Bharat Electronics shares fall over 3% after Q1 results. Here's what Nomura, Motilal Oswal and other brokerages say

Shares of defence major Bharat Electronics (BEL) declined 3.5% to Rs 394 on the BSE on Tuesday after the company reported a consolidated net profit of Rs 1,054.53 crore for the first quarter of FY27, up nearly 9% year-on-year (YoY) from Rs 969.91 crore in the corresponding period last year.

On a sequential basis, however, net profit declined nearly 52% from Rs 2,225 crore reported in Q4 FY26. Revenue from operations rose around 25% YoY but fell 46% QoQ to Rs 5,546.98 crore in the April-June quarter of FY27.

BEL's total income increased more than 24% YoY to Rs 5,716.54 crore during the quarter, while falling nearly 45% sequentially. Total expenses rose 30% YoY to Rs 4,320 crore. The company's earnings per share (EPS) stood at Rs 1.44 in Q1 FY27, compared with Rs 1.33 in Q1 FY26 and Rs 3.04 in Q4 FY26.


Buy, sell or hold BEL shares?
Nomura has maintained a Neutral rating on Bharat Electronics (BEL) with a target price of Rs 454, implying an upside of about 11%. The brokerage believes emerging opportunities and the company's focus on indigenisation remain key growth drivers.

Although BEL did not emerge as the L-1 bidder for the system integrator role in the Netra 2 project, Nomura noted that the company will continue to contribute through its subsystem-level capabilities.

The brokerage also highlighted strong growth prospects in emerging segments such as drones and counter-drone systems, where BEL is expanding its presence by focusing on more complex solutions. In addition, management expects its continued emphasis on indigenisation to support sustainable margins by mitigating the impact of rising material costs.

Also read: HDFC Defence Fund increase stake in HAL, Bharat Electronics & 6 other stocks in April

Motilal Oswal has reiterated its Buy rating on BEL and raised its target price to Rs 530 from Rs 510, implying an upside of about 30%. The brokerage expects the defence PSU to benefit from several large platform orders from the Army, Navy and Air Force over the next few years.

Factoring in the company's growth outlook, Motilal Oswal expects BEL to deliver a 15% CAGR in revenue, 14% CAGR in EBITDA and 15% CAGR in PAT over FY26-29. The revised target price is based on 45x September 2028 estimated earnings.

Elara Capital has maintained its Accumulate rating and increased its target price to Rs 480 from Rs 465, implying an upside of around 18%. The brokerage has retained its FY27E-FY29E EPS estimates and rolled forward its valuation by a quarter, maintaining an unchanged 42x June FY28E P/E multiple.

Elara cited BEL's healthy revenue growth guidance, improving margins, robust order pipeline over the next two years, battle-tested product portfolio and expanding export opportunities as key positives. It expects the company to deliver a 17% earnings CAGR over FY26-29, with average ROE and ROCE of 26% during FY27E-FY29E. Key risks include lower defence spending and delays in large order awards such as QRSAM.

Dolat Capital has also retained its Buy rating on BEL with a target price of Rs 490, implying an upside of about 20%. While the brokerage said the company delivered a strong revenue beat in Q1FY27, profitability fell short of expectations due to margin pressure.

Reflecting the margin miss, Dolat Capital has cut its FY27E and FY28E PAT estimates by 5% and 4%, respectively, while making a marginal upward revision to its revenue forecasts.

BEL share price performance
BEL shares have slipped marginally over the past week and month but are still up a little over 2% so far in 2026. The stock has gained around 3% over the past year, while delivering multibagger returns of 220% in three years and 567% over five years. The company ended Monday's session with a market capitalisation of Rs 2.97 lakh crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)