Bharat,
According to an old stock, Bharat Electronics Limited (BEL) is trading at a significant discount to other large-cap industrial companies. There are concerns regarding the sustainability of a +20 percent operating margin under the new pricing policy, which has an impact on the PBT margin. Broking.
“BEL has been able to successfully address these concerns with a strong order book, robust order pipeline, and consistent delivery of +20% margins. According to the note, “We continue to maintain a Buy rating on the stock with a target price of 135 per share.”
“BEL has exceeded its order inflow guidance of INR 200 billion for FY23 thanks to the recent uptick in defense orders approved by the MoD. Given the weak order inflow of INR 38 billion in 9MFY23, this is anticipated to compensate for the missing order inflow. It also acknowledges investors’ concerns regarding guidance. Expensive. BEL’s order book has grown by 670 billion thanks to order finalization. “BEL is well on track to register a CAGR of 20% over FY22-25E with a strong order book and an equally strong pipeline expected to materialize in the near to medium term,” Antique Stock Broking stated.
In the past week, Bharat Electronics (BEL) announced 150 billion orders. The stock is down 15%+ from its 1-year top and failed to meet expectations peer Hindustan Flying (HAL) year-to-date or YTD, as per worldwide business Jefferies.
Since the most recent order brings it closer to the FY23E 200 billion guidance, we believe this is a good starting point. This needs to include orders that are not announced. “Double-digit execution growth, defense indigenization, and revenue from non-defense initiatives should drive upside momentum in our view,” Jefferies added, while maintaining a buy rating on BEL shares and a target price of Rs. 125 each.
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