Sharekhan's research report on Bharat Electronics
BEL delivered a strong Q4FY2023 performance with a strong beat on margins and net profit. The company guided for 17% revenue growth in FY2024 and expects OPM to be 21-23%. Order backlog stands strong at ~Rs. 60,690 crore (~3.5x revenue). FY2024 order intake expectation is at least ~Rs. 20,000 crore with the likelihood of beat if QRSAM or MRSAM orders kick in. Capex of Rs. 700-800 crore in FY2024, R&D expenditure will be at 7% of revenue in the next 1-2 years. 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.
Outlook
We expect Revenue/PAT CAGR of ~16% each over FY23-25E. The stock trades at ~20x FY2025E EPS. We retain a Buy on BEL with a revised PT of Rs. 130.
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