Bharat Electronics Ltd.'s expansion in operating margin in the first quarter of the current fiscal and a strong order book have kept analysts bullish on the stock.
JPMorgan said the muted revenue growth, which missed estimates, is not a concern, as it is primarily impacted by fluctuations in product delivery rather than underlying business performance.
"Additionally, the March quarter is by far the seasonally strongest quarter. As a result, we do not think we are unduly concerned about revenue growth," a note said.
Moreover, order wins for Bharat Electronics were well ahead of the run rate required to achieve the FY26 guidance of Rs 27,000 crore.
Analysts said management commentary on FY26 and medium-term order inflow, revenue growth, and margin profile will be important when the company holds its earnings call on Wednesday.
In addition, commentary on any orders under emergency procurement and replenishment resulting from the recent conflict will be in focus.
UBS also noted that despite the revenue miss, BEL is on track for FY26 guidance.
BEL Q1FY26 Recap (Consolidated, YoY)
Revenue up 4.6% at Rs 4,439.74 crore versus Rs 4,243.57 crore (Bloomberg estimate: Rs 4,794 crore).
Ebitda up 31% at Rs 1,238.27 crore versus Rs 948.2 crore (Estimate: Rs 1,119 crore).
Margin at 27.9% versus 22.3% (Estimate: 23.3%).
Net profit up 23% at Rs 969.91 crore versus Rs 791 crore (Estimate: Rs 906 crore).
BEL Share Price Traget
JPMorgan
Maintain 'Overweight' with a target price of Rs 490
Morgan Stanley
Maintain 'Overweight' with a target price of Rs 418
UBS
Maintain 'Buy' with a target price of Rs 450
Out of the 29 analysts tracking BEL, 23 have a 'buy' rating on the stock, two recommend a 'hold' and four suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price target of Rs 417 implies a potential upside of 7.3%.
Shares of BEL closed 1.51% lower at Rs 389.25 apiece on the National Stock Exchange before the announcement, compared to a 0.63% fall in the benchmark Nifty. The stock has risen 21% in the last 12 months and 33% on a year-to-date basis.
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