its global presence for executing more exports orders." 

The company, which expects its total revenues to be in the range of Rs 115 billion in the current financial year, will invest around 10 per cent of this earnings on Research and Development. 

The Navaratna company also said that orders related like integrated air command and control system, fire control system, L70 gun upgrade, Akash weapon system, and submarine sonar suite among others were executed during the last fiscal.

"Future thrust areas for BEL includes cognitive and artificial intelligence, machine learning, cyber security, cloud computing and data analytics and image analytics among others," Gowtama said.

BEL, which had supplied 0.2 million voting machines last fiscal, could supply around 1 million machines this fiscal. "We have an order book worth Rs 35 billion coming from voting machines,"he added. 

VVPATs are non-tamperable

Reacting to reports on malfunctioning of VVPAT (Voter Verifiable Paper Audit Trail) machines in the recently held by-elections in Kairana in Uttar Pradesh, M V Gowtama, Chairman & Managing Director of Bharat Electronics Limited (BEL) said that the machines could malfunction due to different reasons but these are non-tamperable. 

"These machines are transported to various interior regions of the country during elections. So, defects may arise due to such transport. Otherwise, these machines are manufactured on the basis of set standards and procedures and despatched after robust-testing," said Gowtama.

Machine failure doesn't mean tampering, he said adding that the debate over use of VVPAT should end now as the it is fool-proof machine without any defaults.