*Bharat Electronics Ltd Q4FY21 result Update: Beat on all counts. Onwards and upwards from hereon. Maintain BUY*
• BEL’s recurring PAT (Rs 13.5bn, 31% yoy), Revenues was (Rs 69bn, 19%yoy) & EBITDA margins at 28.5% expanded 300bps yoy versus estimates of 24%.
• 4QFY21 order inflows of Rs 54bn a strong growth of 88% yoy. Orderbook Rs 534bn, 3% yoy, 3.8x B-t-B continues to provide revenue visibility.
• Management expects revenues to grow 15%-17% in FY22, EBITDA margins in the range of 20%-22% and order inflows of Rs 150-170bn.
• Management will continue to focus on localisation of technologies in radars, communication systems, civilian products and this should support margins in the long term.
• It plans to invest in building capabilities in Electronic Warfare systems, Missile electronics, Ammunition and Electro optics over the next three years.
• We maintain our BUY rating with a revised target price of Rs 215 (Rs 175 earlier) based on 20x PE FY23E (18x earlier).