Bharat Electronics Ltd., incorporated in the year 1954, is a Large Cap company (having a market cap of Rs 50400.93 Crore) operating in Defence sector.
Bharat Electronics Ltd. key Products/Revenue Segments include Electronic Components & Equipments, Sale of services, Other Operating Revenue, Rent and Scrap for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 3740.43 Crore, up 120.81 % from last quarter Total Income of Rs 1693.98 Crore and up 16.07 % from last year same quarter Total Income of Rs 3222.70 Crore. Company reported net profit after tax of Rs 610.04 Crore in latest quarter.
Investment Rationale
BEL reported a strong Q2 FY22 numbers on all key metrics. It is leveraging its past R&D investments and change in defense ministry’s stance on import ban and increasing its levels of indigenization. Its impetus on outsourcing low-value-addition functions is further helping in improving and de-risking its cost structure. BEL is expected to utilize the above cost savings to increase its spending on R&D and capex and enter new markets. BEL has been able to negate the overhang of lower margin in nomination-based contracts by reducing quantum of imports. It is also focusing on up-skilling its workforce and adding to employee count in new areas with good growth prospects. Its strong order book, well-defined and distinct order pipeline gives us a very strong visibility over mid to long term. BEL’s new initiative in non-defense streams is expected to gain momentum soon and contribute meaningfully to the topline. On the back of strong topline and margin performance, huge cash surplus raised in FY 21, comfortable WC cycle, rich return ratios and 50% dividend payout ratio, the brokerage has raised target price on higher estimates to ₹246 (20x FY 23E earning.
Promoter/FII Holdings
Promoters held 51.14 per cent stake in the company as of 30-Sep-2021, while FIIs owned 15.73 per cent, DIIs 28.33 per cent.
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