Fundamental Report Bharat Electronics Limited (BEL)

Bharat Electronics Limited (BEL) is a Navratna PSU under the Ministry of Defence, operating as a key beneficiary of India’s defence indigenization drive. The company specializes in manufacturing advanced electronic systems for the Army, Navy, and Air Force, while maintaining a strong presence in high-growth civilian and strategic verticals. Key non-defence segments include smart cities, homeland security, e-governance, space electronics, and satellite integration. Furthermore, BEL is capturing structural tailwinds in green mobility via EV charging stations and solar energy, alongside an expanding footprint in cybersecurity, telecom, medical electronics, and railway/metro solutions.

Recommendation Accumulate

Accumulate Between ₹410 – 380

Target Price ₹ 495

Time Horizon 9 – 12 Months

Q4FY26 and FY26 Results performance:

• Q4FY26 revenue from operations reached ₹10,224.4 Cr, up 42.9% QoQ from ₹7,153.9 Cr and 11.7% YoY from ₹9,149.6 Cr, driving full-year FY26 revenue up 16.2% YoY to ₹27,610.1 Cr from ₹23,768.8 Cr on the back of robust order execution.
• Q4FY26 PAT grew sharply by 40.9% QoQ and 4.7% YoY to ₹2,226.4 Cr from ₹1,579.7 Cr in Q3FY26 and ₹2,127.0 Cr in Q4FY25, leading to a strong 13.9% YoY expansion in full year FY26 PAT to ₹6,062.3 Cr from ₹5,322.7 Cr.
• The company has reported strong EBITDA for Q4FY26 of ₹2981.7 cr increased with the growth rate of 40.2% QoQ from ₹2127.2 cr in Q3FY26 and 5.9% YoY from ₹2816.1 cr in Q4FY25 and for FY26 also reported strong EBITDA and stood at ₹8049.3 cr up 17.8% as compared to ₹6833.8 cr in FY25.
• EBITDA margin decline of 57.2 bps QoQ in Q4FY26 from 29.7% in Q3FY26 to 29.2% in Q4FY26 and also down of 161.6 bps YoY from 30.8% in Q4FY25 but in terms of annual performance it has recorded 40.2 bps upside as compared to 28.8% in FY25 and reached at 29.2%, Q4FY26 margin decline due to input cost increased.
• It has announced an interim dividend of ₹1.95 per equity share and a final dividend of ₹0.55 per equity share for FY26, bringing the total dividend payout for the fiscal year to ₹2.50 per share.

FY27 Guidance & Management Outlook:

• Management has reaffirmed its guidance of more than 15% revenue growth for FY27, supported by a strong order backlog and the execution of major domestic defence programmes.
• BEL is targeting an EBITDA margin of over 28% in FY27, despite anticipated operational investments, evolving product mix, and continued focus on indigenous manufacturing.
• The company expects order inflows exceeding ₹55,000 crore in FY27, driven primarily by large air-defence and strategic defence contracts.
• BEL plans to invest approximately ₹2,200 crore in Research & Development (R&D) during FY27, with a strong focus on next-generation defence technologies and advanced platforms.
• Capital expenditure is projected to exceed ₹1,200 crore in FY27, representing more than 20% growth over the previous year. The investment will be utilized for capacity expansion, new facilities, and infrastructure upgrades.
• Management has maintained its revenue mix guidance at 90% defence and 10% non-defence, subject to minor revisions based on business developments during the year.
• Export revenues currently contribute around 4–5% of total revenue; however, management aims to increase this share to over 10% within the next five years, supported by strategic communication systems, satellite solutions, and customized C4I offerings for international markets.

Profit and Loss Statement:

DESCRIPTION (₹ Cr)	Q4FY26	Q3FY26	Q4FY25	QoQ%	YoY%	FY26	FY25	YoY %
Revenue from Operations	10,224.4	7,153.9	9,149.6	42.9	11.7	27,610.1	23,768.8	16.2
Total Expenditure	7,242.7	5,026.7	6,333.5	44.1	14.4	19,560.8	16,935.0	15.5
EBITDA	2,981.7	2,127.2	2,816.1	40.2	5.9	8,049.3	6,833.8	17.8
EBITDA Margin (%)	29.2	29.7	30.8	-1.9	-5.2	29.2	28.8	1.4
Depreciation	173.0	135.4	137.6	27.7	25.7	555.7	467.4	18.9
EBIT	2,808.8	1,991.8	2,678.5	41.0	4.9	7,493.6	6,366.4	17.7
Other Income	110.2	138.5	194.6	-20.4	-43.4	566.0	742.4	-23.8
Interest	1.6	2.0	5.9	-20.0	-72.9	6.7	9.7	-30.9
Share of (loss)/profit in A&JV	12.2	9.5	6.0	28.4	103.3	38.8	35.5	9.2
EBT	2,929.6	2,137.8	2,873.2	37.0	2.0	8,091.8	7,134.6	13.4
Tax	703.2	558.1	746.2	26.0	-5.8	2,029.5	1,811.9	12.0
PAT	2,226.4	1,579.7	2,127.0	40.9	4.7	6,062.3	5,322.7	13.9
EPS	3.04	2.16	2.91	40.74	4.47	8.29	7.28	13.87

Outlook:

BEL is one of India’s leading defence electronics companies, developing and manufacturing advanced technology systems and equipment for the Army, Navy, and Air Force. While defence remains its core business, the company is also expanding its presence in high-growth segments such as cybersecurity, smart cities, and clean energy solutions.

It has ended Q4FY26 and FY26 on a strong note, Driven by robust order book execution, Q4FY26 revenue from operations grew by 42.9% QoQ, while PAT surged by 40.9% QoQ compared to Q3FY26. On annual front, the company maintained strong momentum, with top-line growing by 16.2% and the bottom line expanding by 13.9% over FY25.

BEL secured strong order inflows of ₹30,045 Cr in FY26, taking its total order book to ₹73,882 Cr. Management is confident of maintaining this momentum into FY27, targeting order inflows exceeding ₹55,000 Cr. Additionally, the company is actively exploring diversification opportunities within the high-growth data center segment.

For FY27, management has provided a strong revenue growth guidance of 15% alongside stable EBITDA margins of 28%. To support this growth, a strategic capital expenditure plan has been laid out for FY27, allocating ~₹2,200 Cr toward R&D and ~₹1,200 Cr for capacity expansion and infrastructure.

Valuation and Investment Recommendation: BEL reported an EPS of ₹8.29 for FY26. At the CMP of ₹411, the stock trades at a P/E multiple of 49.57x. Given the company’s strong revenue visibility, robust order book, and clear growth catalysts, we believe that the valuation is fair at the current level. Thus, we recommend investors to ACCUMULATE BEL between the ₹410 – 380 range for a target price of ₹495, with a time horizon of the next 9–12 months.

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