Bharat Electronics Limited (BEL), the Navratna defence PSU, has reported stellar Q3 results for FY24, surpassing market expectations with strong revenue growth, solid execution, and a significant margin beat. The company’s performance has garnered praise from brokerages, leading to a bullish outlook on its stock.
BEL Q3 Earnings: Key Highlights
BEL recorded a 37% year-on-year (YoY) rise in revenue, reaching ₹5,643.25 crore, while its net profit surged by 47% to ₹1,316.06 crore in the December quarter. However, the biggest surprise was the 330 basis point (bps) expansion in EBITDA margins, which rose to 28.7%, exceeding the company’s previous guidance of 23-25% and beating Street expectations of 23.7%.
Brokerages Remain Bullish on BEL
Several brokerage firms have reacted positively to BEL’s Q3 earnings, raising their price targets and reaffirming their bullish stance on the stock.
- Jefferies has retained its ‘buy’ call with a target price of ₹370, citing the company’s strong margin performance as a key driver of sustainable profitability.
- Nomura has revised its FY25 EBITDA margin estimates up by 200 bps and increased its earnings-per-share (EPS) forecast by 8%, leading to a new price target of ₹363.
- Nuvama Institutional Equities has also raised its FY25-27 EPS estimates by 2-11% and marginally hiked its price target to ₹350.
Stock Performance and Market Reaction
BEL shares continued their upward momentum following the Q3 results, gaining nearly 3% on January 31 after a 4% rise in the previous session. At 9:32 AM, BEL shares were trading at ₹284.30 on the NSE, reflecting investor confidence in the company’s long-term growth prospects.
Future Growth Prospects: Strong Order Book and Execution
BEL’s management remains optimistic about the company’s growth trajectory, projecting order inflows of ₹25,000 crore by the end of FY25, compared to the current ₹11,000 crore. CMD Manoj Jain emphasized that several major projects are in the pipeline, with strong execution expected in the coming months.
Despite the upbeat earnings, the company has maintained its sales and margin guidance for FY25, taking a cautious approach. However, brokerage firms like Nomura anticipate heavy ordering activity in Q4, which could further boost the company’s financials.
Why BEL is a Top Pick for Investors
BEL’s robust order book of ₹71,100 crore and a project pipeline exceeding ₹1 lakh crore provide significant growth visibility. Nuvama has highlighted BEL as its top sectoral pick, citing its 3.5x FY24 sales order book, strong execution capabilities, high localization, and cost efficiency improvements as key factors driving sustained earnings momentum.
“BEL has more positive catalysts than risks, with further potential for re-rating given its consistent profitability outperformance,” noted Nuvama in its research report.
Conclusion
Bharat Electronics’ Q3 results reaffirm its position as a dominant player in the Indian defence sector, with strong earnings growth, expanding margins, and a healthy order book. With bullish brokerages and sustained government defense spending, BEL remains an attractive stock for long-term investors.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult with certified financial experts before making any investment decisions.
