Q3FY21 Company Update - Bharat Electronics - ICICI Direct

Bharat Electronics (BEL) reported revenues at Rs. 2296 crore, growth of 1.1% YoY (vs. I-direct estimate of Rs. 2878 crore), on the back of normalising supply chain and business operations. Absolute EBITDA for the quarter came in at Rs. 440.4 crore (vs. our estimate of Rs. 495.1 crore), up 24.1% YoY. While EBITDA margin came in better than estimated at 19.2% (above our estimate of 17.2%) improving ~360 bps YoY, owing to reduced raw material cost. Consequently, PAT came in at Rs. 261.9 crore, up 21.7%, primarily due to improved margins. However, other income fell 30.3% to Rs. 23 crore YoY.

Valuation & Outlook

Overall, BEL's steady execution for Q3FY21 is expected to keep the momentum stable for coming quarters. Overall, expected double digit revenue growth, sustainable margins, better order inflows and strong order book of Rs. 52148 crore suggests strong performance in the long term. Also, strategy to diversify into non-defence areas, focus on increasing exports and services share would aid long term growth and help de-risk its business model. We introduce FY23E estimates and expect BEL to report revenue, EBITDA, PAT CAGR of 11.6%, 10.5%, 10.2%, respectively, in FY20-23E. We maintain our target price at Rs. 170 (17x on FY23E EPS) and reiterate BUY rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_BharatElectronics_Q3FY21.pdf

Shares of BHARAT ELECTRONICS LTD. was last trading in BSE at Rs.133.1 as compared to the previous close of Rs. 136.05. The total number of shares traded during the day was 2181985 in over 6897 trades.

The stock hit an intraday high of Rs. 138.4 and intraday low of 132.55. The net turnover during the day was Rs. 298262067.

Source : Equity Bulls

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