Bharat Electronics Limited · NSE:BEL

Bharat Electronics — Investor Presentation (September 2018)

38 slides from Bharat Electronics's investor presentation, Sep 25, 2018

1. Slide 1: Cover letter: Presentations made at Analysts Meet

   mÿcT gdctelfacKl BHARAT ELECTRONICS (Hrra trcft? cm ÿ r, ?an tFRftcm : fÿn Tte, hmnwi 3ftcj? - 560 045, *trct , To, Bharat Electronics Limited National Stock Exchange of India Ltd., (Govt, of India Enterprise, Ministry of Defence) Exchange Plaza, Plot No. C/1,G Block, Registered Office : Outer Ring

2. Slide 2: Presentation on Bharat Electronics Limited

   Presentation on Bharat Electronics Limited

3. Slide 3: Navratna PSU Manufacturing Network

   BHAfiATELfCTPQN/CS Navratna PSU Manufacturing Network • Established in 1954 under MoD • R&D / Technology driven Company operating in competitive Defence Electronics area Panchkula Kotdwara • Manpower: 9726 Employees (as on 31.03.2018) Ghaziabad Subsidiary & JVs Navi Mumbai • BEL Optronics Devices Lt

4. Slide 4: Business Segments

   Business Segments BHARATEl£CTRON/CS 1. Radar 2. Missile System 3. Communication 4. Electronic Warfare & Aviation 5. Network Centric Systems 6. Anti submarine Warfare 7. Electro-Optics 8. Tank Electronics 8. Home Land Security 10 Civilian Products Multi product, Multi technology company – Diverse pro

5. Slide 5: Research & Development (R&D)

   Research & Development (R&D) BHARAT£l£Cr/?ON/CS • 47% Engineering Manpower deployed in R&D • 89% Sales Revenue from Indigenous R&D • R&D investment: Rs. 988 Crs during 2017-18 • CMMi Level-5 Certification for Software development • Largest Production Partner of DRDO • Patents Application Filed – 107

6. Slide 6: R&D Investment

   R&D Investment Value in Rs Crores 988 777 704 549 2014-15 2015-16 2016-17 2017-18

7. Slide 7: Expansion & Modernization

   Expansion & Modernization BHARATRFCTRONfCS 600 Crores annual CAPEX World class Manufacturing & Test facilities • Super Components Facility • Test set up for Missile System • Secured Manufacturing Facility for EVM / VVPAT • Antenna Test Range Facility • High Roof hangar for Radar & Antenna Integratio

8. Slide 8: Expansion & Modernization

   Expansion & Modernization Value in Rs Crores 634 612 525 383 2014-15 2015-16 2016-17 2017-18

9. Slide 9: Expansion & Modernization

   Expansion & Modernization BHARAT£l£Cr/?ON/CS • Advanced EMC Testing Facilities of size 11m x 21m x 30m which can conduct testing of Systems / Platforms weighing up to 70 Tonnes. • Near Field Antenna Test Range (NFTR) facility for calibration and testing of Radars and communication antennas • Establi

10. Slide 10: Exports

    Exports BHARAT£l£Cr/?ON/CS • Dedicated Business Unit & Marketing • Major products exported: Group for Exports • Coastal Surveillance System, CoMPASS, • Achieved USD 26 Million during 17-18 Advanced Composite Communication • Export Initiatives: System, Electro Mechanical parts etc. • Strategic allian

11. Slide 11: Major Orders Executed in 2017-18

    Major Orders Executed in 2017-18 BHARAT£l£Cr/?ON/CS Integrated Air Command & Fire Control System Control System L70 Gun Upgrade Akash Weapon System CAMERA UNIT LASER RANGE DISPLAY OPERATOR MV RADAR BATTER* ELV FEED BACK FlNOEft HAND STATION SENSOR CHARGER fE*" BO* ÿ\t L «£"™« AMPLIFIER AMPuf**

12. Slide 12: Major Orders Executed in 2017-18

    Major Orders Executed in 2017-18 BHARATRFCTRONfCS Weapon Locating Radar Electronic Fuze Electronic Voting Machine Voter Verifiable Paper Audit Trail

13. Slide 13: Major Orders Executed in 2017-18

    Major Orders Executed in 2017-18 BHARAT£l£Cr/?ON/CS 3D Tactical Control Radar Schilka Upgrade HHTI with LRF Battle Field Surveillance System

