Bharat Electronics Gets Its Highest Target Price From UBS; Now Preferred Over HAL

UBS expects significant acceleration in the BEL order book of FY25-28. This is predicted to be 17% compared to the previous estimated 8%. This includes an estimated Rs 2.4 crore when the long-term pipeline is converted into orders, particularly Rs 1.4 crore for new orders of Rs 1.4 crore exclusively for FY25-28.

Second, major platforms that BEL has integrated or upgraded, such as the Akash missile system, IACC control system, L70 gun upgrades, Silka weapons system, and multiple radars, are currently supported by combat. With this important verification, the Navratna PSU company is positioned to secure both new and repeat orders in both the domestic and export markets, analysts said.

“With over $28 billion in three years of industry ordering pipeline and BHE’s competitiveness, we believe that growth potential over the next three years is not entirely unprice,” the memo said.

BEL itself predicts that with a 26% EBITDA margin, it will be Rs 55,000 for new orders and the lowest revenue growth rate is 15%.

Capital expenditures are led at Rs 1,000 crore and Rs 1,600 rupees with 90% of the revenue expected from the defense sector. This upward revision in revenue growth suggests improved visibility with a minimum of 15-17% and 20% long-term guidance.

This strengthened outlook is attributed to increased exports and increased domestic demand, supported by proven competitive advantages after the recent battle development, the UBS memo said.

BEL stock rose 0.1% at BSE Rs 383.35 on Thursday, compared to a 0.8% decline in benchmark Sensex.

According to Bloomberg data, 24 of the 28 analysts tracking the company have a “buy” rating on their stock, two recommend “holding” and two suggest “selling.” The average analyst price target of Rs 394 means a potential rise of 3%.