Bharat Electronics Q3 Preview: Focus on indigenisation and robust orderbook to drive revenues

The government continues to push for indigenisation within the segment which could benefit companies like HAL and BEL.

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26 Aug, 2025 12:21

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With continued government focus on indigenisation and a strong orderbook, analysts are optimistic about the prospects of Bharat Electronics (BEL). The defence major is expected to announce its Q3 earnings on January 30.

According to the average of seven brokerages, the company's revenue for Q3FY25 will increase 18 percent year-on-year (YoY) to Rs 4,893 crore; net profit for the quarter is expected to increase 10 percent YoY to Rs 978 crore. The EBITDA margin for the quarter is expected to be around 25 percent.

The most optimistic of the brokerages is Elara Securities. It estimates that net profit will increase around 27 percent YoY to Rs 1,132 crore. On the other hand, per the most pessimistic of estimates, net profit is expected to fall 4.9 percent to Rs 849 crore.

BEL's stock has gained around 41.59 percent over the last one year, but  declined around 12 percent over the last six months.

What will impact earnings

Analysts at Nuvama note that BEL remains one of the biggest defence electronics manufacturers, and compared to others in the space, has better visibility of elevated operating margins on higher indigenisation efforts, cost efficiencies, and a better product mix.

Here are some of the key drivers:

Robust orderbook

Most brokerages remain optimistic that the defence manufacturer's strong order book will continue to drive revenue growth. According to JM Financial, the year-to-date order inflow stood at Rs 10,400 crore, which is around 41 percent of the inflow guidance for FY2025.

Government push for indigenisation

The government  push for indigenisation in this segment could benefit companies like HAL and BEL. Axis Direct, in a recent report, noted that the government’s increasing budget allocations for the defence sector, and its focus on implementing reforms to enhance domestic defence manufacturing and reduce imports, are expected to support order inflows over the medium-to-long term. The Defence Acquisition Council (DAC) recently approved five proposals worth Rs 21,772 crore for the acquisition of capital assets.

Contraction of margins 
Analysts at Motilal Oswal expect margins to return to FY2024 levels and contract by around 40 basis points YoY to reach around 25 percent. The brokerage explains that BEL's margins  are a function of the project mix and can vary sharply during a quarter.

What to look for in the quarterly results?

Analysts will be keeping a close eye on the order pipeline and execution timelines for key projects.

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