Bharat Electronics shares rise 3% as brokerages optimistic on Q4 show; should you buy, sell, or hold?

BEL is positioned to benefit from the expected upcoming emergency procurement list, said brokerages.

Defence electronic systems supplier Bharat Electronics Ltd. shares gained in trade on May 21, after brokerages rolled out reports, following the public sector undertaking's analyst call for the quarter ended March FY2025.

Bharat Electronics reported an 18.4 percent increase in consolidated net profit to Rs 2,127 crore in the March quarter, on account of higher revenues, as against Rs 1,797 crore in the January-March period of FY2024, the company said in an exchange filing.

The company's total revenue from operations increased 6.8 percent to Rs 9,149.6 crore from Rs 8,564 crore in the year-ago quarter.

The firm expects Rs 30,000 crore worth of orders for Quick Reaction Surface to Air Missiles (QRSAM) by March or April next year. BEL added that it is also expecting an order regarding corvettes for the Indian Navy this year.

“Various projects of the Army, Navy, and Air Force are being discussed. We are actively involving ourselves in those discussions, and we are hoping good orders will come under emergency procurement also for us,” the management said during an investor call with analysts.

At 9.50 am, shares of the firm were quoting Rs 376 per share, higher by 3.4 percent on the NSE.

Should you buy, sell, or hold shares of Bharat Electronics?

According to Nuvama Institutional Equities, higher localisation content, favourable product mix and operational efficiencies will drive growth hereon. The brokerage hiked its target price on the firm to Rs 430, which was earlier Rs 385, while issuing a 'buy' tag on the stock.

"BEL is rightly positioned to benefit from the expected upcoming emergency procurement list and to cater to wider defense electronics components across the army, navy and air force for the next few years. We expect its margin performance to remain strong, driven by increased indigenization as well as continued R&D spend over years," said Motilal Oswal.

The brokerage maintained its 'buy' rating, hiking its target price to Rs 410 per share. "The order inflow for FY25 was a bit weaker than the company’s initial guidance, but the order prospect pipeline for BEL stands strong for the next two years."

"BEL’s Q4FY25 results exceeded expectations, primarily due to a significant positive variance in gross margin, which was 390 bps ahead of our estimate," said Japan-based Nomura. Notably, Bharat
Electronics Limited (BEL) has demonstrated robust gross margin performance over the preceding eight quarters, averaging 48 percent.

"Increasing defence spending by Europe could be positive for BEL, as it has strong collaborations with major European OEMs. We reiterate our Buy rating with a target price Rs 363," it added.

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