BEL share price: Targets upped for maker of Akashteer, a Turkish drone killer; here's why

The order inflows of Bharat Electronics Ltd (BEL) in FY25 fell short of guidance, but its operating profit margin in the March quarter surprised stock analysts, who believe the Rs 71,700 crore backlog -- 40 per cent of which is ascribed to top 12 projects -- provides strong revenue visibility.

Nirmal Bang said it likes the defence stocks amid robust order book, propelled by emergency procurement orders, currently at diverse stages of finalization. It said margins are expected to further increase with higher indigenization of various systems, subsystems as many of these will be manufactured in-house.

"Akashteer Program is a good example of this as 90 per cent of the product was indigenously developed," it said.

The Akashteer system was deployed recently amid India-Pakistan tensions for shooting down of Pakistani drones, including Turkish-origin Kamikaze.

The BEL stock is trading at a 1-year forward PE of 43.9 times, which is above the 5-year average PE of 21 times, thanks to a 23 per cent in the last one month. 

Margin story for BEL is taking shape, said Nuvama Institutional Equities as it retained ‘Buy’ on the stock, calling BEL as one of its sector top picks given sustained OPM beat versus the Street is highly under-appreciated. 

"Higher localization content, favourable product mix and operational efficiencies may drive growth. We are revising FY26E EPS by 4 per cent assigning 45x PE (earlier 40x) to a target of Rs 430 (earlier Rs 385)," it said.
MOFSL said BEL's Q4 results came in ahead of its estimates on Ebitda and PAT level, while the revenue growth of 7 per cent YoY was broadly in line with uts estimate. 

"We increase our estimates on a better-than-expected margin profile and slightly lower other income. We revise our target to Rs 410 on 40x March 2027. We increase our valuation multiple to 40x from 36x earlier on a strong prospect pipeline for BEL. Reiterate BUY rating," it said.

Antique Stock Broking said BEL has achieved its revenue growth guidance of 15 percent and Ebitda margin guidance of 25 per cent in FY25, compelling it to increase FY26 earnings estimates by 8 per cent. 

"We increase our FY27E exit multiple from 40x to 45x. We continue to like BEL given its robust order book position, strong pipeline, swift execution, and consistent delivery of 20 per cent margin & maintain BUY rating with a revised target of Rs 422," it said.

BEL's adjusted PAT stood at about Rs 2,100 crore, up 18 per cent. This was 20 per cent above the consensus estimates. Revenue at Rs 9120 crore was 3 per cent above the Bloomberg consensus estimate, Nomura India noted. Q4 Ebitda was 27 per cent above the consensus estimate, while margin at 30.6 per cent was against the consensus view of 24.7 per cent.

"We reiterate our Buy rating with a target price of Rs 363," Nomura said.