Buy Bharat Electronics; target of Rs 360: Motilal Oswal

Motilal Oswal is bullish on Bharat Electronics has recommended buy rating on the stock with a target price of Rs 360 in its research report dated October 28, 2024.

Broker Research

October 29, 2024 / 11:29 IST

Buy

Motilal Oswal's research report on Bharat Electronics

Bharat Electronics (BHE)’s 2QFY25 results came ahead of our estimates, driven by better-than-expected margin performance. Revenue growth was led by a strong order book, which stood at INR746b. Order inflows stood at INR74b during 1HFY25. We expect defense ordering to start ramping up in the coming quarters. We expect BHE to remain a key beneficiary of the same, with key focus areas being from naval, EW systems, artillery systems, platform orders, Kavach, exports, et al. We expect BHE’s revenue to grow at 19% CAGR over FY24-27, driven by improved market share on account of enhanced wallet share and improved indigenized offerings. We maintain our estimates and continue to value the company at 35x two-year forward earnings. Reiterate BUY with a TP of INR360.

Outlook

BHE is currently trading at 33.1x/27.4x on FY26E/FY27E EPS. We maintain our estimates and continue to value the company at 35x two-year forward earnings. Reiterate BUY with a TP of INR360.

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