Bharat Electronics (BEL), the state-run defence electronics major, saw its stock decline by 3% in the early trade today to an intraday low of Rs 378 even despite reporting a 25% year-on-year jump in net profit for the first quarter of FY26.
The company posted a standalone profit of Rs 969 crore for the June quarter, compared to Rs 776 crore a year ago, while revenue from operations rose 5% YoY to Rs 4,417 crore. Despite the earnings beat on key parameters like EBITDA and gross margin, brokerages remain cautious-
Nuvama: ‘Neutral’ – Stock may be priced to perfection
On the other hand, Nuvama Institutional Equities has downgraded BEL to a ‘Neutral’ rating, setting a target price of Rs 400. Although the brokerage noted the strong margins and profitability, it also pointed out several concerns regarding growth sustainability and valuation.
According to the brokerage report, BEL’s revenue missed both its and the street’s estimates by 7-9%. “Core performance was below expectations despite healthy margin gains,” Nuvama stated.
The firm also trimmed its sales projections for FY26 and FY27, citing execution delays. It expects BEL’s PAT to grow at a CAGR of 13% between FY25-FY28, significantly slower than the 31% CAGR seen in the previous three years. “The 51% rally in the stock over the past six months has priced it to perfection,” the report added, while maintaining a preference for Hindustan Aeronautics.
Motilal Oswal: ‘Buy’, strong line on margin strength
The brokerage firm Motilal Oswal has maintained a Buy rating on the stock. According to the brokerage house, the company’s performance in Q1FY26 exceeded expectations, especially on the EBITDA and PAT front.
BEL’s EBITDA grew 32% YoY to Rs 1,240 crore, and margins expanded significantly to 28.1%, which was far above the 22.3% estimate. “Strong margin performance resulted in a 15%/16% beat to our PBT/PAT estimates,” the brokerage noted.
The company also reported a healthy order inflow of Rs 7,630 crore during the quarter, taking the total order book to nearly Rs 75,000 crore. A final dividend of Rs 0.90 per share for FY25 was also recommended by the board, adding to the earlier interim dividend of Rs 1.5 per share.
BEL stock performance
BEL shares have had a mixed run in recent months. Despite the recent dip, the stock is still up 31% so far in 2025. However, it has declined 8% over the past month and 3% in the last week. On a longer-term view, the stock has delivered 45% returns in six months and 20% in the last one year.
As of now, BEL has a market capitalisation of around Rs 2.83 lakh crore. The stock’s 52-week high is Rs 436, and the low stands at Rs 240.25.