Buy Bharat Electronics; target of Rs 151: Sharekhan

Sharekhan's research report on Bharat Electronics

BEL’s Q1FY24 performance was remarkable on all fronts, as healthy execution led to solid sales and operating profit growth. Higher other income helped net profit growth of ~47% y-o-y. . Order backlog stands strong at ~Rs. 65,356 crore (up 18% y-o-y). YTD order intake has been Rs. 8,100-9,000 crore and expectations of ~Rs. 20,000 crore for the year may exceed if QRSAM/MRSAM orders kick in. We believe the increase in R&D expenditure and capacity expansion would enhance its execution capabilities. BEL also aims to increase non-defence revenue and exports contribution in exports.

Outlook

BEL boasts a promising order inflow pipeline, strong cash balance and healthy return ratios. Following a good quarter, we retain a Buy on BEL with a revised PT of Rs. 151.