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Nirmal Bang Report
Despite the rich valuation, the brokerage firm Nirmal Bang has maintained its Buy rating on Bharat Electronics Ltd., valuing the stock at 42 times Mar-28E earnings per share (+1.5SD above the long-term mean), to arrive at a target price of Rs 497. This implies an upside potential of ~20% from current levels.
The stock currently trades at a 1-year forward P/E of 43x FY27E, significantly above its 5-year historical average of ~28x.
BEL delivered a healthy Q4 FY26 performance with revenue, Ebitda, and PAT growing 12%, 6%, and 5% YoY to Rs 10,200 crore, Rs 2,900 crore, and Rs 2,200 crore, respectively, materially surpassing our estimates of Rs 9,280 crore, Rs 2,570 crore, and Rs 1,920 crore.
Revenue growth was driven by robust execution across key defence programs including LRSAM, LRUs for LCA Mk1A, BMP-2 upgrades, and Ashwini radar systems.
Ebitda margin moderated to 29.2% from 30.8% in Q4 FY25 due to a 37% YoY increase in other expenses owing to certain provisions.
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