Buy Bharat Electronics; target of Rs 360: Motilal Oswal

Motilal Oswal is bullish on Bharat Electronics recommended buy rating on the stock with a target price of Rs 360 in its research report dated January 16, 2025.

Broker Research

January 17, 2025 / 12:26 IST

Buy

Motilal Oswal's research report on Bharat Electronics

We continue to remain positive on Bharat Electronics (BEL) given 1) its market leadership in defense electronics and ability to benefit from defense indigenization as well as from the upcoming large defense platform orders (QRSAM, MRSAM, Tejas Mk1A, naval platforms, etc.), 2) a strong order book of INR746b as of 2QFY25-end, providing healthy visibility on revenue, 3) stable margins and control over working capital, and 4) healthy return ratios. Despite BEL’s overall FY25YTD orders of INR103b being lower than last year’s, we expect the company to gain from the further ramp-up in defense orders in the coming months. The recent DAC approvals augur well for the sector and emphasize the government’s focus on defense indigenization. The company is continuously expanding its presence across new areas via its SBUs. It is also focusing on improving the share of exports and non-defense projects in the overall order book.

Outlook

We tweak our estimates to bake in slightly lower ordering estimates and roll forward our TP to 35x Mar’27 estimates. Reiterate BUY with a TP of INR360.

For all recommendations report, click here