Bharat Electronics says semiconductor shortage has eased but not fully over

Bharat Electronics

Dinesh Kumar Batra, CMD, Bharat Electronics (BEL), on Monday said the semiconductor shortage has eased out but is not fully over yet and the company is witnessing a delay in execution of orders.

"There is no denial that there is a shortage of semiconductor on one account. There is a pent-up demand and also, the full-fledged manufacturing in those countries who are making the semiconductors is not completely operational," said Batra in an interview with CNBC-TV18.

However, the company has maintained the revenue growth guidance of 15 percent for the current financial year.

"...something which was to come in say second quarter may get shifted to third quarter or to fourth quarter, because there may be certain delays. But so far, targets of what we have planned for this year - we do not have any repercussion of those semiconductors," he said.

The comments came after the company announced September 16 as the record date for its bonus issue in the ratio of 2:1 — investors to receive two equity shares for every one share held.

Bonus shares are fully paid additional equity shares issued to the existing shareholders of a company.

BEL's board has decided to issue bonus shares by capitalising more than Rs 487 crore.

Besides, the company has also signed an MoU (memorandum of understanding) with Smiths Detection India to manufacture high-energy scanning systems.

The company said that the semiconductor fabrication plant is still under scrutiny and will take about four years to be operational once the approvals are received.

“Discussions are taking place at different levels. We have given along with HAL our proposal. Whenever this comes through, of course, we intend to spend around Rs 2,500 crore on BEL side. But definitely at the moment, it's in the approval stage, it will take a year or two to come up at the level of starting, putting up the plant, and it will take three, four years that the business start coming in," said Batra.