Buy Bharat Electronics; target of Rs 500: Motilal Oswal

Motilal Oswal is bullish on Bharat Electronics has recommended buy rating on the stock with a target price of Rs 500 in its research report dated October 31, 2025.

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November 04, 2025 / 13:24 IST

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Bharat Electronics

Bharat Electronics’ (BHE) 2QFY26 revenue/EBITDA/PAT exceeded our estimates, driven by strong execution and better-than-expected margins. Concerns over BHE’s plateauing order book seem unwarranted as despite order book growing at a CAGR of 9% during FY23-1HFY26, the company has consistently grown its revenue by 14-17% over the same period, supported by strong inflows, except in FY25. The future order pipeline also remains strong, driven by orders from the AoNs approved across Army, Navy and Air Force over the last two years. This will be further supported by large sized order prospects from QRSAM, project Kusha and next-generation corvettes and export opportunities in future. We also expect margin performance to remain strong, led by project mix and indigenization. We, thus, maintain our positive stance on BHE and retain BUY with a marginally revised TP of INR500, based on 45x Dec’27E EPS (Rs490 earlier).

Outlook

We marginally tweak our estimates to bake in slight margin improvement and lower other income. We marginally revise our TP to INR500, based on 45x Dec’27E EPS, and maintain BUY rating on BHE.

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