Billionaires Drive India Defense Supplier to Solar Panels
As Indian Prime Minister Narendra Modi turns to local billionaires to modernize the nation’s military, a state-owned defense supplier is hedging its future by diversifying into civilian contracts.
Bharat Electronics Ltd., a maker of radar and avionics, is looking to double its non-defense revenue in three years in a strategy that may help boost sales by 15 percent as early as this year, a pace of growth not seen in a decade, Chairman S.K. Sharma said in an interview.
“There’s scope to expand the footprint and diversify in the civilian segment with the execution capabilities we have,” Sharma said. “We are going after solar power, air traffic management systems and related areas. The comparable returns are attractive.”
The company is at a crossroads as competition from private firms threatens the monopoly it has enjoyed as a state-owned supplier for 61 years. The trade ministry last year approved as many as 19 defense proposals by companies controlled by billionaires, including Mukesh Ambani and Baba Kalyani, and said 14 more didn’t require any license at all.
Bharat Electronics will spend 5 billion rupees ($78 million) in the year ending March 31, 2016, on securing orders for solar power plants, Modi’s smart city projects and air-traffic management systems, Sharma said. The investment will be the biggest for new initiatives in the past five years, he said.