Accumulate Bharat Elec; target of Rs 1353: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Bharat ElecBharat Electronics (BEL) revenues disappointed while margins surprised on the positive side. BEL reported sales of Rs15.2bn, down 5.7% YoY (PLe: Rs18.5bn). The weak execution was due to a combination of delayed vendor dispatches as well as inventory increases due to delay in pick up by few clients. Major projects supplied during the quarter include Akash Missile System( Airforce, Army), Fire control System, 3D Tactical Control Radar, Low Level Light Weight radar, Gigabit Ethernet based Ship Data Network, L band Radar for exports. BEL reported EBITDA of Rs2.9bn, up 5.2% YoY (PLe: Rs2.8bn) and margins improved by 200bps to 19.3% due to better mix. Other income was up 19% YoY to Rs1.4bn and Adj. PAT was up 8.8% YoY to Rs2.9bn (PLe: Rs2.5bn). The stock is trading at 21.3x FY17E earnings. We believe BEL will be the prime beneficiary of government focus on modernization of current fleet and procurement of new capital equipments. Increased focus on R&D, move towards being system integrator and increased focus outsourcing are steps in right direction to increase long term sustainability of business. We continue to believe BEL offers good investment opportunities to investors who want to invest in the Indian Defence sector with a long‐term view. We expect stock to deliver earnings CAGR of 12% over FY14‐17E. Maintain ‘Accumulate’. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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