Defence PSU stock: Nifty's BEL trades at 263% premium! Still worth a buy?

Bharat Electronics Ltd (BEL) has surged 46 per cent in 2025 so far, making it one of the top-performing Nifty stocks this year. Despite the sharp rally, analysts remain broadly positive on the defence PSU, citing its robust order book, strong project pipeline, and proven execution capabilities.

According to Motilal Oswal Financial Services (MOFSL), the stock is currently trading at a P/E multiple of 47.9 times, well above its historical average of 13.2x—a premium of 263 per cent. On a price-to-book basis, BEL trades at 11.5x, compared with its long-term average of 3.1 times.

BEL offers radars, communication systems and electronic warfare and accounted for 21 per cent of India's total defence manufacturing in FY25. The stock has 15 'Strong Buy' and five 'Buy' recommendations against two 'Sell' and only 1 'Strong Sell' calls, as per Trendlyne data.

BEL, said InCred Equities, is emerging as a key beneficiary of the SBS-III satellite program, as the defence PSU expands aggressively into space electronics. The company has signed MoUs with ISRO’s Space Applications Centre to manufacture indigenous space-grade components, including travelling-wave tube amplifiers (TWTAs) and radar electronics.

“These devices are exactly the kind of components needed for satellite radar and communication systems. The TWTAs, developed by ISRO and built by BEL, are integral to satellite communication/navigation and microwave sensing radar payloads,” said InCred Equities. The brokerage expects BEL to secure orders for building or co-designing radar/imaging systems for SBS-III satellites, as well as associated ground-segment equipment.

According to InCred, each satellite under the SBS-III program is likely to carry BEL-made electronics, positioning the company as a clear winner in India’s space-based surveillance push. Beyond satellites, BEL’s legacy in ground-based radars and avionics could translate into new contracts for data links and control terminals as the space ecosystem expands.

InCred Equities has an ‘Add’ rating on BEL, with a target price of Rs 459.

On June 25, Choice Broking said it remained optimistic on BEL, given its robust order book stands at Rs 71,650 crore, which was 3 times FY25 revenue. 

"We believe the companies order inflow will gain traction due to emergency procurement and speeding up the existing projects. supported by marquee upcoming projects such as the Rs 30,000 crore QRSAM order and the Rs 40,000 crore Project Kusha. The company’s diversified pipeline, including NGC subsystems, additional LCA orders, and critical defense systems like LRSAM & radar solutions, positions it well for sustained revenue growth and market leadership," it said.

The brokerage introduced FY28E estimates and, based on the average FY27/28E EPS, revised its target price to Rs 500 from Rs 420, valuing the stock at 40 times.