Buy Bharat Electronics; target of Rs 504: Geojit Financial Services

Geojit Financial Services is bullish on Bharat Electronics has recommended buy rating on the stock with a target price of Rs 504 in its research report dated November 19, 2025.

Broker Research

November 19, 2025 / 11:29 IST

Buy

26 Aug, 2025 12:21

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Geojit Financial Services research report on Bharat Electronics

Bharat Electronics Ltd. (BEL) is a Navaratna enterprise with a 37% market share in Indian defence electronics. BEL’s core capabilities are in radar & weapons systems, defence communication & electronic warfare. BEL delivered robust revenue growth of 26% YoY in Q2FY26, driven by strong execution across key programs such as LRSAM, Himshakti, Akash Army, and LCA avionics. As a result, net profit rose 18% YoY, coming in ahead of expectations. EBITDA rose 22% YoY, while gross margin contracted 230 bps on account of higher material costs and product mix. However, operating efficiencies cushioned the impact, limiting margin erosion to 90 bps, at 29.4%. The current order backlog is Rs. 74,453cr (2.6x FY26E sales), provides a strong earnings visibility for the next 3 years. BEL’s EBITDA margin guidance of >27% appears achievable, supported by product mix, rising indigenous content and cost optimisation. We forecast earnings to grow at a 21% CAGR over FY25–27E.

Outlook

Upcoming opportunities in AMCA and UAV platforms, along with export expansion (target 10% of turnover in 3 years), strengthen long-term prospects. We value BEL at 48x FY27E EPS and maintain a BUY rating with a target price of Rs.504.

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