BEL shares: 5 reasons to buy this defence PSU stock; check price targets, risks & more
Domestic brokerage firms continue to remain positive on Bharat Electronics (BEL), the state run defence player. They see up to 33% uspide in the PSU counter.
- Sep 4, 2025,
- Updated Sep 4, 2025 12:37 PM IST
Domestic brokerage firms continue to remain positive on Bharat Electronics (BEL), the state run defence player. They see up to 33% uspide in the PSU counter. SBI Securities has cited five key reasons to 'buy' BEL stock, with a target price of Rs 423.2 on the stock. Here's what the brokerage firm said:
Strong order book: BEL continues to demonstrate its investment potential with a strong order book, standing at Rs 74,859 crore as of June 2025. This represents 3.1 times its FY25 consolidated revenue, showcasing its robust business prospects. Management anticipates a minimum order inflow of Rs 27,000 crore for FY26, excluding the QRSAM order, which could further boost its order book beyond Rs 50,000 crore if finalised by early 2026.
FY26 guidance: BEL's long-term growth outlook remains promising, with plans to increase revenue at a compound annual growth rate (CAGR) of 15.0% to 17.5% over the next five years. The company's collaboration with DRDO on Project Kusha, aimed at indigenising the S-400 air defence system, involves a significant project cost of nearly Rs 40,000 crore, offering substantial growth visibility.
Long-term growth outlook: International market demand is also expected to drive BEL’s export revenues from the current 4-5% to about 10% over the next two to three years. Additionally, BEL's recent receipt of orders worth Rs 10,000 crore and a projected capex of over Rs 1,000 crore for FY26 further underpins its forward-looking strategy.
Strong margins: The company’s FY26 guidance includes a 15% year-on-year revenue growth along with maintaining EBITDA margins at 27%. BEL’s performance in 1QFY26 was bolstered by an expanded EBITDA margin of 27.9%, attributed to favourable product mix changes.
Update on emergency procurement order: BEL has already received 1 - 2 orders under this segment of the total 8 to 10 line items that it expects. The emergency procurement project is worth Rs 40,000 cr in size, which is expected to be finalized by September 2025.
SBI Securities has a cited slowdown in order inflows, delay in large tender finalization and increased competition as the key risk. BEL stock rose nearly 1% to Rs 381.60 on Thursday, commanding a total market capitalization 2.75 lakh crore. The stock is down 12.5% from its 52-week high at Rs 435.95.
Bharat Electronics is an Indian aerospace and defence electronics PSU company, headquartered in Bangalore. It primarily manufactures advanced electronic products for ground and aerospace applications. BEL is one of sixteen PSUs under the administration of the Ministry of Defence of India. The company also has a small presence in the civilian market.
Defence PSUs, contributed the bulk of sector revenue, at 90 per cent of the total, clocking Rs 9,506.6 crore in Q1FY26, up 8.2 per cent YoY. With margin improving on better cost-efficiency and operating leverage, reflecting a steady performance from BEL, said Choice Institutional Equities. It has a 'buy' rating on the stock with a target price of Rs 500 apiece, suggesting a 33 per cent upside.
Domestic brokerage firms continue to remain positive on Bharat Electronics (BEL), the state run defence player. They see up to 33% uspide in the PSU counter. SBI Securities has cited five key reasons to 'buy' BEL stock, with a target price of Rs 423.2 on the stock. Here's what the brokerage firm said:
Strong order book: BEL continues to demonstrate its investment potential with a strong order book, standing at Rs 74,859 crore as of June 2025. This represents 3.1 times its FY25 consolidated revenue, showcasing its robust business prospects. Management anticipates a minimum order inflow of Rs 27,000 crore for FY26, excluding the QRSAM order, which could further boost its order book beyond Rs 50,000 crore if finalised by early 2026.
FY26 guidance: BEL's long-term growth outlook remains promising, with plans to increase revenue at a compound annual growth rate (CAGR) of 15.0% to 17.5% over the next five years. The company's collaboration with DRDO on Project Kusha, aimed at indigenising the S-400 air defence system, involves a significant project cost of nearly Rs 40,000 crore, offering substantial growth visibility.
Long-term growth outlook: International market demand is also expected to drive BEL’s export revenues from the current 4-5% to about 10% over the next two to three years. Additionally, BEL's recent receipt of orders worth Rs 10,000 crore and a projected capex of over Rs 1,000 crore for FY26 further underpins its forward-looking strategy.
Strong margins: The company’s FY26 guidance includes a 15% year-on-year revenue growth along with maintaining EBITDA margins at 27%. BEL’s performance in 1QFY26 was bolstered by an expanded EBITDA margin of 27.9%, attributed to favourable product mix changes.
Update on emergency procurement order: BEL has already received 1 - 2 orders under this segment of the total 8 to 10 line items that it expects. The emergency procurement project is worth Rs 40,000 cr in size, which is expected to be finalized by September 2025.
SBI Securities has a cited slowdown in order inflows, delay in large tender finalization and increased competition as the key risk. BEL stock rose nearly 1% to Rs 381.60 on Thursday, commanding a total market capitalization 2.75 lakh crore. The stock is down 12.5% from its 52-week high at Rs 435.95.
Bharat Electronics is an Indian aerospace and defence electronics PSU company, headquartered in Bangalore. It primarily manufactures advanced electronic products for ground and aerospace applications. BEL is one of sixteen PSUs under the administration of the Ministry of Defence of India. The company also has a small presence in the civilian market.
Defence PSUs, contributed the bulk of sector revenue, at 90 per cent of the total, clocking Rs 9,506.6 crore in Q1FY26, up 8.2 per cent YoY. With margin improving on better cost-efficiency and operating leverage, reflecting a steady performance from BEL, said Choice Institutional Equities. It has a 'buy' rating on the stock with a target price of Rs 500 apiece, suggesting a 33 per cent upside.