Bharat Electronics expects large order inflows from QRSAM, MRSAM, next-generation corvettes, the defense electronics portion from P75 and P75I, and even Kavach-related orders to materialize in the coming years starting from FY26.
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Motilal Oswal Report
Bharat Electronics Ltd.'s Q3 FY25 results came ahead of our estimates on all parameters. Revenue growth was led by a strong order book, which stood at Rs 771 billion. Order inflows stood at Rs 110 billion during 9MFY25. As highlighted in our top pick note, we expect BEL to remain a key beneficiary of defense electronics opportunities of large platform orders across the army, navy, and air force. The company expects large order inflows from QRSAM, MRSAM, next-generation corvettes, the defense electronics portion from P75 and P75I, and even Kavach-related orders to materialize in the coming years starting from FY26.
We expect the company's revenue to post a 19% CAGR over FY24-27 driven by improved market share on account of enhanced wallet share as well as improved indigenized offerings.
We trim our estimates to bake in lower other income and continue to value the company at 35x two-year forward earnings. We reiterate our Buy rating with an unchanged target price of Rs 360.
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