Bharat Electronics Ltd. share price target

Bharat Electronics (BHE)’s 3QFY25 results came ahead of our estimates on all parameters. Revenue growth was led by a strong order book, which stood at INR771b. Order inflows stood at INR110b during 9MFY25.

We recommend a BUY rating on the stock with a TP of Rs 315/share, implying an upside of 10% from the CMP.

We continue to remain positive on Bharat Electronics (BEL) given 1) its market leadership in defense electronics and ability to benefit from defense indigenization as well as from the upcoming large defense platform orders (QRSAM, MRSAM, Tejas Mk1A, naval platforms, etc.), 2) a strong order book of INR746b as of 2QFY25-end, providing healthy visibility on revenue,

The DAC has greenlit five proposals critical to enhancing India’s defence preparedness - 1) AoN for 31 new water jet Fast Attack Crafts (FAC), 120 Fast Interceptor Crafts (FIC) and 6 ALH (M) MR likely to boost maritime surveillance capabilities. 2) Overhaul for tanks and BMPs to enhance life of armored fleet of Indian Army.

Revenues grew by 14.9% y-o-y to Rs. 4,605 crore with margins expansion of 510 bps y-o-y. Results outperformed expectations on margin front. Higher revenue and margin led to PAT growth of 38% y-o-y to Rs. 1092 crore. Revenue growth guidance is at 15% and OPM at 23-25% for FY2025.

Bharat Electronics (BHE)’s 2QFY25 results came ahead of our estimates, driven by better-than-expected margin performance. Revenue growth was led by a strong order book, which stood at INR746b.

BHE’s 1QFY25 results came ahead of estimates, driven by better-than-expected revenue and PAT. Revenue growth was led by a strong order book.

Despite the reduced majority, we expect that the upcoming government’s policy focus on investment-led growth, capex, infrastructure, manufacturing, and defense will continue. Particularly for the defense sector, the government initiated several initiatives in last 3-4 years, such as indigenization, higher private sector participation, and increasing defense exports, and we expect a similar focus to continue going forward too.