In Q1FY24, the state-owned company, Bharat Electronics Limited (BEL), witnessed impressive financial performance. It achieved a remarkable 12.5% (YoY) revenue growth, reaching Rs 3,446 crore.
Following the strong financial results, BEL’s shares surged by 3 per cent, touching an all-time high of Rs 131 per share during Friday’s intra-day trade. The net profit for the April-June quarter of fiscal year 2023-24 (Q1FY24) saw a significant jump of 23% YoY, reaching Rs 530.8 crore.
So far in CY23, BEL’s shares have outperformed the market, soaring over 32%, in comparison to the 9% surge in the S&P BSE Sensex.
The company’s EBITDA also demonstrated robust growth, rising by 29.4% YoY to Rs 664.4 crore. Consequently, the EBITDA margin expanded to 18.9% in the June quarter, up from 16.5% in the same period the previous year.
BEL’s order book position as of July 1, 2023, stood at an impressive Rs 65,356 crore, signifying a positive outlook for future growth.
Analysts at Prabhudas Lilladher maintain a positive stance on BEL’s strong order book, diversification into newer business verticals such as medical equipment, hydrogen fuel cells, EV batteries, product indigenisation, and its focus on export markets as key drivers of future growth.
On the other hand, ICICI Securities believe that BEL’s strategy of diversifying into non-defence sectors, increasing exports, and focusing on services is expected to aid long-term growth and de-risk its business. They maintain a ‘buy’ recommendation on the stock with a target price of Rs 160 per share.
However, analysts caution that BEL’s primary dependence on the ministry of defence, delays in customer advances, and heavy reliance on foreign supplies for sub-systems could potentially hinder its growth prospects.