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Informist, Monday, Jul. 27, 2026

 

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--Bharat Electronics: Apr-Jun EBITDA margin at 25.83%
--CONTEXT:Comments by Bharat Electronics mgmt in post earnings investor call
--Bharat Electronics: Order inflow INR 37.54 billion in Apr-Jun
--Bharat Electronics: Product mix impacted Apr-Jun EBITDA margin
--Bharat Electronics: EBITDA margin in Q1 not impacted by input costs
--Bharat Electronics:Mkt for drone, counter drone pdts growing exponentially
--Bharat Electronics: Co more focused on hardkill based large drone systems
--Bharat Electronics: Collaborating with private players in missile business
--Bharat Electronics: Top 7-8 pdt orders around INR 200 bln in order book
--Bharat Electronics: Rapidly increasing indigenisation for input materials
--Bharat Electronics: Supplied enough electronic modules to HAL for Tejas
--Bharat Electronics: Large platform orders to give turnover after two years
--Bharat Electronics: More indigenisation gives co more EBITDA margin gains
--Bharat Electronics:Wage hikes to take place in Jan, impact from Q4 onwards
--Bharat Electronics: Not seeing any pressure from raw material costs ahead
--Bharat Electronics: Retain 5-year aim to obtain 10% of sales from exports
--Bharat Electronics: Retain FY27 revenue growth guidance at 15%

 

By Rajesh Gajra and Adhithya Aji

 

MUMBAI – Bharat Electronics Ltd.'s earnings before interest, tax, depreciation, and amortisation margin, which contracted to 25.83% in the June quarter from around 28% in the year-ago quarter, was due to product mix variation and not due to input cost pressure, the management said at a post earnings conference call with investors Monday. The product mix variations are, typically, what causes the EBITDA margins to have a variability of 25-31% from quarter to quarter, according to Manoj Jain, chairman and managing director of the company.

 

But at the end of 2026-27 (Apr-Mar), "let me again assure you, we will cross 28%," he said. The state-run electronics company, currently catering mostly to the Indian armed forces, has retained its EBITA margin guidance of 28% for FY27.

 

The company does not foresee any pressure from raw material costs going ahead, Jain said. The company also continues to hold its guidance of INR 22 billion of research and development spends for FY27 with a major focus on indigenisation of input materials.

 

To a question on whether research and development spends will hit the company's margin, Jain said, in the company's more than 50 years of experience, it has received good returns from research and development expenditure. The current goal is self-sufficiency in technology, and "more indigenisation gives us more EBITDA margins," he said.

 

Jain also said the company was retaining its revenue growth of 15% for FY27, and an order inflow guidance of around INR 550 billion for the year. In the June quarter, Bharat Electronics had a lean order inflow of INR 37.54 billion during the June quarter.

 

The orders for the company from the Indian Army's quick reaction surface-to-air missile programme, did not materialise for Bharat Electronics during the June quarter. The company is expecting to receive large-value order from the Defence Research and Development Organisation on its new extended range air defence system, popularly known as Project Kusha, according to the management.

 

"We are their largest DCPP (development-cum-production partner) for various subsystems. So, right now, the trial was of the missiles. Then after that, they will do different configuration of missiles, then configuration with radar control centre," Jain said.

 

The managing director said there was no delay from the company's side in extending subsystem and system level support for the Kusha project. "As already told, I think the order will be of the order of Rs 40,000 plus crore (over INR 400 billion) we are expecting," he said.

 

The order book of Bharat Electronics as of Jul. 1 was INR 722.58 billion. The top 7-8 projects the company is executing account for around INR 200 billion of the order book, according to the management. In terms of execution, the large platform orders start giving the company significant turnover after two years and not immediately, Jain said.

 

On the market for drone and counter drone systems, Jain said it was growing exponentially. In this, Bharat Electronics is more focused in "large, high-power, laser-based or microwave-based DEW (direct energy weapon) solutions.... hard-kill-based, more complex systems," he said.

 

On missile programmes, Jain said the company is collaborating with private manufacturers, apart from servicing orders as development-cum-service partner. "In most of these missile programmes, the major electronics, today we are the leader because that electronics is more complicated than a radar or others," he said. This will give the company "enough future business," he said. 

 

To a question on the delay in the delivery of Tejas fighter aircrafts by Hindustan Aeronautics Ltd., Jain said the company had supplied "much more" electronic modules, line replaceable units, than what HAL really wanted. The company has given enough quantities of the line replaceable to them to use in the making of the Tejas aircraft.

 

Responding to an analyst's question on the likely impact of the Pay Commission's provisions on Bharat Electronics' margins over next 2-3 years, Jain said the next wage revision is due in January, and provisions will be made for the March quarter accordingly. The management does not expect the employee cost to turnover percentage increasing, "since the turnover will also be growing in good scale."

 

On exports, Jain said although the company is "having great leads right now" the conversion time to orders is long. The leads are spread across major 15-20 products, he said. It gave the company confidence to meet its goal of having 10% of the company's revenue from exports in the next five years.

 

Jain also said the company intends to incur a capital expenditure of around INR 12 billion in FY27. For the June quarter, Bharat Electronics reported a net profit of INR 10.48 billion, up over 8% on year and down over 52% sequentially. The top line of the company gained over 25% but fell nearly 46% on quarter to INR 55.33 billion.

 

Monday, Bharat Electronics shares ended at INR 407.15 on the NSE, up 0.53% over Friday.  End

 

Edited by Akul Nishant Akhoury

 

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