Sharekhan's research report on Bharat Electronics
Q3FY2023 performance was a mixed bag with in-line sales but a miss on OPM and profitability. Order backlog was at ~Rs. 50,116 crore (~2.9x TTM revenue). Order intake has been muted so far, but defence order awards can be lumpy and hence BEL maintained order inflow guidance at ~Rs 20,000 crore for FY2023. BEL is expediting efforts to increase non-defence revenue to diversify its business. Further, any breakthrough on the exports front could be a key growth catalyst. BEL has a promising order inflow pipeline, large order book and attractive valuation.
We retain a Buy on BEL with a revised PT of Rs. 120, rolling forward our estimates to FY2025E EPS and factoring in revised revenue and margin guidance.
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