Buy Bharat Electronics, target price Rs 360: JM Financial

JM Financial has a buy call on Bharat Electronics Ltd. with a target price of Rs 360. The current market price of Bharat Electronics Ltd. is Rs 270.15. Bharat Electronics, incorporated in 1954, is a Large Cap company with a market cap of Rs 205989.57 crore, operating in the Defence sector.

Bharat Electronics' products/revenue segments include Electronic Components & Equipments, Sale of services, Other Operating Revenue, Scrap and Rent for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 5957.07 crore, up 25.08 % from last quarter Total Income of Rs 4762.66 crore and up 37.59% from last year same quarter Total Income of Rs 4329.58 crore. The company has reported net profit after tax of Rs 1301.27 Crore in latest quarter.

The company's top management includes Mr.Bhanu Prakash Srivastava, Mr.Gokulan Bangakandy, Dr.Shivnath Yadav, Mr.Prafulla Kumar Choudhury, Dr.N Santhoshkumar, Mr.Mansukhbhai S Khachariya, Dr.P V Parthasarathi, Dr.Binoy Kumar Das, Mr.T Natarajan, Mr.K V Suresh Kumar, Mr.N Vikraman, Mr.S Damodar Bhattad, Mr.Manoj Jain, Mrs.Shyama Singh. The company has Guru & Jana as its auditors. As on 31-12-2024, the company has a total of 731 crore shares outstanding.

Investment Rationale
Bharat Electronics (BEL) reported strong quarterly numbers above JMFe. Revenue came in at Rs 57.6 billion (12.5% above JMFe), EBITDA at Rs 16.5 billion (34.1% above JMFe) and PAT at Rs 13 billion (33.1% above JMFe). YTD order inflows came in at INR 108.9bn, c.43.6% of guided order inflows of Rs 250 billion, however given a few large orders at advanced stage of finalisation, management is confident to meet its FY25 guidance. Order book stands at Rs 711 billion (3.1x TTM revenue). For FY26, large orders like QRSAM (INR 250bn) and MRSAM package (INR 150bn) are expected to be concluded, provides revenue visibility post FY26. BEL continues to explore new growth opportunities through diversification, capability enhancement, competitiveness, modernization and export initiatives.

Promoter/FII Holdings
Promoters held 51.14 per cent stake in the company as of 31-Dec-2024, while FIIs owned 17.34 per cent, DIIs 20.84 per cent.