Bharat Electronics (BEL) witnessed a 9.35% surge in its shares, reaching ₹283, following robust Q4 and FY24 performances. The company’s net profit saw a remarkable 30% increase to ₹1,797 crore, while revenue experienced a substantial growth of 32.18% to ₹8,564 crore for the quarter. Motilal Oswal has adjusted its target price to ₹310 per share, elevating the rating from ‘Neutral’ to ‘Buy’.
Bharat Electronics (BEL) shares saw a remarkable surge of 9.35% in early trading today, reaching a new peak of ₹283 per share. This surge followed the release of the company’s Q4 and FY24 financial results on Monday, which surpassed analyst expectations. The Navratna Defense PSU reported a 30% increase in consolidated net profit, reaching ₹1,797 crore compared to ₹1,382 crore in the corresponding period last year. Furthermore, revenue from operations for the quarter grew by 32.18% year-on-year to ₹8,564 crore. For the entire fiscal year (FY24), the company reported consolidated revenue from operations of ₹20,268 crore, up from ₹17,734 crore, marking a 14.28% increase. Additionally, net profit for FY24 rose by 33.45% to ₹3,985 crore, compared to ₹2,986 crore in FY23. During FY24, bharat electronics secured orders worth approximately ₹350 billion, including key defense orders such as electronic fuses, EW systems, communication systems for naval warships, fire control systems, Akash Prime weapon systems, radars, sonars, software-defined radios, night vision devices, tactical communication systems, and various projects in the non-defense sector.
Consequently, the order book increased to ₹760 billion, which includes an export order book of $407 million, up from $211 million in FY23.
The Bharat Electronics achieved exports of $93 million, reflecting a 92% year-on-year increase. Notably, BEL holds a market share of 12% in the overall defense market and nearly 60% in the highly specialized defense electronics segment. Domestic brokerage firm Motilal Oswal expects BEL to remain a key beneficiary of India’s defense indigenization potential worth ₹5 trillion over the next five years. Motilal Oswal has upgraded its rating on BEL from ‘Neutral’ to ‘Buy’ following the company’s Q4 and FY24 performance. The brokerage revised its earnings estimates upward by 21% and 32% to account for various factors, including the government’s support for the defense sector, the company’s increasing market share, better-than-expected gross margins, and improved working capital management. Motilal Oswal anticipates a compound annual growth rate (CAGR) of 19% in sales, 20% in EBITDA, and 22% in PAT over FY24–26. The brokerage valued BEL stock at 35x P/E on two-year forward earnings and revised its target price to ₹310 per share.
Presents a lucrative ordering opportunity
Earlier, Japanese brokerage firm Nomura initiated coverage on Bharat Electronics Limited (BEL) with a ‘buy’ rating and set a target price of ₹300 per share. Nomura highlighted the lucrative ordering opportunity in India’s defense sector, which is expected to witness significant growth in demand for defense equipment, technologies, and services over FY24–32. This scenario offers substantial prospects for companies involved in defense production and technology development. The brokerage emphasized that India’s defense capital expenditure is projected to rise to 37% of the total budget by FY30, up from the expected 29% in FY25. This increase translates to a cumulative capital outlay of ₹15.5 trillion over FY24–30, indicating substantial growth compared to previous periods.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Techybaniya. We advise investors to check with certified experts before making any investment decisions.
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