Buy Bharat Elec; target of Rs 1355: Geojit BNP Paribas

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26 Aug, 2025 12:21

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Geojit BNP Paribas's research report on Bharat ElecBharat Electronics Ltd (BEL) is a Navaratna enterprise having 37% market share in Indian Defence Electronics. BEL’s core capabilities are in radar & weapons systems, defence communication & electronic warfare.  BEL is emerging as a substantial beneficiary of the “Make in India” reform in defence. The current order book is robust at Rs32,333cr, 551% up from last year. On a conservative basis we expect 15% CAGR in earnings over FY16E-FY20E. More potential in earnings growth will emerge as per the progress of the recently initiated modernization & indigenisation programme. Cash rich, total cash as on 3QFY16 at Rs5,280cr (including term deposit) and is debt free.  ROE to be above 14% over the next 2-3years. BEL is trading at 1yr fwd P/E of 18x, which is 17% premium to its global peers owing to its superior EBITDA margins profile & improved earnings outlook considering higher indigenous procurement. We have a BUY rating on the stock with a target price of Rs1,355, based on P/E of 20x on FY18E EPS of Rs68.At CMP, BEL is trading at 20x and 18x on FY17E & FY18E EPS of Rs61 & Rs68 respectively. We value BEL at 20x on FY18E, with a target price of Rs1,355 and we have a “BUY” rating.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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