Bharat Electronics: Defensive, but with a lot of stock appeal

With margins expected to improve, better revenue visibility, and good growth in execution, BEL earnings should grow faster in coming quarters

Jitendra Kumar Gupta
April 03, 2023 / 11:04 AM IST
Bharat Electronics: Defensive, but with a lot of stock appeal

Strong order book, improving business environment, and attractive valuations will support stock

PRO Only Highlights
-  Quarterly performance largely backed by improved realisations
-  Medium-term triggers China plus and protectionist measures for tyre industry
-  Valuations not inexpensive; but improved medium-term outlook

Highlights New order inflow signals a pick-up in domestic defence orders Easing execution issues to drive higher revenue growth in the coming quarters Margins impacted, but expected to improve with easing cost pressure Strong existing order book provides strong revenue visibility Stocks valued attractively at 18 times fiscal 2024 estimated earnings Delays in defence orders triggered apprehensions during the last couple of months. As a result, many defence engineering stocks corrected in March. However, the same space now presents a good opportunity, particularly in the...