Government’s defence-related policies & declarations in Budget are likely to be positive: Siddharth Mishra, CMD, Bharat Dynamics

Siddharth Mishra, Chairman and Managing Director, Bharat Dynamics Limited, talks about the government’s approval for export of Akash Missile system, expectations about defence systems that can be approved for export purposes, new order related to ATGM, order book, revenue visibility, 101 negative lists of defence products, business outlook and budget expectations during an exclusive interview with Swati Khandelwal, Zee Business. Edited Excerpts: 

Q: The government has allowed export of Akash Missile system to other countries. How big this development for you is and what kind of opportunities do you see in it? Also, have you started discussions with some other countries as export partners? 

A: Cabinet Committee on Security (CCS) has just approved the export of Akash Missile system and this is a very big opportunity for Bharat Dynamics at the same time it is national pride. So far, we were just buying the weapon systems and now, we have this contemporary weapon system, which is a surface-to-air missile system and is made of very good technology in this category. So, we will export this system. The government has now allowed us to work with many countries and discussions have started with many countries. I am very hopeful that in a few days we will be successful in it. There are some channel partners from other countries in this and after having talks with them discussions with the MoDs of other countries have started. We are very hopeful that we very soon we will get some orders too. Actually, we have also supplied this Akash Missile system in large numbers to the Indian Army and Indian Air Force. Based on good performance and reports from the Indian defence forces, it is a good opportunity to export them to foreign countries.

Q: Is there a possibility of some other defence exports being cleared? Are you looking at any developments here and how soon it will take place? 

A: We have started exporting. Our segment is anti-tank guided missiles, torpedoes, surface-to-air missiles, air-to-air missiles. And we have already taken clearance of many systems from the stakeholders and we have grown significantly. The next weapon system that we are seeing is the Astra Missile system, which will be displayed to people during the Aero Show. We will also try that Astra weapon system is also cleared for export. Apart from this, we are already started selling the light-weight torpedoes to other countries and we have won many contracts and have also completed several contracts. We also want to sell anti-tank guided missile (ATGM) and CMDS systems to other countries and they are also likely to be cleared for export purposes. Recently, we also received orders to integrate some missiles from Israel Aerospace Industries (IAI). Ever since India made the policy to export the weapon system, we are very encouraged and are ready to export it. So, a very big opportunity is visible to us.

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Q: You have received the orders of Rs 633 crore. What are the details here and what is the execution timelines for it? 

A: We have received these orders for anti-tank guided missile (ATGM) and we are supposed to complete it within a year. We are almost ready for it and it is likely to be completed by this year's end. We are expecting a greater number of orders related to these missiles. Interestingly, this anti-tank guided missile (ATGM) has indigenized by about 96% and this is a good opportunity and we also specialized in making it and can make it in big numbers. So, we will be able to complete this order by the end of this year.

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Q: What are the current order book and the revenue visibility from it? What kind of new orders do you expect to get in the coming quarters? 

A: As of today, the order book of the company stands at around Rs 8100 crore and many negotiations have reached an advanced level. Talks related to anti-tank guided missiles and Akash missile system are at advanced levels and we are expecting the same with Astra. We have also developed a new weapon system Smart Anti-Airfield Weapon (SAAW) in collaboration with DRDO and are expecting orders for the same. Plus, you would have heard that we along with DRDO have completed the trails of Nag and are expecting orders for it well. So, we are expecting orders worth Rs 25,000 crore in the next 3-4 years, which will be executed in the 4-5 years. Of the current Rs 8,100 crore orders, we are expecting to complete orders of Rs 3,200 crore this year and balance will be completed in the next 2-3 years. Meanwhile, we will also keep adding new orders. We are expecting to complete orders worth Rs 3,600-4,200 crore next year and in the next-to-next year in 2022-23, our growth will be more than 10%.

Q: Government is likely to add more items to the negative list for defence soon. How big an opportunity this can be for you? 

A: Recent policies of the government of India are very encouraging and several new policy and directives have been issued, which is improving the defence sector. And, the 101 negative list that was released was a very big decision of the government that says that these items will not be sourced/ imported from the foreign market. Our very important item was listed in this list of 101 items and they are Akash Weapon System, Astra Weapon System and few torpedoes. The next list that will come out and the government is working it and has also taken advice from us. In our recommendation, we have named other weapon systems that we are making and those, which are at the advanced stage of trials. When the new list will be out, it is likely to include more ATGMs, Torpedoes, air-to-surface missiles and their inclusion will increase our opportunities for us. Besides, we are also working with many big companies to bring new technologies and will bring them to India under Transfer of technology (ToT)and manufacture them in India and also export them. Few declarations will be made at the Aero Show and negotiations have been reached for those, which are at advanced stage and talks have advanced. The Aero Show is scheduled in the first week of February in Bangalore.  

Q: Please give growth plans & business outlook for 2021? 

A: As I have said that we have an order book of Rs 8,100 crore and we will get a few more orders by the end of this year. In 2021, I expect that we will be able to reach to the last year's level and good growth is expected in 2022. Also, because we will have order book and executions, so, we are expecting that will try to keep the profit level near the last year's level. So, our margins will be good, execution will also be good and the order book will also improve.

Q: What are your expectations, specifically for defence, from this year’s budget 2021-22?

A: As you know the government of India has started Atmanirbhar Bharat campaign, so we are expecting some policies related to it. At the same time, we also expect that if the defence budget is increased, certainly there will be an improvement in our orders. I am quite confirmed that the government’s defence-related policies and declarations will be very positive.