Bharat Electronics (BEL) has reported a mixed quarterly performance, according to a research report by Prabhudas Lilladher. The company demonstrated a 1.2% YoY revenue growth and an expansion in EBITDA margins to 25.2%, slightly impacted by delayed executions worth Rs4bn pushed to H2FY24.
In the first half of FY24, BEL recorded order inflows of ₹154 billion, indicating its ability to meet the projected inflow guidance of over ₹200 billion for FY24. The company's tender pipeline comprises various programs including shipbuilding projects with CSL (OTC:CSLLY) & GRSE valued at ₹25 billion, an electronic warfare system worth ₹20 billion, and a tank upgrade programme costing ₹30 billion.
BEL's export revenue for H1FY24 stood at $27 million, with the firm aiming to hit $90 million by the end of FY24. The company is particularly focusing on expanding in markets such as Egypt and Malaysia.
Despite the mixed quarter, BEL is maintaining its FY24 revenue growth guidance at 15-17% and EBITDA margin at 21-23%. Currently, the stock trades at a PE of 28.8x/24.2x/20.9 for FY24/25E26E with a revised target price of ₹143 from an earlier ₹140, retaining an 'Accumulate' rating.
The company's growth is closely tied to its robust order backlog, diversification into new sectors such as hydrogen fuel cells and EV batteries businesses, focus on exports, and the Indian government's push for product indigenization.
InvestingPro Insights
Drawing from InvestingPro's real-time data and expert tips, Bharat Electronics (BEL) presents a compelling investment case. With a market cap of $11,997.98 million and a P/E ratio of 30.03, BEL stands strong in the Aerospace & Defense industry. The company's revenue growth as of Q2 2024 is a steady 6.01%, with gross profit margins impressing at 44.1%.
InvestingPro Tips highlight that BEL consistently increases its earnings per share and holds more cash than debt on its balance sheet. In addition, the company has raised its dividend for 3 consecutive years, further solidifying its financial stability. These factors are directly related to the article, as they underline BEL's robust financial performance and its potential for future growth.
InvestingPro offers many more tips, with a total of 17 insightful tips available for BEL. These could provide additional guidance for investors considering BEL. The company's strong financial performance and strategic focus on diversification and exports make it a promising investment opportunity.
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