Q1 framed Israel-Iran shock + AI/ML posture.

What are the other bigger pipeline projects that you're expecting this year?

QRSAM is the biggest, but the Next-Generation Corvettes program has 10-12 BEL subsystems coming through one or two L1/L2 shipyards. Shatrughat and Samaghat EW system is expected this year, plus LCA orders from HAL, LRSAM B&D spares, ATULYA radar, Shakti, other GBMES and ADFCR. Worst case some may slip to Q1 or Q2 next year.

What kind of order inflow do you expect this year given INR3,300 crores has already been received, and don't you expect QRSAM order to be expedited given the recent border action?

QRSAM paperwork is being driven fast with a dedicated team and may come by the last quarter of this year. Excluding QRSAM, around INR27,000 crores of additional orders are expected this year; with QRSAM (~INR30,000 crores) total inflows could cross INR50,000 crores in FY26.

Is INR30,000 crores the total size of QRSAM or just our share?

BEL is the production agency for QRSAM, so the entire INR30,000 crores order from users will come to BEL. This combines air force and army total requirements.

On Project Kusha (indigenous S-400) - reports peg the order at around INR40,000 crores, what would be BEL's share?

BEL is the DcPP (Development cum Production Partner) with DRDO and is hopeful of being system integrator; if sole SI, INR40,000 crores would come to BEL, and if two SIs are picked, around INR20,000 crores. Major subsystems including different radars and control centers will come from BEL regardless, but current focus is on joint development with DRDO.

Working capital seems to have deteriorated significantly on receivables, inventory and payables - how do you see receivables and inventory changing over the next few quarters?

Working capital is fairly stable at a current ratio around 1.7 vs ~1.5 historically; receivables and inventory have increased only by 5-6 days versus last year. Government inflows remain good.

Other liabilities saw an INR2,900 crore YoY change leading to net cash from operations falling from INR4,600 crores to INR586 crores - any challenges on receivables?

The drop is because order intake last year had higher advances; this year intake was lower at about INR18,000 crores so cash flow is correspondingly lower. There are no challenges on the receivables front.

On the NGC program, what size of orders could be expected?

NGC orders to BEL will be of the order of INR6,000 crore to INR10,000 crore in aggregate, with subsystems flowing from two shipyards. After QRSAM this should be the largest order this year, though split across multiple subsystem orders and possibly spilling into next year.

What was the FY25 export quantum, and are you seeing more traction post the recent operational success?

FY25 exports were around $106 million, and FY26 target is around $120 million representing 15%+ growth. Recent geopolitical performance is generating leads but conversion takes about a year and execution another 12-18 months; over the next 1-2 years export growth could exceed 20%.

Are you seeing traction for European rearmament given existing relationships in Europe?

BEL's electronic systems, fuses and ammunition are well suited for European requirements, and the team is working on revised marketing plans to capture projects there. Currently these are leads and opportunities being converted into orders.

Why did margins jump 4% YoY, can similar margins be maintained without emergency situations, and what drove the sharp decline in raw material and other expenses?

Margin expansion is purely due to scale of operations, with material consumption stable around 55%. Other expenses fell because last year had a one-time INR96 crore intangible asset provision that did not recur this year. Current-year margin guidance will come at the end of the call.

How does moving from subsystem supplier to system integrator improve margins?

Subsystems are homegrown and carry better bottom-line margins, while system integration improves the top line because the SI gets the direct order. Both are required, and BEL prefers single-SI selection, but it is capable and confident of being SI for all the bigger programs.

On the embargo / PIL lists - any expectations on a sixth list, and is BEL slated to capture that market share?

BEL features in all PIL lists 1-5 and works on these solutions directly or with ecosystem partners. Whenever PIL 6 comes, BEL will benefit since indigenisation is its core mission.

Any thoughts on monetising the 299 patents BEL holds?

The primary aim was to protect BEL's defense IP. Commercialisation requires a transparent IP valuation framework and BEL is in the process of finalising one or two valuation agencies before offering patents to interested parties.

Any guidance on revenue growth over the next 5 years given last 10-year sales growth was 12% and profit growth 15%?

Targeting minimum 15% to 17.5% revenue growth, aspirationally 20% after 5 years, and bottom-line growth consistently above 20%. Indigenisation, in-house R&D and collaborative working with academia, start-ups and MSMEs underpin this confidence.

Is the INR27,000 crores guidance inclusive or exclusive of emergency procurement?

The INR27,000 crores is an all-inclusive figure of which INR3,300 crores has already been received, leaving INR24,000 crores expected during the year. It is exclusive of QRSAM.