14. Slide 14: Major Orders Executed in 2017-18

    Major Orders Executed in 2017-18 BHARATEIFCTPON/CS Advanced Composite Communication System Submarine Sonar Suite (USHUS 2) Intercept Sonar-High Frequewy & Under Water Telephone Amy Remote Display Active Array Intercept Sonar Medium Frequency Array Obstacle Avoidance Sour Array Sonar Room Generator R

15. Slide 15: Major Orders Executed in 2017-18

    Major Orders Executed in 2017-18 BHARAT£l£Cr/?ON/CS Ship Based EW System (Varuna) AMU Broad Ba ad BB Filer Receiver Optic I Mc Ground Based Elint

16. Slide 16: New Products Introduced in 2017-18

    New Products Introduced in 2017-18 • Ground Based Mobile Elint System • Lynx U2 for SNF and P15 • Radio on the Move for QRSAM • Advanced Composite Communication System for P15B • Ship Data Network for P16A • Multi Purpose Reflex Weapon Sight • Universal Lab Test Rig for Radar Warning Receiver • Mine

17. Slide 17: Order Book

    Order Book Major Orders Received during 2017-18 • Voter Verifiable Paper Audit Trail & Electronic Voting Machine • Commander Thermal Imager Sights for T72 & BMP • Hull Mounted Sonar for P71 • Low Intensity Conflict EW System • Surveillance Radar Element • Strategic Communication System Major Orders

18. Slide 18: Scenario 2018-19 & Make in India

    Scenario 2018-19 & Make in India

19. Slide 19: Major Projects planned during 2018-19

    Major Projects planned during 2018-19 • Integrated Air Command Control System • Tropo Upgrade • Weapon Locating Radar • Low Level Transportable Radar • Low Intensity Conflict EW System • Commander Thermal Imager Sights • Ground Based Mobile ELINT • Electronic Fuzes • Schilka Upgrade • L70 Gun Upgrad

20. Slide 20: Business Initiatives

    Business Initiatives • Acquiring land at High tech Defence & Aerospace Park at Devanahalli for pursuing business in areas like Satellite Integration, Space Electronics, Unmanned Systems, etc • Engagement with potential Strategic Partners (identified by MoD) in the areas of aircrafts, tanks and subma

21. Slide 21: 'Make in India' Initiatives

    ‘Make in India’ Initiatives BHARAT£l£Cr/?ON/CS • 89% of Sales Revenue from Indigenous technology • BEL is focusing more on core areas and R&D to retain IP, all non-core areas are being outsourced to Indian Industries including MSMEs • Outsourcing and Vendor Development Policy has been released • “Ma

22. Slide 22: Outlook for the Future

    Outlook for the Future • BEL to continue indigenisation efforts in line with ‘Make in India’ initiative • Radars, Missile Systems, Communication & Network Centric Systems, Tank Electronics, Gun Upgrades, Electro-Optic Systems and Electronic Warfare & Avionics Systems to drive BEL’s growth • Establis

23. Slide 23: BHARAT£l£Cr/?ON/CS

    BHARAT£l£Cr/?ON/CS

24. Slide 24: or BHP NTFA

    Ww or BHP NTFA BHARAT FLECTRONICS

25. Slide 25: Financial Highlights 2017-18

    Financial Highlights 2017-18  Turnover registered a growth of 14.28% from ` 8824.70 Crores in 2016-17 to ` 10084.84 Crores in 2017-18.  Value of Production has increased from ` 8715.27 Crores in 2016-17 to ` 9627.67 Crores in 2016-17. An increase of 10.47%.  Operating Profit rose by 11.37% from `

26. Slide 26: Financial Highlights 2017-18

    Financial Highlights 2017-18  Earning Per Share was ` 5.70 in 2017-18.  Book Value per Share was ` 31.85 in 2017-18.  Profit Before Tax (PBT) was ` 1947.84 Crores in 2017-18.  Bonus Share issued at 1:10 in October,2017  Buy Back of 2.04 Crores of equity shares of ` 1 each fully paid-up at price

27. Slide 27: Gross Turnover, Orders on Hand, PBT and PAT

    BHARAT£l£Cr/?ON/CS GROSS TURNOVER (` in Crores) ORDERS ON HAND (as on 31st March) (` in Crores) 50000 10085 8825 40242 7541 6174 6695 32022 23452 21617 2013-14 2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18 CURRENT PROFIT BEFORE TAX (PBT) (` in Crores) PROFIT AFTER TAX (PAT) (` in C

