Bharat Electronics Limited or BEL, a Navaratna defense public sector undertaking, announced on Monday, October 7, that it has secured additional contracts exceeding ₹500 crore since its previous update on September 11, 2024. The new contracts encompass a range of products and services, including Electromagnetic Interference (EMI) shelters, annual maintenance contracts (AMC) for integrated air command and control system nodes, upgrades and spare parts for gun systems, radar components, and communication systems.
With these new acquisitions, BEL’s total order backlog for the ongoing financial year has reached an impressive ₹7,689 crore. In a formal statement to the stock exchange, the company detailed the major contracts received, highlighting the significance of these new orders in bolstering its operational capabilities.
“The substantial orders acquired encompass EMI shelters, AMCs for Integrated Air Command and Control system nodes, upgrades and spare parts for gun systems, as well as spares for radar and communication systems,” BEL stated. This substantial influx of orders indicates the company’s continued growth trajectory and reinforces its strategic positioning within the defense sector.
Since its inclusion in the Nifty50 index on September 30, BEL has encountered persistent declines, experiencing a streak of losses without any days of gains. Despite these fluctuations, the company has expressed optimism regarding its projected order inflow for FY25, with an ambitious target of ₹25,000 crore. This projection underscores BEL’s confidence in securing additional contracts in the coming months.
In its latest analysis, Macquarie has reiterated its ‘outperform’ rating for BEL, setting a price target of ₹350 for the stock. This target suggests a potential upside of 20% from its closing levels on Tuesday, October 1. However, it is noteworthy that the stock currently sits 15% below its recent peak of ₹340, prompting analysts to keep a close watch on market trends.
Furthermore, BEL is optimistic about achieving an order inflow of around ₹25,000 crore for the financial year. According to its last update on September 11, when the company reported securing orders worth ₹1,155 crore, its total order inflow for FY25 stood at ₹7,075 crore, illustrating a strong performance thus far.
Macquarie’s report emphasizes the importance of monitoring the volume of orders that BEL manages to secure during the latter half of the current financial year. Although the current order inflows have been lagging, the brokerage notes that this should not raise alarm bells.
Instead, BEL’s substantial order backlog will continue to support its growth momentum, albeit with the supply chain emerging as a critical factor to observe for the company’s future performance. The brokerage is particularly interested in gaining clarity on three crucial aspects from BEL following its September quarter results, as these could serve as key catalysts to propel the stock higher in the near future.
Bharat Electronics Limited (BEL) is a leading Indian public sector enterprise established in 1954, specializing in defense electronics and high-tech communication systems. With a strong focus on innovation and R&D, BEL develops advanced products for the defense, aerospace, and civilian sectors. The company is committed to enhancing national security while contributing to India’s self-reliance in defense manufacturing.
