Brokerage firm Geojit BNP Paribas Financial Services is bullish on Bharat Electronics (BEL) shares with a target price of Rs 1,355. According to Geojit, BEL’s core capabilities are in radar and weapons systems, defence communication and electronic warfare. The company is emerging as a substantial beneficiary of the “Make in India” reform in defence. The current order book is robust at Rs 32,333 crore, 551 per cent up from last year. Given higher indigenous procurement by Government of India, BEL’s EBITDA margins profile and earnings outlook has improved significantly. On a conservative basis the brokerage house expects 15 per cent CAGR in earnings over FY16-FY20E. More potential in earnings growth will emerge as per the progress of the modernisation and indigenisation programme.
Bharat Electronics is a Navaratna enterprise having 37 per cent market share in Indian Defence Electronics. In the past one year, shares of the company have risen 13.25 per cent to Rs 1247.25 till September 21, whereas BSE Sensex gained 8.84 per cent during the same period.
On September 22, shares of the company were trading 0.26 per cent up at Rs 1250.45 (around 1.40 pm)
For the quarter ended June 30, 2016, the company reported a net profit of Rs 36.09 crore, down 52.94 per cent, against Rs 76.69 crore in the same quarter a year ago. Net sales of the company slid 20.93 per cent to Rs 846.73 crore for the quarter under review against Rs 1070.89 crore in the same quarter a year ago.