Buy Bharat Electronics; target of Rs 150 : ICICI Securities

Buy

ICICI Securities research report on Bharat Electronics

Bharat Electronics (BEL) has reported a healthy Q1FY24 performance. Key points: 1) Strong execution as revenue grew 12% YoY on a high base of Q1FY23; 2) EBITDA margin came in at 19%, up 240bps YoY; 3) orderbook as of Jun’23 end stood at record INR 653.6bn, implying book to bill of comfortable 3.7x; and 4) order inflow of INR 81.1bn in Q1FY24 with good visibility for meeting the guidance of INR 200bn of inflow in FY24. Going ahead, we see BEL at a vantage position with big-ticket orders for QRSAM, MRSAM and naval platforms due in FY25 that would provide a multi-year revenue growth opportunity in the medium term.

Outlook

We maintain BUY on BEL with an unchanged TP of INR 150 on 27x FY25E EPS and recommend it as our top pick in the defence space.

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Bharat Electronics - 31 -07 - 2023 - isc