Bharat Electronics Ltd (BEL) has seen its stock price rise by 4%, driven by strong Q3 earnings and increased broker confidence. But is this rally sustainable? Let’s break it down.
Bharat Electronics Q3FY25 results:
BEL, a Navratna Defence PSU, reported robust earnings for Q3FY25, showcasing strong revenue growth and profit expansion. Here’s a snapshot of its financial performance:
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| Financial Metric | Q3FY25 | Q3FY24 | YoY Growth |
| Revenue | ₹5,643 crore | ₹4,120 crore | 36.97% |
| EBITDA Margin | 28.7% | 23.7% | +500 bps |
| Profit Before Tax (PBT) | ₹1,754 crore | ₹1,172 crore | 49.64% |
| Profit After Tax (PAT) | ₹1,316 crore | ₹893 crore | 47.33% |
Key highlights:
- The company’s EBITDA margin expansion to 28.7% reflects operational efficiency.
- BEL’s revenue from operations for the nine months ending December 2024 stood at ₹14,173.68 crore, up from ₹11,484.92 crore in the previous year.
- The company’s order book remains strong at ₹71,100 crore as of January 1, 2025.
What’s driving the stock rally?
1. Strong earnings beat expectations
BEL’s earnings exceeded estimates across all key metrics, leading to increased investor confidence. Its net profit grew by 47.3% YoY, reinforcing its position as a stable, high-growth defence PSU.
2. Brokerage upgrades and higher price targets
Leading brokerage firms have revised their targets for BEL, citing robust performance and future growth potential.
| Brokerage | Rating | Target Price (₹) | Key Takeaways |
| Jefferies | Buy | 370 | EBITDA 51% above expectations, strong margin expansion |
| Nomura | Buy | 363 | FY25 earnings growth projection raised by 8% |
| Macquarie | Outperform | 350 | Large orders expected in FY26 |
| Morgan Stanley | Overweight | 364 | Expansion in non-defence business |
| JP Morgan | Overweight | 343.00 | Order inflows expected at ₹27,000-30,000 crore over two years |
3. Order book strength and future prospects
- BEL has a solid order book of ₹71,100 crore, providing strong revenue visibility for the coming quarters.
- A potential order in the range of ₹25,000-₹50,000 crore for FY26 is expected, further boosting long-term prospects.
4. Expanding into non-defence segments
Morgan Stanley highlighted BEL’s focus on diversifying into non-defence sectors, targeting a 15% revenue share in the coming years. This diversification could enhance revenue stability and reduce reliance on government defence orders.
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BEL stock performance: How has it fared recently?
| Timeframe | Stock Price Change |
| 1 Day | +4.04% |
| 5 Days | +9.57% |
| 1 Month | -1.16% |
| 6 Months | -8.34% |
| 1 Year | +55.70% |
| 2 Years | +214% |
BEL’s stock has shown volatility, with recent declines in the past six months but a significant 55.7% gain in the past year. The 52-week high stands at ₹340.50, while the low is ₹171.75.
Market sentiment:
- 22 out of 26 analysts tracking BEL have a ‘Buy’ rating.
- The consensus 12-month target price is ₹343.9, indicating a potential upside of 20.7%.
Should you invest in BEL now?
Bull case:
- Strong Q3 earnings and robust order inflow expectations.
- Increased brokerage targets indicate bullish sentiment.
- Expansion into non-defence sectors adds revenue diversification.
Bear case:
- Potential short-term revenue volatility due to order execution cycles.
- High valuation: BEL’s PE ratio stands at 42.81, which may make it less attractive for value investors.
Investor takeaway: If you believe in India’s defence sector growth and BEL’s ability to execute large orders efficiently, this stock remains a strong contender for long-term investment. However, given recent volatility, timing your entry could be key.
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Conclusion
BEL’s 4% stock price surge is backed by solid fundamentals, strong brokerage support, and future order expectations. With a growing order book and improving margins, the company continues to cement its position as a leading defence PSU. Whether this momentum sustains will depend on upcoming order inflows and overall market conditions.
