Bharat Electronics Ltd., incorporated in the year 1954, is a Large Cap company (having a market cap of Rs 30725.44 Crore) operating in Defence sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 2343.90 Crore, down -27.27 % from last quarter Total Income of Rs 3222.70 Crore and up 1.40 % from last year same quarter Total Income of Rs 2311.47 Crore. Company reported net profit after tax of Rs 270.12 Crore in latest quarter.
Investment Rationale
The brokerage forecasts a revenue/EBITDA/PAT CAGR of 14%/14%/16% over FY21–23E. The brokerage has built in a sufficient margin cushion as we assume an EBITDA margin of 19.2%/19.1% for FY22E/FY23E (v/s 21.1% in FY20). At CMP, the stock trades at FY22E/FY23E P/E of just 15x/14x – despite having RoE/RoCE of ~17%/18%, dividend yield of ~3%, and FCF yield of 3.5–6%. It maintains Buy, with unchanged TP of INR150 (on 16x FY23E EPS).
Promoter/FII Holdings
Promoters held 51.1 per cent stake in the company as of Dec 30, 2020, while FIIs held 10.3 per cent, DIIs 31.3 per cent and public and other 7.3 per cent.
