Bharat Electronics: Why few brokerages downgraded this multibagger PSU after a strong Q2
BEL Q2 results & target prices: State-run defence major Bharat Electronics has seen some downgrades even as the company reported a strong set of performance in the September 2025 quarter.
- Nov 3, 2025,
- Updated Nov 3, 2025 10:57 AM IST
BEL Q2 results & target prices: State-run defence major Bharat Electronics (BEL) has seen some downgrades even as the company reported a strong set of performance in the September 2025 quarter. Some analysts have turned wary over the valuation of the Nifty50 constituent but have lifted the target price. Others, however, continue to remain positive.
Bharat Electronics reported a net profit of Rs 1,286 crore, up 18 per cent on a year-on-year (YoY) basis. Its revenue increased 26 per cent YOY to Rs 5,764 crore for the reported period. Ebitda for the quarter came in at Rs 1,695.6 crore, up 22 per cent YoY. However margins contracted 90 bps to 29.42 per cent, with an healthy order inflows and orderbook.
Revenue, Ebitda, and PAT are expected to clock CAGR of 19 per cent, 18 per cent, and 18 per cent, respectively. BEL is transitioning from a component and subsystem supplier to a system integrator for advanced defense platforms, significantly enhancing its position within the strategic value chain, said Nirmal Bang Institutional Equities.
This evolution, coupled with diversified engagement across the Army, Navy, and Air Force, reinforces its long-term institutional strength. Furthermore, recent Defense Acquisition Council approvals are expected to translate into orders exceeding Rs 50,000 crore, further strengthening BEL’s already robust order pipeline and growth visibility, Nirmal Bang said.
Given the sharp run-up and limited near-term upside, we downgrade the stock to 'hold' as it is now close to our target price. Nevertheless, we remain structurally positive on the company, supported by its execution track record and confidence in achieving guided growth metrics. We value BEL at 42 times September 27E EPS, arriving at a target price of Rs 470," it added.
Shares of Bharat Electronics dropped nearly 3.5 from day's high at Rs 431.15 to Rs 416.40 on Monday. The company's total market capitalization stood close to Rs 3.10 lakh crore. The stock is marginally shy from its 52-week high at Rs 435.95 hit in July 2025.
Bharat Electronics (BEL) reported a better-than-expected performance in 2QFY26 on all fronts and surprised positively on the Ebitda margin. Order inflow for H1FY26 was Rs 12,500 crore, up 68.5 per cent YoY. Order book stands at Rs 74,500 crore. The management maintained its revenue growth guidance of 15 per cent, with Ebitda margin of 27 per cent for FY26, said JM Financial.
"Execution of QRSAM order is expected to start from FY28. BEL continues to explore new growth opportunities through diversification, capability enhancement, competitiveness, modernisation and export initiatives. Due to the recent runup in stock price, resulting in high valuation, we downgrade the stock to 'add' (buy earlier)," it added with a revised target price of Rs 470.
Shares of BEL have remained largely flat in the last one month, but the stock has surged 35 per cent in the last six months period and is up nearly 45 per cent on a year-to-date basis. It has gained almost 50 per cent in the last one year, while has soared nearly 1,300 per cent in the last 5 years, turning into a multibagger stock.
Bharat Electronics delivered robust Q2FY26 performance. Management reaffirmed FY26 guidance, lending comfort, said Nuvama Institutional Equities. It retained ‘buy’ as its top pick on consistent margin outperformance and order accretion. Higher localisation content, a favourable product mix and cost/operational efficiencies shall bolster earnings momentum.
Concerns over BHE’s plateauing order book seem unwarranted as despite order book growing at a CAGR of 9 per cent during FY23-1HFY26, the company has consistently grown its revenue by 14-17 per cent over the same period, supported by strong inflows, except in FY25, said Motilal Oswal Financial Services.
"The future order pipeline also remains strong, driven by orders from the AoNs. This will be further supported by largesized order prospects from QRSAM, project Kusha and next-generation corvettes and export opportunities in future. We also expect margin performance to remain strong, led by project mix and indigenization," it added with a 'buy' rating and a target price of Rs 500.
