Bharat Electronics Gets Target Price Hike From JPMorgan On Steady Order Flow

Bharat Electronics Ltd. received a target price upgrade to Rs 490 against Rs 445 earlier from JPMorgan on a steady stream of orders amid elevated geopolitical risks. "Proven quality (of orders) and an expanded opportunity set have been re-rating catalysts", according to the brokerage.

The research firm believes that the company will continue its outperformance noting that "the stock is up 39% Calendar Year-To-Date, outperforming the Nifty 50 by 33%. A steady stream of orders, elevated geopolitical risks both in India and globally and strong medium-term growth prospects (15-17% revenue Compound Annual Growth Rate) with healthy Return on Equities (25%+) should continue to lead to outperformance."

JPMorgan also highlighted the company's efficiency in the recent conflict between India and Pakistan, stating that it underlined the skills and capabilities of Bharat Electronics. "We believe that this was a pivotal moment for widespread recognition of BEL's capabilities in the field of air defense systems, integrated command and control systems, surface to air missiles, various types of radars and surveillance systems and electronics warfare suits. The precision and reliability on display opened the doors not only for replenishment orders (which are awaited) from the Indian armed forces but also for exports of these systems", it remarked.

Emergency procurement orders on the anvil, rigorous indigenisation program and development of in-house technology, diversified business, are some of the other factors aiding the public sector company's robust growth, according to the brokerage.