Bharat Electronics Limited (BEL) -  Research Report

Bharat Electronics Limited is a A / - group Aerospace & Defense sector company having Face value of Rs 1.00. BEL is a multi-product, multi-technology, multi-unit company serving in diverse fields in India and abroad. The products of the company include products for communication, radars, naval systems, opto electronics, Electronic Warfare systems, weapon system, tank electronics and simulators, switching equipment, TV and broadcast, DTH, telecom, simputer, electronic voting machines, electronic components & also offers a range of services such as contract manufacturing, design and manufacturing services, semiconductor device packaging, software development and quality assurance facilities.

Fundamentals (FY23):

CMP: 287.10

Financial Results:

Company’s Net Sales was Rs 3,140.61 crore in June 2022 up by 90.49%, Quarterly Net Profit was Rs. 365.65 crore in June 2022 up by 1397.95% and its EBITDA stands at Rs. 604.58 crore in June 2022 up 424.17% compared to June 2021.

List of orders bagged by the company:

1. In September, 2019 Company won order worth Rs 5,357 crores for seven squadrons of Akash Missile System for the Indian Air Force.

2. On November, 2021 Company signed a contract with Airbus Defence and Space worth $93.15mn for the manufacture and supply of Radar Warning Receiver (RWR) and Missile Approach Warning System for the prestigious C295 aircraft programme. It is the biggest order received by the company.

3. In December, 2021 Company bagged it’s one of the biggest orders from HAL worth Rs. 2400cr. for manufacturing and supply of different airborne electronic systems for 83 Tejas MK1A fighter aircraft involving the supply of critical avionic Line Replaceable Units (LRUs) related to Digital Flight Control Computers, Air Data Computers, Weapon Computers, LRUs related to Radar Warning Receiver (RWR) and Head Up Display.

4. In January, 2022 Bharat Electronics (BEL) and Hyperion Global Group signed contract worth $73 billion to develop, manufacture and supply Internet of Things (IoT) devices for the US market.

5. On March, 2022 the company secured two separate orders from India's Ministry of Defence worth an aggregate Rs 3102 crore. One was for Instrumented Electronic Warfare Range (IEWR) for the Indian Air Force and the overall cost of the contract is estimated to be Rs 1109 crore. Second was the supply of Advanced Electronic Warfare (EW) suite for Fighter aircraft of Indian Air Force and overall cost of the contract is estimated to be Rs 1993 crore.

6. On July, 2022 company signed a contract with the Ministry of Defence, Government of India, worth around Rs. 250 crores, towards supply of nine Integrated ASW Complex (IAC) MOD.

As per reports, the company’s non-defence revenue may see substantial growth in FY24E. The company’s ingeniously developed Train Collision Avoidance System (TCAS) is under trial. DMRC has completed the ingenious Automatic Train Supervision system (i-ATS) developed by BEL and may be ordered by them soon.

In past three years the stock gave a return of 188.63% as compared to Nifty 100 which gave a return of 58.48% and 194.11% return compared to 56.50% rise in Sensex on the back of big orders bagged by the company. Currently its orderbook is around Rs 55,000 crore and the stock is trading near its all-time high.

Many research firms have given "BUY" rating for the company. Considering the company’s growth potential along with bag full of orders, Government’s aggressive steps in Defense field and good financial results posted by the company. The stock is recommended for long term period.

HET ZAVERI

info@smartinvestment.in

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