Target: ₹119

CMP: ₹96.45

Bharat Electronics Ltd (BEL), a significant player in the defense domain with numerous established and potent R&D capabilities, has already participated in numerous “Make in India” projects under Defense Acquisition Plan (DAP) and seeks to broaden its horizon.

Additionally, there are construction capabilities and competencies for subsystems, systems, and services that are being developed indigenously.

The company, during Q3-FY23, reported a robust set of numbers, with the topline registering a 5 per cent/12 per cent growth on a QoQ/YoY basis, respectively, and stood at ₹41,530 crore on the back of improved execution capabilities.

EBITDA stood at ₹863 crore, a slight fall of 0.6 per cent compared to the previous quarter due to higher raw material cost. PAT for the quarter stood at ₹613 crore, registering a degrowth of 1.7 per cent, however it grew by 2.9 per cent on a YoY basis.

The company’s order book stands at ₹50,116 crore as of December 2022 (2.84x TTM revenues), and booked a total of ₹3,600 crore orders during Q3-FY23. The management is confident of receiving orders to the tune of ₹15000-16000 crore during Q4-FY23.

We recommend the company due to its healthy order book, ramp-up in the non-defence segment, zero-debt status, and governments Atmanirbhar push.

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