Non-defence business likely to keep Bharat Electronics buzzing

Order book, pipeline offer medium-term revenue visibility

The stock of India’s largest defence electronics firm, Bharat Electronics or BEL, has risen 20 per cent since its August lows on expectations that a strong order book, ongoing business diversification, and the government’s localisation efforts would drive medium-term revenue growth.

After a recent analysts meet, brokerages such as CLSA revised their financial year 2022-23 (FY23)-24 earnings estimates by 2-6 per cent. The management is optimistic about a growth recovery in the rest of FY22 and has guided for mid-teen growth over the next three to four years.

The other key trigger for the stock is business diversification, which would reduce risk