Hold Bharat Electronics; target of Rs 1326:Axis securities

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26 Aug, 2025 12:21

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Axis securities's research report on Bharat ElectronicsBharat Electronics’ (BEL) Q3FY16 PAT at Rs 3.0 bn (up 9% YoY) beat our estimate of Rs 2.7 bn despite slower execution (revenue down 6%YoY), driven by lower raw material costs (~50% of sales; down 500 bps). Lower material costs were due to product mix in Q3 and management expects RM cost to stabilize at 56-57% of sales for FY16. Order inflow in Q3 at Rs 128 bn increased by ~15-fold YoY. Major orders during Q3 include Integrated Air Command Control Systems (~Rs 80 bn) and Weapon locating Radar (~Rs 20 bn). BEL’s YTD orders have already exceeded its full year guidance by 50%. Additionally, BEL is expecting finalization of Long range Surface to Air Missile (SAM) order worth >Rs 50 bn in Q4 taking FY16 order inflow to Rs200 bn.BEL’s stock has outperformed the Sensex by 11% in last 6 months.We trim FY16 EPS to Rs52 (Rs54 earlier) and FY17 EPS to Rs 66 (Rs 69 earlier) on lower-than-expected execution (up 4% in 9MFY16). We introduce FY18 EPS of Rs 71. Our TP is Rs1,326 (on 20x FY17E).For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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