Motilal Oswal is bullish on Bharat Electronics recommended buy rating on the stock with a target price of Rs 108 in its research report dated June 30, 2020.
Motilal Oswal 's research report on Bharat Electronics
Bharat Electronics (BHE)’s 4QFY20 earnings came in higher than estimated, led by a strong uptick in margins. While revenue was in-line, the major surprise was the EBITDA margin coming in at 25.5% v/s our estimate of 20.5%. Thus, net profit was 26% above our estimate. Adjusted for EVM/VVPAT orders in the base year, execution was strong at 56%/37% for 4QFY20/FY20. The EBITDA margin tends to be volatile on a quarterly basis as it depends on the sales mix between deliverables.
Outlook
The current order book is strong at INR520b, with an OB/rev ratio of 4.1x. We tweak our FY21/FY22E EPS by -6%/+2%. Maintain Buy, with revised TP of INR108.
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