Bharat Electronics Ltd. (BEL) a Navratna PSU (since June 2007) and a leading supplier of radar, communication, and electronic warfare systems to the Indian armed forces, is in focus after Jefferies Reaffirms ‘Buy’ on it, and here’s what it has to say regarding its future outlook.
Stock Price Movement:
With a market capitalization of Rs 1,99,228 crore on Monday, the shares of Bharat Electronics Limited were currently trading at Rs 272.29 per equity share, down nearly around 1.7 percent from its previous day’s close price of Rs 276.99. The stock is trading below its 52-week high by 25 percent.
Target:
Jeffries has maintained a buy rating on Bharat Electronics Ltd. and given a target price of Rs 325 per equity share, which has an upside potential of 19 percent from the current price of Rs 272.29.
Rationale for Target:
Jefferies remains optimistic on Bharat Electronics Ltd. (BEL), citing management’s confidence in meeting FY25 guidance despite achieving only 39 percent in 9MFY25. The company secured Rs 5.8 billion in orders and needs Rs 113 billion more in March-April 2025 to meet its Rs 250 billion target. Near-term triggers include order announcements in March-April 2025, while BEL remains attractively valued among Indian industrial stocks.
India has been subdued between fears of higher defence imports from the US and also lower defence spend year-to-date by the government—down 4% year-on-year versus planned rise of 3% year-on-year. “BEL is relatively insulated from higher imports like aircraft versus Hindustan Aeronautics, which has more potential impact.
The global defence spending surge, driven by Europe’s response to US military aid suspension to Ukraine, adds to the positive outlook. However, risks include slower defence indigenization and lower-than-expected government spending year-to-date.
Financials Highlights:
Bharat Electronics Ltd. (BEL) posted 23.41 percent revenue growth in Q3 FY25, reaching Rs 14,174 crores from Rs 11,485 crores YoY. Profit before tax surged 43.86 percent to Rs 4,242 crore, while profit after tax rose 42.34 percent to Rs 3,183 crore. EBITDA margin improved to 28.07 percent from 23.67 percent, and EPS climbed to Rs 4.36 from Rs 3.06.
Order Book and Inflows:
BEL is a leading supplier of radar, communication, and electronic warfare systems to the Indian armed forces. The company operates 9 manufacturing units and 2 research centers, with Bangalore and Ghaziabad as its major hubs.
As of January 1, 2025, Bharat Electronics Ltd. (BEL) holds an order book of Rs 71,100 crores. The company has secured Rs 11,000 crore in orders so far, against its Rs 25,000 crore target for FY25. Management remains confident in meeting this goal, citing multiple projects set for finalization in the next two months.
Written by: Shashi Kumar
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