5 BEL share price target reports by brokerages below. See what is analyst's view on BEL share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Execution impacted...strong order inflow Bharat Electronics Ltd (BEL) is a Navaratna enterprise having 37% market share in Indian Defence Electronics. BEL’s core capabilities are in radar & weapons systems, defence communication & electronic warfare. Q1FY21 Revenue & PAT declined by 21% & 74% YoY on account of disruptions due to lockdown. EBITDA declined by 58% YoY and margin fell by 780bps YoY to 8.8% due to weak execution. Order inflow grew by 72% led by Ventilators, smart city projects and Advance Torpedo defence systems. The current order back log is Rs53,752cr (4.3x FY20 sales) provides strong earning visibility for next 3 years. We continue to remain constructive on BEL in long term given its niche technological & execution capabilities and government focus on indigenisation. Given strong order book visibility and stable order inflow, we maintain “Buy” rating on stock. We value BEL at 13x on FY22E with a revised target price of Rs112.
Bharat Electronics’ performance for FY20 was positive with the topline growing 6.6% YoY led by a strong fourth quarter. The ongoing Coronavirus Pandemic will impact the company’s business, with disruptions in supply chain causing longer procurement periods. However, looking at the healthy order book, we expect the negative impact to be lower than what other industries are facing. We have factored in a 19% reduction in sales for FY21E, followed by a recovery in FY22E led by stronger execution and improvement in working capital cycle post Covid-19. We maintain our Target Price of Rs.139 with a BUY rating on BEL over a 18-24 months horizon.
Bharat Electronics (BEL) reported a strong quarter where revenue grew by 49% YoY leading to high profitability. Perhaps Covid-19 pandemic deferred many orders thereby leading to decline in order Inflows by 59% YoY to Rs28.7bn, during the quarter. Order book stood healthy at Rs520bn providing revenue visibility going ahead. Key projects executed in FY20 include Part supply of Long Range Surface to Air Missile System, Smart City and Homeland Security Business, Integrated Air Command and Control System, Radar Systems, Thermal Imaging Cameras. Management highlighted that execution could have been higher, if not for COVID-19 outbreak and the economic slowdown. Further, it indicated that execution of some of its major projects could not be completed due to force majeure. Company continues its focus to increase contribution from non-defence segment going ahead. We believe near term challenges would continue on the execution and order inflow front due to the pandemic. Given the strong FY20 numbers we have increased our revenue/PAT estimate by 9%/6% for FY21E with largely maintaining our estimate for FY22E. We expect BEL to report revenue/PAT of Rs125bn/Rs131bn and Rs15bn/17bn for FY21E/22E respectively. The stock is currently trading at 14.9x/12.8x FY21E/22E. We maintain Hold rating with revised TP of Rs90.
Bharat Electronics Ltd.’s (BEL’s) 3QFY20 performance was significantly below our and consensus expectations. Revenue was down 16.4% YoY largely due to delay in execution of major projects due to various issues such as obsolescence in input material, modification in scope of work, non- readiness of sites for carrying out installation activity, delay in getting customer clearances/approvals etc. Thus, lower sales realizations and input cost pressures led to margin miss. Adj. PAT came in at Rs2.2bn (PLe Rs3.9bn), down 57.6% YoY due to lower execution and miss on margins. Order inflows during the quarter was down 14%YoY at Rs~12.6bn (9MFY20 ~Rs103.3bn, down 37% YoY). Management has reduced its revenue guidance from 12-15% to 10-12% for FY20E. Further, it expects profitability to improve in Q4FY20 due to better sales realization as large orders are yet to be delivered. However, we have reduced our revenue/PAT estimate for FY20E/21E by 3%/4% and 9%/10% respectively given weak performance in 9MFY20.At CMP, the stock is trading at 14.6x/12.9x FY20E/21E. We have Hold rating on the stock with TP of Rs108.
Valuation: Maintain Buy with PT of Rs 140: We expect revenue and earnings to clock CAGRs of 14.4% and 7.7% (owing to a high base effect led by execution of EVM order in FY2019), respectively during FY2019- 2021E. At the CMP, the stock is trading at 13.6x and 12.5x FY2020E and FY2021E earnings. Given a strong order book and expectation of healthy order intake pipeline, we maintain our Buy rating on the stock with a price target (PT) of Rs. 140.
