Bharat Electronics Shines in Q3—Strong Growth, Bullish Outlook
Navratna defence giant Bharat Electronics Ltd (BEL) delivered an impressive set of Q3 numbers, with both revenue and profitability surpassing expectations. Backed by a strong order book and expanding margins, the company’s performance has drawn widespread praise from analysts, who remain optimistic about its future growth prospects.
Q3 Performance—Strong Revenue and Profit Growth
BEL reported a 37% YoY increase in revenue, reaching ₹5,643.25 crore for the December quarter. Meanwhile, net profit surged 47% YoY to ₹1,316.06 crore, reflecting strong operational efficiency and execution.
However, the standout metric was BEL’s EBITDA margin, which expanded by 330 basis points YoY to 28.7%, well above the company’s guidance of 23-25% over the past few quarters. This also significantly beat analysts’ expectations of 23.7%, highlighting BEL’s ability to optimize costs and enhance profitability.
Brokerages Stay Bullish on Bharat Electronics
Jefferies: Confident in BEL’s Profitability
Jefferies emphasized that the strong margin performance reinforces confidence in BEL’s long-term profitability. The firm maintained its ‘Buy’ rating on the stock, setting a target price of ₹370.
Nomura: Raises Margin and Earnings Estimates
Nomura responded to BEL’s operational beat by raising its FY25 EBITDA margin estimate by 200 basis points and EPS forecasts by 8%. The firm reiterated its ‘Buy’ call, with a revised price target of ₹363.
Nuvama Institutional Equities: Strong Order Book Supports Future Growth
Nuvama also upped its EPS estimates for FY25-27 by 2-11% and slightly increased its target price to ₹350. The firm remains bullish on BEL, citing its healthy order book of ₹71,100 crore and a robust project pipeline worth over ₹1 lakh crore, which provides strong visibility for future growth.
BEL Management Confident About Future Prospects
BEL’s management remains optimistic about securing fresh order inflows of ₹25,000 crore by the end of FY25, a significant jump from the current ₹11,000 crore.
Despite this positive outlook, the company has opted to retain its FY25 sales and margin guidance, taking a conservative stance. However, analysts at Nomura still expect heavy ordering activity in Q4, reinforcing their confidence in BEL’s near-term growth.
Nuvama Picks BEL as Top Defence Stock
Nuvama has identified BEL as its top pick in the defence sector, highlighting the company’s consistent execution, higher localization efforts, and cost efficiencies as key drivers for long-term earnings growth. The brokerage also believes BEL has more positive catalysts than risks, suggesting further potential for a valuation re-rating.
Stock Market Reaction
Following the strong Q3 results, Bharat Electronics Ltd (BEL) shares surged over 4% on Thursday, closing at ₹278.75 on the NSE.
With a hefty order book, improving margins, and strong execution, Bharat Electronics is well-positioned to sustain its growth momentum, keeping investors and analysts bullish on the stock.