Sharekhan's research report on Bharat Electronics
Bharat Electronics Limited (BEL) reported mixed Q4FY2022 performance as sales were in-line with expectations. However, OPM and net profit lagged estimates despite better gross margin. Order inflows during FY2022 grew by ~20% y-o-y to Rs. 18,000 crore with order book closing at Rs. 57,570 crore at ~3.8x its FY22 revenue. The current uncertain international (Russia-Ukraine war) as well as domestic (India-China border dispute) geopolitical scenario calls for strengthening of the national security, which could furtherpush India’s defence expenditure. Moreover,the government’s emphasis on Make in India/Atmanirbhar Bharat initiatives and favorable policies for indigenous players in the defence sector provides strong growth opportunity for BEL.
We retain our Buy rating on BEL with a revised PT of Rs. 268, considering its strong revenue and order inflow guidance for FY2023, backed by its strong order book and promising order pipeline in both defence and non-defence verticals.
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