Kotak Securities research report on Bharat Electronics“In a seasonally lean quarter, BEL reported improved order execution leading to significant margin gains and substantial profit beat. Strong order backlog at Rs 229 bn provides 42 months of revenue visibility. EBITDA margins have bounced back in FY14 and H1FY15 and if the execution rate accelerates in the future, the margins can improve further.” “Valuations have inched up but continue to remain at a substantial discount to peer group (Capital Goods universe). If order execution rate inches up in the coming quarters, then there could be further room for valuations to rise. We remain positive on the stock and revise rating to ACCUMULATE (prior rating was BUY) in view of the sharp rally in the stock and moderate upside from current levels,” says Kotak Securities research report.
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