Buy Bharat Electronics; target of Rs 268: Sharekhan

Sharekhan is bullish on Bharat Electronics has recommended buy rating on the stock with a target price of Rs 268 in its research report dated May 25, 2022.

Broker Research

May 30, 2022 / 03:43 PM IST

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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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.

Outlook

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.

For all recommendations report, click here