BEL shares: Macquarie maintains 'Outperform', sees 44% upside; check target price, Q2 preview

Shares of Bharat Electronics Ltd (BEL) were last seen trading 0.53 per cent higher at Rs 381.90 in Wednesday's trade. Macquarie maintained its 'Outperform' rating on the defence PSU stock, with a 12-month target price of Rs 550, implying a potential upside of 44.01 per cent from the mentioned market price.

In its flash note, Macquarie said BEL has secured new orders worth Rs 530 crore since its last disclosure on September 17. The orders include communication equipment, avionics, cybersecurity solutions, drones, jammers, software solutions, upgrades, spares and services.

With these additions, BEL's order inflow for FY27 stood at Rs 7,400 crore, down 53 per cent year-on-year (YoY).

Macquarie's 'Outperform' rating is supported by BEL's strong order backlog of Rs 72,300 crore and the brokerage's FY27 order inflow forecast of Rs 55,000 crore.

BEL Q2 preview

JM Financial expects BEL to report 10 per cent YoY revenue growth in the second quarter of FY27, in line with the company's typical quarterly seasonality.

The brokerage believes gross margin could remain stable sequentially, while operating leverage could lead to an improvement in EBITDA margin quarter-on-quarter (QoQ).

JM Financial estimates BEL's Q2 FY27 order inflows at Rs 3,100 crore. Along with the Rs 3,750 crore of order inflows reported in Q1 FY27, this would account for 27 per cent of the management's order inflow guidance of Rs 25,000 crore, excluding the Quick Reaction Surface to Air Missile (QRSAM) programme.

"Any updates on the timeline of potential order for Quick Reaction Surface to Air Missile (QRSAM) would be the key to monitor for the quarter," JM further stated.