Prabhudas Lilladher said in a note that “Management during its recent conference call emphasized that the order pipeline for FY23 remains healthy, with expected orders such as Akash missile system, war system , radars, naval fire control system, etc. worth ~Rs200bn. Given a solid order book (Rs553.3 billion, 3.3 x TTM of revenue), management has been oriented towards revenue growth of around 15% with an EBITDA margin of between 21 and 23% for FY23. Export opportunities are strong and management expects orders of approximately US$400-450 million in FY23 versus US$180 million in FY22. The company has also focused on diversifying into non-defense verticals such as electric vehicles, metros, electronic warfare, healthcare, homeland security, and more. incurred in fiscal year 23.”

“We remain positive on BEL’s long-term growth story given 1) its strong order book, 2) order pipeline and 3) diversification into new verticals like EV battery, medical equipment, metro, emphasis on the export market, government’s emphasis on indigenizing products, etc. We have revised our earnings estimate from 1.9%/3.4% to FY23/24 taking into account the rise in other income The stock is currently trading at 22.9x/19.1x FY23/24E Maintaining a “Buy” rating on the shares with a revised TP of Rs295 (Rs285 earlier) valuing it at a PE of 21x FY24E (as before),” research analysts Prabhudas Lilladher said.

“Overall, double-digit revenue expected, order intake growth, strong margins and a solid backlog to ensure better performance. We remain positive over the long term and maintain our BUY rating on the stock. We appreciate BEL at ₹315 or 25x P/E on FY24E EPS,” ICICI Securities said.

According to ICICI Securities, the main drivers of BEL’s future price performance are the strategy of diversification into areas other than defence, the focus on increasing the share of exports and services would contribute to long-term growth. term and would help de-risk its business, a strong pipeline of orders in FY23-24E, we expect revenue and EBITDA to grow at a CAGR of approximately 16.8%, 16.3 %, respectively, in fiscal year 22-24E, helped by sustained margins of 21-22% and a strong balance sheet, double-digit earnings ratios.

The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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