The shares of defence equipment manufacturers gained up to 2 percent after the company bagged a prestigious work order for Rs 500 crore for a wide range of defence equipment.
With a market capitalization of Rs 2.18 lakh crore, the shares of Bharat Electronics Limited closed at Rs 298.50 per share, decreased around 0.57 percent as compared to the previous closing price of Rs 300.20 apiece.
Reason for Rise:-
According to the company filing, Bharat Electronics Limited bagged a prestigious work order for Rs 500 crore for Laser Range Finders, communication equipment, vessel communication and support systems, test equipment for guns, spares, services, etc. With these orders, BEL has now accumulated orders totaling Rs. 8194 Cr in the current financial year.
Financial condition:-
Analyzing the company’s financial performance, revenue zoomed by 15 percent from Rs 4,009 crore in Q2FY24 to Rs 4,605 crore in Q2FY25 but during the same time, net profit stretched by 38 percent from Rs 790 crore to Rs 1,093 crore.
Order book & guidance:-
As of now, the total order book stands at approximately ₹76,705 crore. This figure reflects the cumulative orders secured during the current fiscal year, which includes a notable order worth ₹695 crore announced in August 2024.
The company maintains a 15% revenue growth guidance for the year and expects an order inflow of ₹25,000 crores. Key orders include the BMP-2 Upgrade, TR Modules for Thales, and MPR Radar for ITR Chandipur.
Future Growth and Margins:-
The company expects total order inflows of ₹50,000 crores over the current and next year, driven by programs like ADFT, EW suite for Mi-17 V5, and mountain radar. It is also exploring export opportunities with L&T, Airbus, Thales, Reliance Defense System, and others.
The company maintains its gross margin guidance at 40% to 42% and EBITDA margin at 23% to 25%. It is focused on increasing indigenization, targeting 80% to 90% over the next two to three years.
Capex plan:-
The company plans a capex of ₹800 crores for the current year, with a focus on expanding capacity through new factories in Palasamudram, Nimmakuru, Hyderabad, and Ibrahimpatnam. These investments are aimed at supporting future growth and enhancing production capabilities across key locations.
Strategic Partnerships:-
The company signed an MoU with Rosoboronexport for ammunition exports to Russia, with a potential business opportunity of ₹20,000 to ₹30,000 crores over the next five to six years. It is also developing the Kavach system, expecting future annual business potential of ₹4,000 to ₹5,000 crores.
Remarkable Return:-
The stock has delivered returns of 21.16 percent in the last six months and a multi-bagger return of 100 percent in a year. A shareholder’s investment of Rs. 1 Lakh in the company would be worth Rs. 2.00 Lakh in a year.
Company snapshot:-
Bharat Electronics Limited develops and provides electronic equipment and systems to both the defense and non-defense industries. Its defense products include navigation systems, communication systems, land-based radars, naval systems, and electronic warfare systems, among others.
Written by:- Abhishek Singh
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