Choice Institutional Equitie's research report on Bharat Electronics
Q2FY26 management commentary reaffirmed our confidence that BHE is well-positioned for a multi-year growth upcycle, underpinned by execution strength, margin discipline and technological expansion. Guidance of 15%+ revenue growth and 27%+ EBITDA margin for FY26 reflects operational confidence. This is supported by a robust INR 75,600 Cr order book (~3.1x FY25 revenue) and strong inflow visibility of INR 27,000–57,000 Cr. We expect BHE’s focus on system integration and complex defence electronics to drive sustained value creation. The upcoming Defence System Integration Complex (DSIC) in Andhra Pradesh (INR 1,400 Cr capex) positions it to capture high-end programs, such as QRSAM, Project Kusha and NGC.
Outlook
We maintain our positive stance on BHE, underpinned by its robust long-term growth visibility, supported by a healthy orderbook and a strong pipeline. Reiterating our ‘BUY’ rating with a target price of INR 500, we value the stock at 40x FY27–28E avg EPS.
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