"We maintain our positive stance on Bharat Electronics, underpinned by its robust long-term growth visibility, supported by a healthy order book and a strong pipeline," said Choice Broking, reiterating ‘buy’ rating with a target price of Rs 500. "We value the stock at 40 time FY27–28E average EPS," it said.
BEL Q2 results & target prices: State-run defence major Bharat Electronics (BEL) has seen some downgrades even as the company reported a strong set of performance in the September 2025 quarter. Some analysts have turned wary over the valuation of the Nifty50 constituent but have lifted the target price. Others, however, continue to remain positive.
Bharat Electronics reported a net profit of Rs 1,286 crore, up 18 per cent on a year-on-year (YoY) basis. Its revenue increased 26 per cent YOY to Rs 5,764 crore for the reported period. Ebitda for the quarter came in at Rs 1,695.6 crore, up 22 per cent YoY. However margins contracted 90 bps to 29.42 per cent, with an healthy order inflows and orderbook.
Revenue, Ebitda, and PAT are expected to clock CAGR of 19 per cent, 18 per cent, and 18 per cent, respectively. BEL is transitioning from a component and subsystem supplier to a system integrator for advanced defense platforms, significantly enhancing its position within the strategic value chain, said Nirmal Bang Institutional Equities.
This evolution, coupled with diversified engagement across the Army, Navy, and Air Force, reinforces its long-term institutional strength. Furthermore, recent Defense Acquisition Council approvals are expected to translate into orders exceeding Rs 50,000 crore, further strengthening BEL’s already robust order pipeline and growth visibility, Nirmal Bang said.
Given the sharp run-up and limited near-term upside, we downgrade the stock to 'hold' as it is now close to our target price. Nevertheless, we remain structurally positive on the company, supported by its execution track record and confidence in achieving guided growth metrics. We value BEL at 42 times September 27E EPS, arriving at a target price of Rs 470," it added.
Shares of Bharat Electronics dropped nearly 3.5 from day's high at Rs 431.15 to Rs 416.40 on Monday. The company's total market capitalization stood close to Rs 3.10 lakh crore. The stock is marginally shy from its 52-week high at Rs 435.95 hit in July 2025.
Bharat Electronics (BEL) reported a better-than-expected performance in 2QFY26 on all fronts and surprised positively on the Ebitda margin. Order inflow for H1FY26 was Rs 12,500 crore, up 68.5 per cent YoY. Order book stands at Rs 74,500 crore. The management maintained its revenue growth guidance of 15 per cent, with Ebitda margin of 27 per cent for FY26, said JM Financial.
"Execution of QRSAM order is expected to start from FY28. BEL continues to explore new growth opportunities through diversification, capability enhancement, competitiveness, modernisation and export initiatives. Due to the recent runup in stock price, resulting in high valuation, we downgrade the stock to 'add' (buy earlier)," it added with a revised target price of Rs 470.
Shares of BEL have remained largely flat in the last one month, but the stock has surged 35 per cent in the last six months period and is up nearly 45 per cent on a year-to-date basis. It has gained almost 50 per cent in the last one year, while has soared nearly 1,300 per cent in the last 5 years, turning into a multibagger stock.
Bharat Electronics delivered robust Q2FY26 performance. Management reaffirmed FY26 guidance, lending comfort, said Nuvama Institutional Equities. It retained ‘buy’ as its top pick on consistent margin outperformance and order accretion. Higher localisation content, a favourable product mix and cost/operational efficiencies shall bolster earnings momentum.
Concerns over BHE’s plateauing order book seem unwarranted as despite order book growing at a CAGR of 9 per cent during FY23-1HFY26, the company has consistently grown its revenue by 14-17 per cent over the same period, supported by strong inflows, except in FY25, said Motilal Oswal Financial Services.
"The future order pipeline also remains strong, driven by orders from the AoNs. This will be further supported by largesized order prospects from QRSAM, project Kusha and next-generation corvettes and export opportunities in future. We also expect margin performance to remain strong, led by project mix and indigenization," it added with a 'buy' rating and a target price of Rs 500.
"We maintain our positive stance on Bharat Electronics, underpinned by its robust long-term growth visibility, supported by a healthy order book and a strong pipeline," said Choice Broking, reiterating ‘buy’ rating with a target price of Rs 500. "We value the stock at 40 time FY27–28E average EPS," it said.