What kind of capex and R&D investments are being made to achieve the 15-17% growth target over the next 4-5 years?

Capex was around INR600 crores last year, more than INR900 crores this year, and will exceed INR1,000 crores per year going forward, with two-three new factories planned that will be larger than current Bengaluru and Ghaziabad units. R&D investment is also scaling, including 700-1,000 additional engineers being hired this year alongside R&D infrastructure and partner-led projects.

Can you give an order book breakup for key projects currently outstanding?

Major outstanding projects include LRSAM, HimShakti, Akash Army, D-29 EW system, LCA Mk1A LRUs, BSF project, ADCRS Akashteer, and the Arudhra radar. Out of the INR71,000-plus crores order book, the top 12 projects constitute about 40% and are largely lined up for execution in the next 2-3 years.

What was the defense vs non-defense split for FY25 on the revenue front?

Defense was around 92-93% and the balance was non-defense for FY25.

What is the expected non-defense share over the next 3 years?

Non-defense is currently 6-7% but reaches 12-15% during EVM cycles. The target is to cross 10% even without EVM and 15%-plus in the longer run.

Do you expect BEL to benefit from the European defense budget ramp-up?

Yes, BEL is targeting fuses, ammunition and other systems for European customers, and is also seeing demand for quality contract manufacturing for aerospace and defense components for global requirements.

Post Operation Sindoor, is combat-tested success a game changer for BEL's profile?

Successful field use boosts confidence among Indian users and strengthens BEL's order book domestically while also opening export opportunities for these solutions. BEL is hoping to win meaningful export orders on the back of the proven battlefield efficacy.

What is the expectation on the drone front and on BrahMos involvement?

BEL supplies two subsystems for BrahMos and is in active discussions with BrahMos Aerospace to expand contribution including next-generation subsystems. On drones, four-five activities are underway and drone warfare is integral to C4I solutions like Akashteer, BSF and IACCS, with next-gen modules being built using AI.

From 5G to 6G - is that a game changer for BEL?

Every new technology creates new order opportunities. The Central Research Laboratory has already started work on adapting 6G-class technologies for defense needs - BEL views new technology as opportunity, never as threat.

Was there any execution shortfall this quarter given only 6.5% growth in Q4?

Annual revenue growth guidance of 15% was achieved at 16%, so there was no execution miss. Quarter-on-quarter variances are normal due to product and system mix and have been flagged in prior calls.

Other income has increased significantly in the last two years - what is it composed of and is it part of EBITDA?

Other income is not part of EBITDA - only operating income enters EBITDA. Other income mainly comprises interest on term deposits and dividend income.

Receivables increased and operating cash flow is significantly lower - any problem on receivables and will it recover in FY26?

There is no problem on receivables. The cash flow drop is due to about INR5,000 crores of order negotiations that spilled into FY26 as flagged in the April guidance, and receivables are only 5-6 days higher than last year due to higher Q4 sales.

How much of procurement is outsourced from local manufacturers and MSMEs?

MSME procurement is about 35% of total domestic procurement, in line with prior years.

Is order inflow at risk of spilling because emergency procurement is now part of the INR1.8 lakh crore budget, and any update on counter-drone systems?

QRSAM possible slippage is procedural, not budget-related - government has even allocated INR40,000-50,000 crore additional budget. Counter-drone systems performed very well in Op Sindoor across army, navy and air force; BSF and additional army repeat orders have been received and more are expected.

Is the INR30,000 crores QRSAM only the first regiment with another INR30,000 crores still to come?

The INR30,000 crores is the combined first order for Indian Army and Air Force with BEL nominated as production agency. Subsequent orders are at the government's discretion and timing is not known.

Does BEL's counter-drone offering cover both soft kill and hard kill, and what is the per-system price?

BEL has both hard-kill and soft-kill counter-drone solutions, and the combined hard-and-soft-kill system is roughly INR15-25 crores per system depending on configuration, spares and support.

On the recent SDR (Software Defined Radio) win - what is the opportunity over 3-5 years and the competitive landscape?

BEL is the single naval SDR vendor with five product types and recently won a roughly INR1,000-plus crore order. Army needs about 40,000-50,000 SDRs at an average ~INR20 lakh per unit, where BEL expects 80-90% (best case 100%) share given its proven naval SDR success.

Can you give the SDR pipeline in rupee crore over the next 3-5 years?

Naval SDR has generated INR2,000-3,000 crores of orders historically and another INR2,000-3,000 crores is expected in the next few years. The biggest pot is army at 40,000-50,000 units at average ~INR20 lakh apiece - the order book in next 3-5 years will be sufficient to support 15-17.5% company growth.