Bharat Electronics Ltd. share price target

We attended Bharat Electronics (BEL)’s Q2FY24 earnings call. Key points: 1) FY24 guidance for revenue growth, EBITDA margin and order inflow reiterated. 2) Revenue of INR4bn has spilled over to Q3FY24. 3) INR8bn capex likely in FY24. 4) No significant impact expected from the ongoing Israel-Palestine conflict at this stage.

Bharat Electronics’ (BEL) reported a strong Q2FY24 performance despite logistics related disruptions at the month-end. Key points: 1) EBITDA rose 22% YoY at INR10.1bn. 2) EBITDA margin rose 338bps YoY at 25.3%. 3) Deliveries during the quarter were impacted by a two-day strike of transporters in Bangalore in end-Sep’23. 4) Orderbook stood at a healthy INR687bn (3.87x ttm revenue) and implied H1FY24 order inflow was at INR154bn.

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.

Bharat Electronics (BEL) has won incremental orders worth Rs21.9bn in addition to the Rs59bn won earlier in Q1FY24, taking the total order inflow for the quarter to Rs80.9bn.

Bharat Electronics (BEL) has won orders worth Rs59bn thus far in Q1FY24. This is in line with the management’s guidance of Rs200bn of order inflow in FY24 and implies orderbook at the end of Q1FY24 is likely to be higher compared to Q4FY23 level of Rs606.9bn.