Bharat Electronics Limited (BEL) shares experienced a notable rise following an “outperform” rating from Macquarie, which set a target price of ₹350. This projection suggests a potential upside of approximately 20% from the stock’s closing price of ₹292.9 on the previous day. Analysts are closely monitoring BEL’s performance as it prepares to join the Nifty 50 index starting September 30, 2024.
Macquarie’s report highlights that BEL is on track to meet its financial year 2025 (FY25) guidance, with expectations for order inflows to reach around ₹25,000 crore. Despite current order inflows lagging behind expectations, analysts remain optimistic. They believe the company’s robust order backlog will support growth trends moving forward. The backlog is a critical factor, as it reflects BEL’s ongoing projects and future revenue potential.
Main Points
- Target Price and Rating: Macquarie has maintained its “outperform” rating on BEL with a target price of ₹350. This indicates a strong belief in the stock’s growth potential.
- Order Inflows: The brokerage noted that while order inflows have not met expectations in the first half of FY25, this is not a cause for concern. The total order inflow for the financial year currently stands at ₹7,075 crore as of mid-September.
- Pipeline Orders: A significant focus for analysts is on upcoming orders, particularly in the Quick Reaction Surface to Air Missile (QR-SAM) segment. This segment is expected to contribute between ₹25,000 crore and ₹30,000 crore in future orders.
- Supply Chain Monitoring: Macquarie emphasized the importance of monitoring supply chain dynamics and margin trends in upcoming earnings calls. These factors will be crucial for assessing BEL’s operational efficiency and profitability.
- Market Performance: Shares of BEL have risen nearly 60% in 2024 despite recent corrections from their peak value of ₹340. The stock ended the previous trading session up by 2.3%.
Out of 26 analysts covering BEL, 18 maintain a “buy” rating, three suggest holding the stock, and five recommend selling it. This consensus reflects strong confidence in BEL’s market position and growth trajectory.
BEL has guided for a revenue growth of approximately 15% year-on-year for FY25. Its Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) margins are projected to range between 23% and 25%. These figures indicate solid financial health and operational efficiency.
The broader market context also plays a role in BEL’s performance. As the company prepares to enter the Nifty 50 index, investor interest is likely to increase. The Nifty 50 index is a benchmark stock market index that includes India’s top 50 companies based on market capitalization.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