28. Slide 28: Material Consumption and Employee Benefits Expense

    MATERIAL CONSUMPTION TO VOP (In %) 59.00% 56.43% 54.99% 55.45% 53.35% 2013-14 2014-15 2015-16 2016-17 2017-18 MATERIAL… EMPLOYEE BENEFITS EXPENSE TO TURNOVER (` in Crores) 1,772 1,548 1,264 1,257 1,030 18.88% 17.55% 17.57% 16.68% 16.67% 2013-14 2014-15 2015-16 2016-17 2017-18 No. of 9952 9703 9848 9

29. Slide 29: How a Rupee Earned is Distributed

    2017-18 HOW A RUPEE EARNED IS DISTRIBUTED Profit After Tax; 14.53% Tax Provisions; 5.70% Depreciation; 2.61% Other Expenses (Net Materials; 53.35% of Other Revenues); 5.41% Employee Benefits Expense; 18.40% 6

30. Slide 30: Inventory to VoP and Trade Receivables to Sales

    INVENTORY TO VOP (DPE) (` in Crores) 4905 4776 4177 3370 3427 202 206 206 188 181 2013-14 2014-15 2015-16 2016-17 2017-18 Inventory Inventory in No. of days to VOP (DPE) VoP = Net turnover – Changes in Inventories of FG, WIP & Scrap (` in Crores) TRADE RECEIVABLES TO SALES 5705 4129 4355 3786 3712 2

31. Slide 31: Return on Capital Employed, Return on Equity, EBITDA

    BHARAT£l£Cr/?ON/CS RETURN ON CAPITAL EMPLOYED RETURN ON EQUITY ( in %) ( in %) 19.57% 20.61% 17.00% 18.03% 14.64% A 13.16% 14.14% 14.80% 14.55% A 13.28% 2013-14 2014-15 2015-16 2016-17 2017-18 2013-14 2014-15 2015-16 2016-17 2017-18 Return on Capital Employed = PAT / Capital Employed Return on Equit

32. Slide 32: Earning Per Share and Dividend Distribution

    BHARAT£l£Cr/?ON/CS (in `) (in `) EARNING PER SHARE (EPS) CASH EARNING PER SHARE 6.89 6.73 6.03 5.70 4.95 5.67 o o 5.06 4.42 4.12 3.53 2013-14 2014-15 2015-16 2016-17 2017-18 2013-14 2014-15 2015-16 2016-17 2017-18 EPS normalised for the previous periods due to Cash Earning Per Share = (PAT + Depreci

33. Slide 33: R&D Expenses to Turnover and CAPEX

    BHARATRFCTRONfCS R&D EXPENSES TO TURNOVER (` in Crores) 9.79% 9.34% 8.81% 8.20% 7.56% 988 704 777 549 467 2013-14 2014-15 2015-16 2016-17 2017-18 CAPEX R&D Expenses R&D Expenses to Turnover (` In Crore) 612 634 525 413 383 2013-14 2014-15 2015-16 2016-17 2017-18 10

34. Slide 34: Price Earning Ratio, Book Value, Market Capitalisation

    PRICE EARNING RATIO ( in %) BOOK VALUE PER SHARE (` in Crores) 37.43 32.85 33.62 30.46 31.85 29.24 23.36 21.98 17.39 10.54 7017 7885 8984 7509 7761 2013-14 2014-15 2015-16 2016-17 2017-18 2013-14 2014-15 2015-16 2016-17 2017-18 Net Worth Book Value Per Share Book Value normalised for the previous pe

35. Slide 35: Share Holding Pattern as on 31.03.18

    SHARE HOLDING PATTERN AS ON 31.03.18 INSURANCE COMPANIES, 4.42% OTHERS, 9.30% FOREIGN INSTITUTIONAL INVESTORS, 6.44% GOVERNMENT OF INDIA + NOMINEES, 66.79% MUTUAL FUNDS & UTI, 13.05% Others includes: Corporate Bodies (3.37%), NRI's (.31%) , Banks & FI's (.34%) 12

36. Slide 36: Quarterly Performance

    QUARTERLY PERFORMANCE 13

37. Slide 37: Financial Highlights for 1st Quarter 2018-19

    Financial Highlights for 1St Quarter 2018-19 (` in Crores) Particulars 2018-19 2017-18 Total Income from Operation (Net) 2077.84 1772.83 Net Profit for the period before tax (PBT) 250.21 179.27 Net Profit for the period after tax (PAT) 179.73 125.32 Earning Per Share (EPS in `) 0.74 0.51 (Previous y

38. Slide 38: BHARArElfCTRON/CS

    BHARArElfCTRON/CS

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