Bharat Electronics (BEL) Shares Surge 9% to All-Time High Following Impressive Q4 Results

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• Shares of Bharat Electronics (BEL) surged 9.35% in early trading today, reaching a new high of ₹283 per share, following the release of the company’s Q4 and FY24 financial results on Monday, which surpassed analyst expectations.
• The Navratna Defense PSU reported a 30% increase in consolidated net profit, totaling ₹1,797 crore compared to ₹1,382 crore in the same period last year. Revenue from operations for the quarter grew by 32.18% year-on-year to ₹8,564 crore.
• “BEL’s performance this quarter reflects our strong commitment to innovation and excellence in the defense sector,” stated the CEO during the earnings call.

With impressive Q4 results and strategic expansions, Bharat Electronics sets a new benchmark in the defense industry, promising robust growth and investment potential.

Key beneficiary of defence indigenization

BEL has a market share of 12% in the overall defence market and a market share of nearly 60% in the highly specialized defence electronics segment. Domestic brokerage firm Motilal Oswal expects BEL to remain a key beneficiary of defence indigenisation potential worth ₹5 trillion over the next five years with its presence across defence platforms and products ranging from radars, simulators, EW systems, electronic fuses, thermal imaging, integrated air command and control systems, border surveillance systems, counter-drone systems, etc.

Upgraded to ‘Buy’

Following the company’s Q4 and FY24 performance, Motilal Oswal raised its earnings estimates by 21% and 32% to account for the government’s ongoing support for the defence sector, the company’s increasing market share, better-than-expected gross margins, and improved working capital management. The brokerage valued BEL stock at 35x P/E on two-year forward earnings and revised its target price to ₹310 per share, upgrading the rating from ‘Neutral’ to ‘Buy’.

Holds a lucrative ordering opportunity

Earlier, Japanese brokerage firm Nomura initiated coverage on Bharat Electronics Limited (BEL) with a ‘buy’ rating and set a target price of ₹300 per share. Nomura highlighted that India’s defence sector presents a lucrative ordering opportunity of $138 billion over FY24–32 due to escalating demand for defence equipment, technologies, and services. This scenario offers significant prospects for companies involved in defence production and technology development.

Conclusion

Bharat Electronics continues to excel in the defense sector, backed by strong financial performance and strategic positioning in the market. With upgraded ratings and positive forecasts, BEL remains a top pick for investors looking at robust returns and growth in the defence industry.

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