Sharekhan has given Buy recommendation for Bharat Electronics with a target price of Rs. 268 in its research report issued on May 25, 2022
Sharekhan’s research report on Bharat Electronics
Bharat Electronics Limited (BEL) reported mixed Q4FY2022 performance as sales were in-line with expectations. However, OPM and net profit lagged estimates despite better gross margin. Order inflows during FY2022 grew by ~20% y-o-y to Rs. 18,000 crore with order book closing at Rs. 57,570 crore at ~3.8x its FY22 revenue. The current uncertain international (Russia-Ukraine war) as well as domestic (India-China border dispute) geopolitical scenario calls for strengthening of the national security, which could furtherpush India’s defence expenditure. Moreover,the government’s emphasis on Make in India/Atmanirbhar Bharat initiatives and favorable policies for indigenous players in the defence sector provides strong growth opportunity for BEL.
Outlook
We retain our Buy rating on BEL with a revised PT of Rs. 268, considering its strong revenue and order inflow guidance for FY2023, backed by its strong order book and promising order pipeline in both defence and non-defence verticals.