BEL shares hit new high amid Sensex entry buzz; brokerages upgrade rating & targets

Shares of Bharat Electronics (BEL) hit a new 52-week high on Friday as the defence PSU player is set to enter BSE's benchmark index Sensex. It will be replacing IndusInd Bank Ltd in the 30-share pack, which shall come into effect from June 30, 2025. Brokerage firms continue to remain positive on BEL with rating upgrade and revised target prices.

Shares of Bharat Electronics Ltd gained over 1.70 per cent to Rs 389.90 on Friday, hitting its new 52-week highs. The company was commanding a total market capitalization of more than Rs 2.82 lakh crore. The stock had settled at Rs 383.85 on Thursday. Shares of BEL have gained nearly 30 per cent in the last one-month period.

Global Brokerage firm UBS has upgraded BEL to a 'buy' rating as it expects a significant order book acceleration in FY25-28E with Rs 2.4 lakh crore of the long-term pipeline expected to be converted into orders; major platforms that have been integrated/upgraded by BEL are now combat-proven, BEL could book orders/repeat orders in domestic/export markets.

"We value BEL at 45 times 12-month forward PE with a target price of Rs 450 as we believe the long-term pipeline with a faster translation to revenue is underappreciated by the market. We now prefer BEL over Hindustan Aeronautics Ltd based on better expected earnings growth and a sharper ramp of the order book over the next three years," UBS added.

Bharat Electronics reported an 18.4 per cent year-on-year (YoY) rise in its consolidated net profit to Rs 2,127 crore in the March quarter, on account of higher revenues. Its total revenue from operations increased 6.8 per cent YoY to Rs 9,149.6 crore. Ebitda was up 23.2 per cent YoY to Rs 2,816 crore with Ebitda margins improving to 30.8 per cent for the quarter.

Nirmal Bang Institutional Equities also upgraded BEL to 'buy' as it valued the stock at 42 times Mar27E EPS, supported by a healthy order book that is significantly exceeding historical levels. It has a target price of Rs 427 on the stock. BEL being a defence PSU should exceed its FY26 guidance due to a better product mix without supply chain issues, it said.

"We have raised the target multiple above the 5-year average P/E, for the BEL on the back of a robust order book propelled by emergency procurement orders, currently at diverse stages of finalisation; and margins are expected to further increase with higher indigenization of various systems, subsystems as many of these will be manufactured in-house," Nirmal Bang added.

The PSU company's order book as of April 1, 2025, stood at ₹71,650 crore, indicating a strong project pipeline. The firm expects Rs 30,000 crore worth of orders for Quick Reaction Surface to Air Missiles (QRSAM) by March or April next year. The company board announced a final dividend of Rs 0.90 per share.

BEL has significantly ramped up its Capex, increasing its investment from around Rs 600 crore last year to over Rs 900 crore this year. Looking ahead, it plans to invest more than Rs 1000 crore annually in CapEx in the coming years. This increased investment will be directed towards setting up new manufacturing facilities at strategic locations across India, said Anand Rathi Shares & Stock Brokers.

"We expect BEL to see strong growth going forward due to many factors such as moving towards self-reliance in defense, robust pipeline and focus of exports by GOI; strong order inflow to drive the revenue growth; and healthy profitability and return indicators. We maintain a ‘buy’ rating on the stock with a revised target price of Rs 450," it added.