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Key Conference Call Highlights

FY27 Guidance & Outlook

* Revenue & Margin: The management retained a revenue growth guidance of >15% for FY27E, with EBITDA margin expected >28%

* Working capital: Receivables temporarily increased, normalisation to 140–150 days is expected

* Order Inflow Projection: The company expects >INR 55,000 Cr in order inflows for FY27, which includes the QRSAM programme

* Capital Allocation: FY27 capex is targeted at >INR 1,200 Cr (a >20% YoY increase), alongside R&D investments projected at ~INR 2,200 Cr

* Business Mix: The defence to non-defence revenue ratio is anticipated to remain steady at 90:10, with a strategic goal to steadily scale up nondefence contribution to 15–20%

Order Book & Execution Backlog

* Order Book: The total order book stood at INR 73,882 Cr as of April 1, 2026. Total orders acquired in FY26 were to the tune of INR 30,045 Cr

* Major Execution Constituents: Key ongoing projects include Electronic Fuses (INR 4,300 Cr executable over ~7 years), LRSAM (INR 3,500 Cr), LCA (INR 3,200 Cr), and BMP-2 upgrades (INR 2,800+ Cr)

* Export Opportunities: The export order book sits at USD 96 Mn, executable in the next 2–3 years, with active pursuits for larger C4I and satellite communication system orders. While the export segment currently accounts for only 4–5% of the turnover, the management aims to increase this to over 10% in the next 4–5 years

Major Project Updates & Strategic Pipeline

* QRSAM Programme: Final contract signing is expected by June 2026

* Project 75I (Submarines): BHE is positioned to supply 50–60% of the electronics for this programme, encompassing six primary subsystems including communication, navigation and combat weapon control

* Data Centre Ventures: BHE is aggressively pursuing homegrown, cybersafe data centre solutions (hardware, software, and cybersecurity) with potential orders ranging from INR 2,000 to INR 10,000 Cr

* Directed Energy Weapons (DEW): Acting as the primary development and production partner for DRDO regarding laser and microwave-based DEWs, with internal initiatives under way to indigenise critical subsystems

* Additional Pipeline: Other significant near-term projects include NGC subsystems, Shatrughat, Samagat EW, HAMMER, Shakti Phase 4 and MFRX radar

Margin, Indigenisation & Cost Dynamics

* Indigenisation Driving Margin: Strategic indigenisation remains the primary lever for margin expansion. Indigenous content averages 80–85% across platforms, touching 90% on home-grown programmes

* Supply Chain & Semiconductors: Semiconductors currently make up 17–19% of material cost and are largely imported from Europe, the US and Taiwan. While domestic IC infrastructure is a few years away, the company is partially buffering potential price hike by indigenising adjacent technologies

* Macro Headwinds: The Middle East crisis caused only minor, temporary supply chain disruptions (1 to 1.5-month delays) for some subcomponents, which will not significantly affect annual execution trajectories

Capex & Future-tech Investment Strategy

* AI & Next-Gen Tech: Over INR 100 Cr has been invested in CPU/GPU computing at CRL Ghaziabad, CRL Bangalore, SBU and PDIC over the past two years, with another INR 100–200 Cr awaiting approval

* Capacity Expansion: Large infrastructure investments are earmarked for the next three years across Palasamudram, Chitrakoot, Vellore, Ghaziabad and Bengaluru

* AMCA Development: BHE is a part of a consortium (with L&T) awaiting the formal RFP for the AMCA programme in the next 1–1.5 months

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