Industry profile: The Defence industry of India is a strategically important sector in India. With a strength of over 1.3 million active personnel, it is the world’s 3rd most significant military force and has the world’s largest volunteer army. The total budget sanctioned for the Indian military for 2015 is 2.47 trillion Indian rupees ($40.07 billion). Govt of India is one of the prominent investors with some private companies like L&T, Reliance Naval, Ashok Leyland Tata group companies like Part of tata Power, Nelco (TATA DEFENCE) Tata motors Defence wing, Astra Micro also present. But govt companies like DRDO with a US$1.6 billion budget, Bharat Electronics with US$1.1 billion revenue, and Hindustan Aeronautics ( IPO Expected soon with more than US$2.8 billion revenue). Before 2011, the sector was all in the hands of the Government of India. Today FDI is permitted in the industry at 49%. The NDA government, in its first year, cleared 39 capital procurement proposals, of which 32 bids worth ₹889 billion (US$14 billion) (or 96% of the value of total offers) were categorized as Buy (Indian) and Buy and Make (Indian)—the top two prioritized domestic industry-centric procurement categories as per the Defence Procurement Procedure. In July 2015, the defense ministry eased export regulations and stopped demanding multiple assurances on end-use from foreign governments, even for selling components by Indian entities.
Company Profile: Bharat Electronics Limited (BEL) was set up in Bangalore by the Government of India under the Ministry of Defence in 1954 to meet the specialized electronic needs of the Indian defense services. Over the years, it has grown into a multi-product, multi-technology, multi-unit company.
The company has a diverse product range under defense for communication, radars, naval systems, optoelectronics, Electronic Warfare systems, weapon system, tank electronics, and simulators. It also offers products in the area of switching equipment, TV and broadcast, DTH, telecom, computer, electronic voting machines, and electronic components.
The company holds customers not only from the defense sector but also Paramilitary forces, Radars & Sonars Indian Defence Services, Civil Aviation, Meteorological Department, Space Department, Telecommunication Department, Power Sector, Oil Industry, Railways, All India Radio, Doordarshan, Police, State Governments, Public Sector Undertakings and many more.
BEL exports its products to countries like Indonesia, Egypt, Switzerland, Botswana, Surinam, Malaysia, Russia, Brazil, Sri Lanka, Nepal, Israel, South Africa, UAE, Uganda, Turkey, UK, Azerbaijan, Germany, Zimbabwe, Kenya, Nigeria, Canada, Belgium, Italy, France, Malawi, and Mauritius.
Shareholding Pattern: BSE Data
Financial and Ratios : [table id=83 /]
Prospects: Defence is one crucial sector for govt expenditure, and govt is planning to make it big. Make in India is best for companies like Bharat Electronics. Fundamentally the company is strong, but in 2017 the stock did not perform. Election in 2018 and 2019 is also one big boost as the company is the leader in EVM manufacturing. So expecting it to be one of the best performers.
