Hold Bharat Electronics; target of Rs 99: Prabhudas Lilladher

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Prabhudas Lilladher's research report on Bharat Electronics

Bharat Electronics (BEL) reported a strong quarter higher than our and street estimates. Revenues came in at Rs16.9bn led by strong execution in Ventilators, part supply of Long Range Surface to Air Missile System, Spares & Services, Smart City, Intelligence gathering system, Thermal Imaging Cameras and Radars repairs. Gross margins expanded by 100bps led by better product mix and lower input expenses. Order Inflows grew by 72% YoY mainly comprising of ventilators(~Rs13bn), advance torpedo defense systems (~Rs8bn) and smart city projects (~Rs4bn). Currently order book stands at Rs538bn (up 4% YoY), of which ~90% belongs to defense related products while balance 10% is contributed by homeland and smart city. Given strong 1Q performance, management maintained its 8-10% revenue guidance for FY21E with stable gross margins in 43-45% range. We see a short term impact on execution due to pandemic and a medium term impact on OI’s due to deferment of few orders.

Outlook

Thus, we expect flattish revenue growth with revenue and PAT at Rs130bn/Rs142bn and Rs15bn/18.5bn for FY21E/22E respectively. The stock is currently trading at 16.2x/13.9x FY21E/ 22E. We maintain Hold rating with a revised TP of Rs99.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More