Bharat Electronics Limited (BEL), a defence ministry enterprise, is confident of growing its revenues at a compounded annual growth rate of eight to 10 per cent over the next five years and plans to invest more in research and development from the current levels.
The company's share price closed at Rs 1,261.75 on Friday on the Bombay Stock Exchange (BSE). BEL had recently announced setting up a Rs 300-crore night-vision products manufacturing facility in Andhra Pradesh. The investment will be over a four-year period.
In a note issued on Friday, brokerage Prabhudas Lilladher said the company's order book grew 53 per cent to Rs 32,100 crore, including export orders of about $103 million.
"BEL expects the order inflow run to remain healthy at Rs 100‐150 billion (Rs 10,000 to Rs 15,000 crore) for next few years given the healthy pipeline of orders. BEL expects sales to grow at eight to 10 per cent CAGR over the next five years," Prabhudas Lilladher said in its note.
"BEL is investing in capex to support execution of strong order book. It is also looking at steeping up R&D spend further (9.3 per cent in FY16) to 10‐12 per cent of sales to maintain technological edge and retain leadership position in strategic electronics," the note added.
The new facility at Nimmaluru village in Andhra Pradesh will also boost Narendra Modi government's Make in India initiative through which it wants to manufacture more products in India, with special emphasis on defence items.
"The new facility has been planned to establish a state-of-the-art factory to cater to the futuristic requirements for night vision products," BEL Chairman and Managing Director SK Sharma said in a regulatory filing to the BSE.
The company reported a 52.9 per cent fall in standalone net profit for the June quarter to Rs 36.09 crore from Rs 76.69 in the year-ago period and a decline of 20 per cent in revenues to Rs 871.43 crore.
The public sector undertaking has manufacturing facilities at many places in India including Bengaluru, Hyderabad, Chennai, Panchkula and Machilipatnam.