BEL stock rises 5% as order inflow optimism keeps MOFSL upbeat post Q2

BEL share price target: Shares of state-owned Bharat Electronics Limited (BEL) were in an uptrend during Wednesday's trade, supported by broad-based buying in defence pack and positive commentary from Motilal Oswal Financial Services following the company's September quarter results (Q2FY27).

 

The stock opened marginally higher at ₹381.90 on the National Stock Exchange (NSE) and extended its gains for the third consecutive trading session. It rose nearly 5 per cent to hit an intraday high of ₹396.95.

 

With Wednesday's gains, BEL shares have advanced nearly 7 per cent over the past three trading sessions.

 

As of 1:20 PM, BEL was the top gainer on both the benchmark indices, the Sensex and the Nifty 50. The defence stock was trading 4.4 per cent higher at ₹396.70, with around 16 million shares changing hands on the NSE, according to exchange data.

 

 

In comparison, the Nifty 50 index traded 89 points, or 0.38 per cent higher at 23,900.

 

BEL share price target 

 

Following the earnings, domestic brokerage firm Motilal Oswal Financial Services has reiterated its 'Buy' rating on BEL stock and revised its target price to ₹540 from the earlier target of ₹530. Check - TOP GAINERS NSE | TOP LOSERS NSE

 

BEL Q2 results 

 

BEL posted a strong set of results in Q2, beating revenue, Ebitda and PAT

estimates, said MOFSL. The company reported a 26 per cent Y-o-Y rise in its revenue to Rs 73 billion for the September quarter.

 

Absolute Ebitda increased by 20 per cent Y-o-Y to Rs 20.4 billion, while margin contracted 140 bps Y-o-Y to 28 per cent. PAT increased 20 per cent Y-o-Y to Rs 15.4 billion.

 

BEL order  book 

 

BEL's order book at the end of Q2FY27 stood at Rs 687 billion (90 per cent comprising defence programmes and the balance from non-defense businesses), with an order inflow of Rs 38 billion during the second quarter.

 

According to MOFSL, BEL's base order inflows fell 31 per cent Y-o-Y as ordering is yet to ramp up meaningfully from the Ministry of Defence (MoD). A large order such as QRSAM, worth Rs 300 billion, is delayed and company is hoping to receive it at the next CCS meeting. 

 

BEL is also hopeful of a large order worth Rs 200 billion from next-generation corvettes.

 

The brokerage noted that there have been certain delays by the MoD in finalising projects, but it expects inflows to ramp up in the coming quarters.

 

MOFSL has maintained its estimates and expect a revenue/Ebitda/PAT CAGR of 15 per cent/14 per cent/15 per cent over FY26-29. 

 

The brokerage added that key risks and concerns for BEL include a slowdown in order inflows from the defense and non-defence segments, intensified competition, further delays in the finalisation of large tenders, a sharp rise in commodity prices, and delays in payments from the MoD. 

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.