January 31, 2017 / 17:05 IST
The company reported strong Q3FY17 numbers, which were above our estimates on all fronts. BEL reported revenues of Rs 2191.3 crore, up 44.4% YoY (our estimate: Rs 1913 crore for Q3FY17). We believe the company reported superior topline growth due to higher execution of orders like Akash Weapon System (Army), hand held thermal imagers, 3D tactical control radar, weapon locating radar, etc.
OutlookContinuous order inflows and BEL’s track record in execution give us reasonable confidence about the continued stable performance of the company. Accordingly, we expect BEL to deliver sales and PAT CAGR of 15% and 9%, respectively, in FY16-19E. Given the sharp run up in price over the last few quarters and consequent re-rating of BEL, we believe returns from here on are likely to be gradual. We have rolled our valuations to FY19E and value BEL at Rs 1651 (Rs 1600 earlier) i.e. 21x P/E on FY19E EPS of Rs 78.6 and recommend HOLD on the company.
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