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Alpha | Bharat Electronics Ltd.


Bharat Electronics Ltd. – Engineering International Options. Empowering Development

Established in 1954, Bharat Electronics Ltd. (BEL) is a Navratna Public Sector Enterprise with experience in a spectrum of actions, encompassing the design, improvement, manufacturing, provide and life cycle help of strategic digital merchandise and methods. It holds a distinguished place within the Indian Defence phase and is making inroads into the civilian segments whereas increasing their defence operations into the worldwide markets. The corporate is engaged in manufacture and provide of strategic digital merchandise primarily to Defence Providers. Headquartered in Bengaluru, it has 9 manufacturing items as on 31 March 2023. The Authorities of India (GoI) stays the biggest shareholder of BEL with the shareholding of 51.14% as on 31 December 2023.

Merchandise and Providers

The corporate majorly capabilities in defence and non-defence enterprise segments. Defence merchandise contains of navigation methods, communication merchandise, land-based radars, naval methods, digital warfare methods, avionics, electro optics, weapon methods, shelters and masts, batteries and so on. Non-defence consists of services and products for cyber safety, e-mobility, railways, e-governance methods, homeland safety, civilian radars and so on. Different companies provided by the corporate consists of software program, digital manufacturing and exports.

Subsidiaries: As on 31 March 2023, the corporate has 2 subsidiaries and a pair of affiliate firms.

Key Rationale

  • Increasing defence order e-book – BEL has just lately received a Rs.2,270 crores deal from The Ministry of Defence (MoD) for 11 Shakti Digital Warfare Techniques, together with related tools for the Indian Navy. The corporate is anticipating extra EW orders from avionics and airborne platforms. MoD has signed a landmark contract with BEL for procurement of digital fuzes for the Indian Military for a interval of 10 years, at a complete price of Rs.5,330 crores. Moreover, the corporate signed a contract with Indian Air Pressure (IAF) for procurement of software-based gentle weight man-portable radio communication units.
  • Wholesome non-defence order e-book – On the non-defence aspect, the corporate has signed a contract with Central Board of Oblique Taxes and Customs for his or her infrastructure, IT infrastructure improve, price round Rs.665 crores plus taxes, one other contract with UP Authorities for upgradation of UP 112. The corporate is establishing a brand new strategic enterprise unit for cybersecurity. It’s already working with AIMS to ramp-up their cyber safety. It additionally acquired orders price Rs 2,673 crores from Goa Shipyard Restricted (Rs.1,701 crores) and Backyard Attain Shipbuilders & Engineers (Rs.972 crores) for provide of 14 sorts of sensors to be used on Subsequent Technology Offshore Patrol Vessels (NGOPV).
  • Q3FY24 – Impacted by geopolitical conflicts in sure economies, the income remained flat at Rs.4,162 crores on a YoY foundation. Working revenue elevated by 24% from Rs. 863 crores of Q3FY23 to Rs.1,072 crores of Q3FY24. Web revenue improved by 40% to Rs.860 crores as in comparison with the corresponding interval within the earlier yr. BEL had a money steadiness of Rs.8,000 crores as of the top of earlier quarter.
  • Monetary Efficiency – The corporate has generated income and PAT CAGR of 11% and 16% over the interval of 5 years (FY18-23). Common 5-year ROE & ROCE is round 21% and 28% for FY18-23 interval. The corporate has sturdy steadiness sheet with zero debt in its steadiness sheet.


The Indian electronics system design and manufacturing (ESDM) sector is likely one of the quickest rising sectors within the economic system and is witnessing a powerful growth within the nation. The ESDM market in India is well-known internationally for its potential for consumption and has skilled fixed development. Indian producers are attracting the eye of multinational firms because of shifting world landscapes in electronics design and manufacturing capabilities, in addition to price constructions. The Authorities of India attributes excessive precedence to electronics {hardware} manufacturing, because it is likely one of the essential pillars of Make in India, Digital India and Begin-up India programmes. In FY23, the exports of digital items have been recorded at US$ 23.57 billion as in comparison with US$ 15.66 billion throughout FY22, registering a development of fifty.52%. The Indian electronics manufacturing business is projected to succeed in US$ 520 billion by 2025.

Development Drivers

Union Funds 2023-24 has allotted Rs. 16,549 crore (US$ 2 billion) for the Ministry of Electronics and Info Know-how, which is almost 40% greater on yr. Underneath Defence electronics, FDI as much as 49% is allowed beneath computerized route and past 49% via authorities approval. The Nationwide Coverage on Electronics (NPE) envisions to place India as a world hub for ESDM by encouraging and driving capabilities within the Nation for creating core parts.

Opponents: Bharat Dynamics Ltd (BDL), Knowledge Patterns (India) Ltd and so on

Peer Evaluation

In comparison with the above opponents, BEL has generated greater return ratios according to the expansion within the gross sales. This means the corporate’s means to generate higher earnings for the capital invested.


BEL had given a income steerage of Rs.20,000 crores by finish of FY24 and the corporate has already acquired the order of Rs.26,761 crores as of Q3FY24 within the gentle of fast-tracked order procurement from GoI. The administration has given gross margin steerage of 42% and EBITDA margin steerage 23% for the present monetary yr. It has given capex steerage of Rs.700-Rs.800 crores yearly for FY25 and FY26. As of Q3FY24, BEL presently has a really vital order e-book of Rs.76,000 crores with an execution interval between 18 months to 4 years. The corporate can also be anticipating QRSAM orders that Air Pressure and Military are engaged on presently.


The federal government’s emphasis on import discount, growing electronics share in defence, firm’s market management place, a powerful order backlog, and wholesome margin profile locations BEL in a powerful place to proceed its development momentum. We advocate a BUY score within the inventory with the goal worth (TP) of Rs. 225, 25x FY25E EPS.


  • Geopolitical disaster – Provide chain disruptions because of geopolitical conflicts would possibly adversely influence the corporate’s operations.
  • Consumer Focus Threat – BEL is deriving greater than 80% of its income from the Indian defence sector. Any main minimize within the defence spending by the Authorities will considerably influence the order e-book and thereby income.

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