Bharat Electronics up 4%; hits new high on securing orders worth Rs 3,915cr

Shares of Bharat Electronics (BEL) hit a record high of Rs 163, as they rallied 4 per cent on the BSE in Thursday’s intra-day trade after the company said it received orders worth of Rs 3,915 crore.
The stock of state-owned defense company surpassed its previous high of Rs 157.50 touched on December 4. 

In an exchange filing on Wednesday after market hours, BEL said the company received an order of Rs 580 crore from Indian Army for AMC (Annual Maintenance Contract) of Radars. This project will have participation of Indian electronics and associated industries, including MSMEs, which are sub-vendors of BEL, the company said.

The company further said it also received additional orders worth Rs 3,335 crore since the last disclosure on September 15, 2023 and the said orders pertain to AMC for AEW&C system (Airborne Early Warning & control), Uncooled TI sights, Software Defined Radios, SWIR pay load, AMC for IACCS (Integrated Air Command and Control System), Passive Night Vision Binoculars etc.

All the equipment manufactured by BEL are part of ‘Aatmanirbhar Bharat’ program, it added. With this BEL has in all received orders worth of around Rs 18,300 crore till now in the financial year 2023-24.

At 09:19 AM; BEL was quoting 2 per cent higher at Rs 158.90, as compared to 0.35 per cent decline in the S&P BSE Sensex. A combined 11.33 million equity shares changed hands on the NSE and BSE.

BEL is a leading aerospace and defence electronics company. It primarily manufactures advanced electronics products. The company develops multi-product, multi-technology – diverse product range including radar, missile systems, electronic warfare & avionics, anti-submarine warfare, electro-optics, homeland security, civilian products, etc.

The government’s emphasis on ‘Make in India’ and ‘Atmanirbharta’ towards self-reliance in manufacturing provides great opportunity for import substitution and promoting innovative indigenous solutions for defence equipment.

BEL is favourably positioned to capture the larger pie of huge opportunity in Indian defence & space electronics systems/sub-systems or components industry which is expected to clock 13-14 per cent CAGR over FY22-27 with the share of defence electronics (in total defence production) increasing to 40-42 per cent by FY27 (vs. current share of 36-37 per cent).

BEL is expected to be the key beneficiary in this impending opportunity in indigenisation of defence platforms considering its strong technical expertise and capabilities in designing, developing and manufacturing a wide range of strategic electronic products/systems.

ICICI Securities believe that the company will be able to exceed its full year order inflow guidance of Rs 20,000 crore. The order backlog is estimated to be at ~Rs 69,000 crore (3.8x TTM revenues) provides healthy revenue growth visibility. Moreover, the order pipeline remains strong in defence electronics systems, non defence and exports, the brokerage firm said in a note.