Hold Bharat Electronics: target of Rs 407: Prabhudas Capital

Prabhudas Capital recommended hold rating on Bharat Electronics with a target price of Rs 407 in its research report dated October 31, 2025.

Broker Research

November 05, 2025 / 16:46 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Capital's research report on Bharat Electronics

We revised our FY26/FY27E EPS estimates by +2.6%/+1.1% factoring in strong execution pace and robust order pipeline. Bharat Electronics (BEL) reported a strong quarterly performance with revenue rising by 25.8% YoY led by strong execution with EBITDA margin contracted by 88bps to 29.4% due to decline in gross margin. BEL continues to enhance its system integration capabilities, moving up the value chain by participating in key defense programs like AMCA (in consortium with L&T) and Project Kusha (with DRDO), both offering significant long-term growth potential. The company expects a Rs 100bn+ opportunity from the recently approved Rs 790bn DAC acquisitions, further strengthening its order pipeline.

Outlook

To support capacity expansion and future program requirements, BEL plans to invest Rs 14bn over the next 3–4 years in a new Defense System Integration Complex in Andhra Pradesh, which will house QRSAM, unmanned systems, missile, and radar systems. BEL targets to lift its non-defense revenue share to 10% by FY26, supported by traction in Kavach, homeland security, data center, and fiber optic projects. With strong execution and rising export contribution (10% of revenue), BEL remains well-positioned for sustained growth and margin resilience. The stock is trading at a P/E of 45.1x/39.1x on FY27/28E earnings. We roll forward to Sep’27E and maintain our ‘Hold’ rating, valuing the stock at a PE of 40x Sep’27E (Mar’27E earlier) arriving at a TP of Rs 407 (Rs 374 earlier).

For all recommendations report, click here