Sharekhan's research report on Bharat Electronics
Defence Acquisiton Council (DAC has cleared five capital acquisition proposals worth Rs 21,772 crore to bolster India’s defence capabilities, leading to additional order pipeline for defence companies over 2-3 years. Proposals have been issued for 1) AoN for Fast Attack Crafts (FAC), Fast Interceptor Crafts (FIC) and ALH (M) MR. 2) Overhaul for tanks and BMPs. 3) Overhaul of Su-30MK-I. Order inflow pipeline is promising, cash balance strong and return ratios are healthy. Strong Q2 makes us factor in estimates of 16%/16% revenue / PAT CAGR for FY24-27, respectively.
Outlook
Hence, we retain a Buy with a PT of Rs. 380. At CMP, the stock trades at 42x/37x its FY2025/FY2026 earnings estimates.
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