Bharat Electronics secures 'major orders' worth Rs 695 crore. Details here

Bharat Electronics Ltd (BEL) said on Thursday that it received orders worth Rs 695 crore. "Navratna Defence Public Sector Undertaking, BEL has secured orders worth Rs 695 crore following the last disclosure on July 12, 2024," it said in a release.

"Major orders comprise of Combat Management System, Communication equipment, Stabilized Optronic Pedestal, Upgrades, Spares, Services etc," the release added. "With these, BEL has now accumulated orders totalling Rs 5,920 crore in the current financial year," the defence PSU also stated.

The state-run player reported a 46 per cent year-on-year (YoY) jump in its net profit, at Rs 776.14 crore, for the quarter ended June 30, 2024 (Q1 FY25), with revenue from operations up 19.6 per cent YoY at Rs 4,198.77 crore.

Brokerages largely remained divided on the counter after Q1 FY25 results. JM Financial has maintained its 'Buy' rating on BEL with a target price of Rs 360 on the back of a robust order pipeline over the next couple of years.

"Management reaffirmed its revenue guidance of 15 per cent growth for FY25; with EBITDA margins of 23-25 per cent. BEL will continue to explore new growth opportunities through export initiatives, diversification, capability enhancement, competitiveness and modernisation. Capex planned for FY25 stands at Rs 800 crore," the brokerage stated.

"We maintain 'Buy' rating on stock with TP of Rs 360 valuing it at PE of 45x FY26E (earlier 40x FY26E), factoring in strong order pipeline and defence outlook," JM Financial added.

Nuvama maintained its 'Hold' rating on BEL but mentioned that it does not see much upside potential. "We remain optimistic on India's defence growth story; however, given a notable re-rating across the value chain, we do not see much upside potential despite building in the guided growth rate. Maintain 'Hold' based on 4 per cent/1 per cent revision in FY25E/26E EPS and a valuation rollover to FY27E EPS at 40x, yielding a revised TP of Rs 304 (earlier Rs 270)," it stated.

And, Nirmal Bang Institutional Equities maintained its 'Sell' call on BEL with a target price of Rs 280 citing its steep valuations relative fundamentals. "We anticipate Revenue/EBITDA/PAT CAGR of 16 per cent/18 per cent/15 per cent during FY25E-FY26E. The stock is trading at a 1-year forward P/E of 43x, above the 5-year average P/E of 16x. We had downgraded both the sector and BEL to sell earlier this month on account of extremely steep valuations relative to sector fundamentals. We maintain 'Sell' rating on BEL with a target price (TP) of Rs280, valuing it at 35x June'26E EPS + 2SD above the long-term average," it stated.

BEL shares today shed 0.28 per cent to settle at Rs 304.55. At this closing price, the stock has gained 64.58 per cent on a year-to-date (YTD) basis.