Motilal Oswal's research report on Bharat Electronics
BHE reported revenue of INR 20.9b (+37% YoY; est. of INR 18.5b) and operating profit of INR 4.8b (v/s INR 2.8b in 3QFY16; est. of INR 3.4b). Net profit rose 33% YoY to INR 3.7b. Key projects expected to support revenue for FY17 include 3D tactical control radar, Akash weapon systems, L 70 gun upgrade, weapon locating radar, hand-held thermal imager with laser ranger finder, passive night vision device, etc. Management guided for FY17 revenue growth of 10% YoY.
OutlookWe expect BEL to report EPS of INR 62/73/85.5 in FY17/FY18/FY19. Maintain Buy with a TP of INR 1,800 (21x FY19E), which is near its peak historical valuation of 22x, to factor in improved pace of decision making in defense and higher FII limit.
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