Defence major Bharat Electronics is in focus. The brokerage firm Nuvama has reiterated its ‘Buy’ call on the stock and assigned a target price of Rs 485. The revised target implies a potential upside of nearly 17% from current levels. However, the brokerage trimmed its earlier target price of Rs 525 to align with execution timelines and management guidance.
According to the brokerage report, Bharat Electronics continues to remain one of the strongest players in India’s defence manufacturing space, supported by healthy margins, a massive order backlog and visibility on future defence contracts. The report highlighted that the company delivered a strong operational performance in the March quarter and beat Street estimates at the operating level despite pressure from rising expenses.
Nuvama stated, “Retain ‘Buy’ as we envisage 14% EPS CAGR over FY26–28, backed by strong visibility and elevated margins.”
The Defence fortress: Key metrics
| Particulars | Details |
| Nuvama Rating | Buy |
| Target Price | Rs 485 |
| Implied Upside | Around 17% |
| FY26 Order Inflow | Rs 30,000 crore |
| Order Backlog | Rs 73,900 crore |
| Q4FY26 EBITDA Margin | 29.1% |
| FY26 EBITDA Margin | 29.2% |
| FY26 Revenue Growth | 16.2% YoY |
| FY26 Adjusted PAT | Rs 6,050 crore |
According to the Nuvama report, Bharat Electronics posted one of its strongest annual operating performances in recent years, helped by higher localisation, cost efficiencies and improving execution across defence projects.
BEL Q4 Performance: Strong revenue growth despite margin pressure
Bharat Electronics reported revenue of Rs 10,170 crore in Q4FY26, registering an 11.6% year-on-year increase. For the full financial year, revenue rose 16.2% year-on-year to Rs 27,480 crore.
The brokerage noted that gross margins continued to improve. Gross margin for FY26 stood at 49.1%, compared to 48.5% in the previous year. According to the report, this improvement was mainly driven by a better product mix and increasing indigenisation.
However, EBITDA margin declined slightly during the quarter. EBITDA margin came in at 29.1% in Q4FY26, down nearly 150 basis points year-on-year because of a sharp rise in other operating expenses. Even then, the performance remained better than market expectations.
The report stated, “EBITDA margin declined 150bp YoY to 29.1% in Q4FY26, though ahead of street expectation of 27.6%.”
The brokerage further noted that adjusted Profit After Tax (PAT) grew 14.4% year-on-year to Rs 6,050 crore during FY26 despite lower other income during the quarter.
Inside BEL’s Rs 73,900 crore defence order book
One of the biggest reasons behind the bullish outlook is Bharat Electronics’ strong order backlog.
Nuvama in its report noted that the company received fresh orders worth Rs 11,000 crore during Q4FY26, taking the total FY26 order inflow to Rs 30,000 crore. This has pushed the total order backlog to Rs 73,900 crore, which is nearly 2.7 times FY26 sales.
Several high-value defence projects are currently part of this backlog. These include electronic fuses worth Rs 4,300 crore, Long Range Surface-to-Air Missile (LRSAM) systems worth Rs 3,500 crore, Tejas aircraft Line Replaceable Units (LRUs) worth Rs 3,200 crore and BMP-2 Infantry Combat Vehicle upgrades worth Rs 2,800 crore.
The order book also includes Ashwini radar systems worth Rs 2,460 crore and Electronic Warfare suites for Mi-17 V5 helicopters worth Rs 2,200 crore.
As per Nuvama report, these projects provide strong medium-term execution visibility for the company.
The next big trigger: QRSAM and AMCA orders
Looking ahead, the brokerage believes the next major trigger for the stock could come from large defence contracts expected over the next 12-18 months.
The biggest among them is the Quick Reaction Surface-to-Air Missile (QRSAM) programme. The brokerage added that the Rs 30,000 crore QRSAM order is expected between June-July 2026.
The brokerage stated, “QRSAM ordering is now expected by Jun’26 or at the latest by Jul’26.”
Apart from this, Bharat Electronics is also expected to benefit from upcoming defence programmes such as the Advanced Medium Combat Aircraft (AMCA), Project Kusha, Next Generation Corvettes (NGC), P75I submarine systems and Shakti Phase IV defence networks.
The report further said, “Timely awarding of large ticket-size orders from the INR1tn pipeline… remain critical.”
BEL Valuation: What investors need to watch
At current levels, Bharat Electronics is trading at around 45 times FY27 estimated earnings and 38 times FY28 estimated earnings.
The brokerage house report noted that the valuation premium continues to be supported by strong earnings visibility, healthy operating margins and a large defence opportunity pipeline.
Nuvama stated, “Valuing stock at 45x FY28E EPS yields a target price of Rs 485.”
The brokerage also highlighted that management has guided for over 15% revenue growth and EBITDA margin above 28% for FY27, while capital expenditure is expected to increase by nearly 20%.
For investors, the key factors to track going forward will be execution speed, timing of large defence order awards and margin sustainability as Bharat Electronics moves deeper into advanced defence electronics manufacturing.
Disclaimer: Investment views, ratings, and target prices mentioned in this report are sourced from the brokerage firm Nuvama and do not reflect the official stance or endorsements of this publication. Equity investments are subject to market risks, and previous performance or brokerage estimates are not a guarantee of future returns. Readers are advised to consult a SEBI-registered financial advisor before making any investment decisions.
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