Bharat Electronics Limited (BEL) has garnered mixed views across brokerages due to its strong Q2 margins, order inflow potential, and pricing.
Nomura: Buy | Target Price: ₹363 | Upside: 35%
Nomura rates BEL as a Buy with a target price of ₹363, indicating a 35% upside. The brokerage is optimistic about BEL’s strong order pipeline, including anticipated annual maintenance contracts and an upcoming order for the quick reaction surface-to-air missile (QRSAM) worth ₹250-300 billion. With a projected revenue growth rate of 15% annually, BEL is well-positioned for steady growth in the defense sector.
Morgan Stanley: Overweight | Target Price: ₹364 | Upside: 35%
Morgan Stanley also favors BEL with an Overweight rating, setting a target price of ₹364. BEL’s Q2 results beat expectations with an EBITDA margin of 30.3%, 7% above estimates. The brokerage expects BEL’s revenue growth to continue at 15% year-over-year, buoyed by a robust defense order backlog, which reflects in the company’s potential for sustainable growth in the medium term.
Jefferies: Broadly Neutral | No Target Price Change
Jefferies noted BEL’s Q2 EBITDA was 36% above expectations, with a margin boost driven by better deliveries, though it retained its existing estimates for future quarters. The brokerage commented that BEL’s quarterly margin tends to fluctuate due to delivery schedules, but the margin strength demonstrates stable profitability.
BEL is generally seen as a strong long-term play in the defense sector, with Nomura and Morgan Stanley both seeing sizable upsides, driven by a growing order book and strong EBITDA. Jefferies noted margin volatility, suggesting careful tracking of quarterly performance.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform due diligence before making investment decisions.
