Bharat Electronics’ performance in the first six months of this financial year has been excellent. The company’s margin has increased. Revenue growth has been in double digits. Its shares are held on the shares of the company. This year this stock has risen by about 34 percent. But, it is much below the high of Rs 435 in July this year. But, given the record order book and expectations of a better second half, the stock looks attractive.
BEL’s order book is worth Rs 75,600 crore. This is almost three times the company’s annual revenue. Beyond this, the picture regarding earnings looks good. During this financial year the company has secured new orders worth Rs 14,750 crore. The company is expected to get orders worth Rs 15,000 crore for the Next Generation Corvette program and avionics packages from HAL.
The company’s revenue growth in the first half of FY26 stood at Rs 10,231 crore, up 15.6 per cent year-on-year. EBIDA margin increased 220 basis points to 28.7 percent. Operating leverage and higher indigenisation are involved in this. The company’s management has given margin guidance of more than 27 percent for the full year. The execution pace is expected to pick up in the next half of this financial year.
The company is also exploring growth opportunities outside the domestic markets. It is moving forward in the value chain. It has transformed from a pure-play module supplier to a system-level contributor. Its strategic collaboration with L&T on the Advanced Medium Combat Aircraft (AMCA) program is proof of this. Along with this, the company’s exports are also increasing. The company wants to increase its export contribution to 10 percent in the next five years. Along with the product portfolio, the company is also diversifying its revenue base beyond domestic defence.
BEL shares are trading at 34 times FY28 estimated earnings. This is reasonable, as the company’s order book is strong and earnings visibility is improving. The company’s growth is expected to be better in the second half of this financial year. Short cycle projects and improving execution will be involved in this. On December 19, the company’s shares closed at Rs 393, up 2.49 per cent.