ICICI Securities upgraded Bharat Electronics to a buy rating with a target price of Rs 446. The company reported strong Q2FY27 results, with revenue and profit beating estimates. Growth in the first half of the year suggests the firm will meet its targets as it eyes major new defense orders.
Buy
ICICI Securities's research report on Bharat Electronics
Bharat Electronics (BEL)’s Q2FY27 revenue/EBITDA/PAT stood at INR 73.3bn/20.4bn/15.3bn coming in at ~10–11% ahead of our/consensus estimates. H1FY27 revenue grew 26% vs. its guidance of 15%+ FY27, indicating a strong possibility of BEL meeting its target. OB additions of INR 550bn largely depend upon QRSAM orders (INR 300bn) – likely to arrive by Dec’26. We expect the company to marginally surpass its guidance given a sizeable TAM. If BEL wins AMCA, the company would graduate – from a component supplier – into the big-league of large integrators. Given consecutive quarters of outperformance, we upgrade BEL to BUY; TP of INR 446 (based on 40x FY28E EPS).
Outlook
We revise TP to INR 446 (earlier INR 460), based on a 40x FY28E EPS and upgrade the stock to BUY (from Add).