BUDGET 2000
SPECIALS
INTERVIEWS
COMMENTARY
GOVT&ECONOMY
Y2K: BIZ FEATURES
INDIA & THE WTO
CREDIT POLICY
BIZ IN THE USA
CARS & MOBIKES
MANAGEMENT
CASE STUDY
BIZ-QUIZ
USEFUL INFO
ARCHIVES
NEWSLINKS
SEARCH REDIFF

BEL shakes off sanctions woes; company net up 90% at Rs 1.02 billion

Fakir Chand in Bangalore

Bharat Electronics Limited, or BEL, the Bangalore-based public sector giant, says that it has weathered the impact of US sanctions by identifying alternate sources and components to meet its requirements for executing orders.

"As a result of such alternative and remedial measures, BEL has managed to insulate the defence services from the effects of the US sanctions," BEL chairman and managing director V K Koshy said.

"The company is no longer dependent on US companies for supply of critical components. The sanctions actually turned out to be a blessing in disguise," he said.

"Initially, the sanctions had some impact on the company's working. Sensing that it would be long before curbs are lifted, we lost no time in setting up special taskforces in all our premier units for scouting for critical items outside the US, and succeeded in securing them," Koshy said.

Even now the three major units of BEL located in Bangalore, Hyderabad, and Ghaziabad are on the 'banned entity list' of the US Administration. It has also faced passive sanctions from some European countries, which frown upon India's nuclear policy.

Undeterred by this, the taskforces identified alternate sources and components from some South-East Asian countries and Australia.

These measures have enabled the company to post a record turnover of Rs 14.96 billion during the fiscal 1999-2000, which is an increase of 25 per cent over the corresponding previous period.

BEL saw its profit after tax increase by 90 per cent to Rs 1.02 billion at the end of 1999-2000, as against Rs 536.3 million during the previous year.

Its profit before tax also shot up to Rs 1.52 billion from Rs 700 million during the previous fiscal.

Koshy, however, admitted that exports during the year took a beating, logging Rs 290 million, against a projected target of Rs 400 billion.

BEL has struck major deals for the fiscal 2000-01. "Our order position as on April 1,2000 is for Rs 27.11 billion," Koshy said.

The company is, however, projecting a turnover of only Rs 17.50 billion for the current year as some of the orders signed up recently have a longer gestation period, spilling over into the following years.

BEL is also eyeing the information technology sector. "With a strong R&D base, the company will take up the production of Intel chip-based motherboards from next month." Koshy said.

"It will develop its own brand of software products and services, including integrated circuit chips for smart card-based access control systems in the following months," he said.

Nuclear bomb and economic sanctions: full coverage

Business