BEML aims to double its defence vertical revenue in FY19

BEML's Defence segment accounted for around 17% of the company's overall revenue of Rs 33 billion in the financial year ended March 2018

Public sector engineering major, Bharat Earth Movers Limited (BEML) is betting big on the defence vertical with a plan to double its revenues from this segment in the current financial year. 

The defence segment accounted for around 17 per cent of the company’s overall revenue of Rs 33 billion in the financial year ended March 2018.

"We see a lot of traction in our defence vertical. The order book looks healthy and we should be able to increase the pie of defence vertical to around 25 per cent of the overall revenues in the current financial year," Chairman and Managing Director of BEML, DK Hota told Business Standard.

Such optimism stems from the fact that its aerospace vertical has shown signs of an upside in the current financial year. BEML supplies mortar and casing components to the Indian Army. "We are collaborating with other government agencies such as DRDO, ADA, BDL (Bharat Dynamics Ltd.) and HAL among others. We expect aerospace to drive our next phase of growth," added Hota. BEML has been selected as the lead vendor for Akash missile system. 

The Bengaluru-headquartered company is also working on recovery vehicle on main battle tank of Indian Army, mine protected vehicle for military and para-military forces, high-end missile programme and Akash missile system among others.

The company has already invested around Rs 300 million to strengthen its capability to cater to aerospace segment, and plans to spend another Rs 1 billion in next couple of years.

"Our spare business is also likely to take a leap from last fiscal's Rs 1.5 billion to Rs 4 billion this financial year," the CMD of BEML said.

The defence unit is also collaborating with Ordnance factory in joint development of various projects.

During last financial year, BEML has developed in-house design, development and supply of Arjun Repair and Recovery vehicle. It has also manufactured trawl assembly for T-72 tanks to R&DE (Engineers), Pune and developed aggregates for the quick reaction surface to air missile for DRDL (Defence Research & Development Laboratory).

As part of the 'Make in India' initiative, the company has built a supplier-base of more than 1,000 SMEs for procuring various articles for defence equipment.

The Mini Ratna public sector unit reported a 53 per cent rise in its consolidated net profit to Rs 1.29 billion for FY18. Its income from operations rose to Rs 32.98 billion, up 16.5 per cent over the same period of previous fiscal.

While the company’s mining and construction business registered a growth of 11 per cent, its rail and metro business achieved a record sale of 244 metro cars, registering a growth of 114 per cent over the previous fiscal. Despite headwinds faced by defence business, it grew by 10 per cent during this period.