We expect revenue/EBTDA/PAT growth of 14%/6%/3% over FY19-22. Muted PAT growth is attributable to the higher base of FY19 with an EBITDA margin of 23.7%. Our assumptions adequately factor in the margin concerns. Given the company’s current order backlog position, execution timelines and capabilities, we maintain our Buy rating with a TP of INR127 (16x Mar’21E EPS, in line with its 10-year average P/E multiple of 16.4x).
Maintain Buy with PT of Rs. 140: We expect revenue and earnings to report CAGRs of 14.4% and 7.7%, respectively, during FY2019-FY2021E. At the CMP, the stock is trading at 13.2x and 12.1x its FY2020E and FY2021E earnings, respectively. Any weakness from the government disinvestment programme can be considered as a good investment opportunity in the stock. Given a strong order book, expectation of a healthy order intake pipeline and reasonable valuation, we maintain our Buy rating on the stock with a PT of Rs. 140.
This is likely to grow to 25% of revenues over the next 4-5 years. Working capital under stress due to customer’s budget constraint, but going ahead improvement in receivables is expected due to advances from recently won Akash Missile order. We have lowered EBITDA margin assumption and hence cut earnings by 7%/4% for FY20/21E respectively. The stock is currently trading at 15.2x/13.7x FY20/21E. We maintain Accumulate rating on stock with TP of Rs120.
We continue to derive comfort from a healthy order book backlog of | 51,715 crore providing future revenue visibility. Going ahead, BEL seems likely to derive higher revenues from non-defence segment like homeland security, cyber security and smart cities. The order book from this segment is roughly at ~| 1500 crore. These newer areas have the potential to contribute ~20% to the topline albeit with lower margins over the next three to five years. Overall, we remain positive on the company and expect it to report topline, EBITDA and PAT CAGR of 14.7%, 5.4%, 1.8%, respectively, over FY19-21E. We value the company at 16x P/E on FY21E earnings to arrive at a target price of Rs 135 per share. We maintain our BUY rating on the stock.
Given the current order backlog position, execution timelines and capabilities of the company, we maintain a Buy rating on the stock with TP of INR130 (16x Mar’21E EPS, in line with its 10-year average P/E multiple of 16.8x).
Maintain Buy with PT of Rs. 140: We expect revenue and earnings to clock CAGRs of 14.4% and 7.7%, respectively during FY2019-2021E. At CMP, the stock is trading at 11.9x and 11.0x FY2020E and FY2021E earnings. Given a strong order book and expectation of a healthy order intake pipeline, we maintain our Buy rating on the stock with a price target (PT) of Rs. 140.
We have broadly maintained the numbers as we expect execution to pick up in subsequent quarters of the current financial year. The stock is currently trading at 12.7x/11.8x FY20/21E. We maintain Accumulate on the stock with TP of Rs120.
Currently, BEL is trading at 1 Year FWD P/E of 14x. Strong order backlog of Rs52,000cr (4.4x FY19 sales) provides clear visibility for next 3 years. Given BEL’s technological & execution capabilities, higher defence spending and GoI focus on indigenous procurement, we remain positive on BEL. Given upgrade in earnings, we value BEL at 14x on FY21E and maintain Buy rating on the stock with a target price of Rs126.
With a healthy order backlog of | 51,798 crore, we expect execution momentum to continue in FY20E-21E. Going ahead, BEL is likely to derive higher revenues from non-defence segment like homeland security, cyber security and smart cities. Order book from this segment is roughly at ~Rs 1500 crore. These newer areas have potential to contribute ~20% to topline albeit with lower margins over the next three to five years. Accordingly, we remain positive on the company and expect it to report revenue, EBITDA and PAT CAGR of 15.2%, 6.6%, 2.9%, respectively, in FY20E-21E. We value the company at 16x P/E on FY21E earnings to arrive at a target price of Rs 135 per share. We maintain our BUY recommendation on the stock.
Major orders expected during FY20 are Akash Missile System (7 Sqdn) (Rs50 bn), Coastal Surveillance System (Rs15 bn) and Samyukta Upgrade (Rs5 bn). Revenue is expected to grow in the range of 13-15% which will include execution of LR- SAM project (deadline 4QFY20) which has relatively higher imported content. Hence, expected EBITDA margin to be in the range of 20-21%. The stock has rallied ~38% over the last three months and currently trading at 14.6x/13.6x FY20/21E. We recommend Accumulate on the stock with TP of Rs120.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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