Bharat Electronics’ shares surged over 2% to reach a 52-week high in early trading on Thursday following UBS’s upward revision of the stock’s target price.
BEL’s share price rose by 2.30% to ₹215.35 on the BSE after UBS reiterated its ‘Buy’ rating on Bharat Electronics shares and raised the target price to ₹257 per share from ₹205. Additionally, UBS assigned a 35x PE to March FY26E earnings, compared to 30x earlier, citing improved earnings and strong momentum in new orders.
The defense PSU, Bharat Electronics, has witnessed a significant increase in new orders in FY24, surpassing consensus estimates for the full financial year 2023-2024. The company has already reported new orders exceeding ₹30,000 crore, indicating over 50% growth compared to FY23, with several large-ticket orders being awarded.
Following upward revisions to BEL’s FY24 new order inflow estimates, UBS further raised its estimates by 24% to ₹31,000 crore, considering the recent surge in orders and faster pipeline closure.
UBS believes that the substantial increase in new orders reflects the expedited defense pipeline, which could sustain Bharat Electronics’ consistent order book growth, justifying higher valuations similar to industrial peers.
According to BEL’s management, the Ministry of Defense has fast-tracked many large projects due in FY25, which were awarded in FY24. The management anticipates total orders of ₹50,000 crore in FY25 and FY26, with the MRSAM project yet to be factored in due to its early stage.
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