Target Price : ₹362
CMP : ₹314.50
Bharat Electronics (BEL) has reported consolidated revenue of ₹4,604.90 crore in Q2FY25, marking a growth of 14.8 per cent y-o-y and 8.5 per cent q-o-q. EBITDA increased significantly by 38 per cent y-o-y and 47.6 per cent q-o-q to ₹1,399.90 crore, with EBITDA margins improving to 30.4 per cent, up 510bps y-o-y and 810bps q-o-q.
PAT for the quarter stood at ₹1,092.80 crore, reflecting a growth of 38.4 per cent y-o-y and 38.1 per cent q-o-q. The robust revenue growth was driven by the execution of several key orders, including the LRSAM project worth ₹1,600 crore, the CBIC order for the Delhi Government worth ₹300 crore, the IACCS project worth ₹300 crore, the EW system for Shakti worth ₹250 crore and the Hammer Missile System worth ₹235 crore.
The company is set to execute a substantial portion of its projects in the second half of FY25.
Considering India’s escalating defense expenditure, BEL’s strong order book & expected order inflow in FY25 & FY26, we recommend a ‘Buy’ rating, setting a target price of ₹362 with a P/E multiple of 47x based on the projected FY26 EPS of ₹7.71.
Any escalation in the Israel-Hamas conflict could lead to supply chain disruptions, potentially increasing costs or affecting business operations.
