Bharat Electronics stock surged, to hit a fresh high at ₹283 on the NSE on Tuesday, after the company reported its financial results for the quarter ended March, 2024. The company reported its consolidated net profit for the quarter ended March, 2024 at ₹1,796.67 crore as against ₹1,382.01 crore in the corresponding quarter ended March, 2023.
Also read:Bharat Electronics reports 33% increase in Q2 net profitThe board has recommended a final dividend of ₹0.80 per equity share of ₹1 each fully paid-up for the financial year 2023-24.
Brokerages callDomestic brokerage, Motilal Oswal has upgraded its rating on the stock from ‘neutral’ to ‘buy’, with a revised target price of ₹310, noting that the company has beat its Q4 FY24 result estimates, driven by better-than-expected EBITDA margin and PAT and strong revenue growth.
The brokerage increased the earnings estimates by 21 per cent/32 per cent factoring in the Government’s continued measures, for the defense sector, and the company’s improving market share, better-than-expected gross margin, and working capital.
“We increase the valuation multiple to account, for a larger market share of BHE, benefits of technology tie-ups, MoUs, and an improving share of exports, and non-defense in total revenues. We value BHE at 35x P/E on two-year forward earnings,” it added.
Analysts of JM Financial Institutional Securities Ltd, remained positive on the stock, given strong order backlog, sustained margin profile, healthy order prospects, and continuous focus on diversification and export markets. “We expect revenue and PAT CAGR of 21 per cent, and 20 per cent over FY24 – FY26E. We maintain ‘buy’ rating on stock with a target price of ₹225, valuing it at a PE of 30x FY26E,” they said.
However, the brokerage, pointed out that the slowdown in Government spends on defence, and execution delays due to supply chain constraints were key risks.
ICICI Direct has been positive on the stock considering the strong order backlog of ₹75,934 crore (3.7x of FY24 revenue). and improvement in overall execution led by increasing indigenisation. Order pipeline also remains robust in defence electronics, giving more confidence on future growth visibility.
Global brokerage, Morgan Stanley has given an ‘overweight’ call on BEL, and revised the target price to ₹300. The brokerage, expects some operational efficiencies to remain sticky, and raised the EBITDA margin estimates to 24-24.5 per cent from 22.5-23 per cent earlier.
Meanwhile, Jefferies and Nomura, have given ‘buy’ rating at a target price of ₹305, and ₹300, respectively.
Also read:BEL records turnover of ₹19,700 croreThe stock traded at ₹278.40 on the NSE, as of 11.22 am, higher by 7.57 per cent.
On the BSE, the stock hit a 52-week high at ₹282.80. As of 11.22 am, the stock traded at ₹278.75, higher by 7.69 per cent.
