Motilal Oswal is bullish on Bharat Electronics has recommended buy rating on the stock with a target price of Rs 130 in its research report dated May 30, 2019.
Motilal Oswal's research report on Bharat Electronics
4QFY19 revenue increased 7.7% YoY to INR38.8b (v/s our est. of INR38.9b), primarily driven by execution of EVM/VVPAT orders, IACCS, weapon locating radars and land-based EW system. EBITDA grew 17% YoY to INR9.3b (our est. of INR7.6b), while reported net profit increased 20% YoY to INR6.7b. Other income jumped to INR1.3b v/s INR279m in 4QFY18, supported by one time dividend from an associate company of INR910m and income tax refund of INR170m (excluding this, other income would stand at INR210m). For FY19, sales/EBIDTA/PAT grew 17%/43%/38% on YoY basis.
Given current order backlog position, execution timelines and capabilities of the company, we raise our estimates for FY21E by 7% and maintain a BUY rating on the stock with TP of INR130 (16x Mar'21E EPS, in line with its 10-year average P/E multiple of 16.8x).
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