Bharat Electronics: Most-valued defence stock is a consistent performer; worth buying BEL?

Bharat Electronics (BEL) has been one of the most consistent performers in the defence sector, delivering a 13 per cent, 20 per cent and 16 per cent compounded growth in revenue, Ebitda and profit, respectively, over FY15–25. Order inflows during the same period grew at a 14 per cent annually, resulting in a strong order backlog of Rs 74,500 crore at the end of H1FY26.

Antique Stock Broking said it is building in revenue, Ebitda and profit CAGRs of 17 per cent, 15 per cent and 14 per cent, respetcively, over FY25–28, broadly in line with the company’s historical performance over the past decade. It suggested a 'Buy' call on the most-valued defence stock on the Dalal Street with a target of Rs 502 apiece. 

The recent correction in BEL’s stock, alongside broader sector weakness, presents an attractive entry point to own a quality defence electronics leader, it said. Antique Stock Broking expects the company to deliver double-digit earnings growth of 14 per cent CAGR over FY25–28E, supported by multiple growth levers including robust infrastructure, strong government relations, and diversification into non-defence businesses.

BEL shares are 30 per cent in the past one and 284 per cent in the past three years. The dence company has guided for Rs 27,000 crore in order inflows (excluding QRSAM) for FY26E and is on track to meet this target, with YTD inflows at Rs 16,600 crore, Antique said.

Key expected orders include next-generation corvette subsystems, Shakti electronic warning and mobile ELINT systems, avionics packages for 97 additional Tejas Mk-1A aircraft, Hammer air-to-ground missiles, and Mountain Radar systems. BEL also expects the QRSAM order worth Rs 30,000 crore in FY26, which could bring total order inflows to an all-time high of Rs 57,000 crore.

Antique said the current order backlog provides revenue visibility equivalent to three times trailing twelve months’ revenue. Medium-term ordering remains healthy, with large-ticket projects such as long-range radars, BMP upgrades, electronic warfare systems, and LRSAM expected to deliver over Rs 40,000 crore in annualised inflows for FY27.

BEL has also forged strategic partnerships to expand its defence revenue streams. The company is working with L&T to support India’s 5th-generation Advanced Medium Combat Aircraft (AMCA), combining L&T’s platform expertise with BEL’s electronics, sensors, and mission-critical systems capabilities. Additionally, BEL entered a joint venture with Safran to manufacture HAMMER (Highly Agile Modular Munition Extended Range) precision-guided weapons in India. Indigenisation of these systems is expected to reach around 60 per cent over time, including sub-assemblies, electronics, and mechanical components, with BEL leading final assembly, testing, and quality assurance.

BEL has planned Rs 1,000 crore in annual capex for FY26 and Rs 2,400 crore over the next three to four years for facility modernization and capacity expansion. Key projects include an electro-optical device facility at Nimmaluru, a land-based electronic warfare system facility at Ibrahimpatnam, and an RF seeker manufacturing facility at Palasamudram, alongside upgrades at the Hyderabad facility. These investments are expected to generate new revenue streams, expand margins, and position BEL for future growth.

Antique Stock Broking expects BEL to sustain strong performance through multiple growth levers, including robust infrastructure, strong government relationships, diversification into non-defence businesses, new manufacturing facilities, and increased R&D focus.