Mirae Asset Sharekhan has reiterated its BUY call on Bharat Electronics Ltd (BEL), projecting robust growth on the back of a strong order pipeline, sector tailwinds, and government initiatives aimed at bolstering domestic defense manufacturing. The research house has set a revised price target (PT) of Rs 445, reflecting confidence in BEL’s ability to capitalize on India’s increasing defense expenditure and strategic procurement programs. With a current market price (CMP) of Rs 401, BEL stands out for its healthy financial metrics, expanding order book, and leadership in indigenized defense technology. Investors are advised to consider BEL for its compelling growth prospects, while being mindful of execution risks and sectoral competition.

Medium Term BUY Call with Target Price Rs 445

Mirae Asset Sharekhan maintains a BUY rating on BEL, with a revised price target of Rs 445, representing a potential upside from the current market price of Rs 401. This call is underpinned by BEL’s strong earnings visibility, diversified order book, and pivotal role in India’s defense modernization drive.

Key Investment Thesis: Strategic Positioning and Sector Tailwinds

BEL is uniquely positioned to benefit from the Indian government’s AatmaNirbhar Bharat and Make in India initiatives, which are driving a paradigm shift in defense procurement and manufacturing. The Ministry of Defence’s recent approval of Rs 40,000 crore for emergency procurement, along with anticipated orders worth Rs 30,000 crore for the indigenous Quick Reaction Surface-to-Air Missile (QRSAM) system, underscores BEL’s strategic importance. The company’s robust order inflow pipeline, healthy cash reserves, and strong return ratios further strengthen its investment case.

Financial Performance: Growth Trajectory and Valuation

Financial metrics reflect BEL’s operational excellence and growth momentum:

Net sales are projected to rise from Rs 23,769 crore in FY25 to Rs 32,431 crore in FY27E, marking a 17% CAGR in both revenue and PAT for FY25-27.

Operating profit margins are expected to stabilize near 28.8% by FY27E, indicating strong cost control and pricing power.

Adjusted PAT is forecasted to reach Rs 7,330 crore in FY27E, with adjusted EPS climbing to Rs 10.0.

Valuation multiples remain elevated but justified by sector leadership: FY26E/FY27E P/E stands at 47x/40x, with a price target based on 44x FY27E EPS.

Return on Equity (RoE) is expected to maintain a healthy trajectory, peaking at 29.3% in FY25 and remaining above 26% through FY27E.

Order Book and Pipeline: Visibility for Future Growth

BEL’s order book stands at Rs 71,650 crore—2.5 times its FY25 sales—providing strong revenue visibility for the next several years. Since April 2025, BEL has already secured orders exceeding Rs 6,200 crore, nearly 25% of its annual guidance. The company anticipates cumulative inflows of Rs 60,000 crore in FY26, including QRSAM. Major upcoming orders include electronic warfare systems, avionics for Light Combat Aircraft, and advanced radar systems. Participation in the development of “Kusha,” India’s indigenous alternative to the S-400 air defense system, further augments the long-term pipeline.

Sectoral Dynamics: Policy Support and Market Expansion

India’s defense production has accelerated, achieving a 12.6% CAGR over FY20-FY24, with the annual output crossing Rs 1.27 lakh crore in FY24 and targeted to reach Rs 1.75 lakh crore in the current fiscal. Export opportunities are burgeoning, with BEL aiming for a 10% revenue contribution from exports in the long term, up from the current 4%. The government’s push for indigenization, higher FDI limits, and the establishment of defense corridors in Tamil Nadu and Uttar Pradesh are creating a conducive environment for BEL’s expansion.

Company Strategy: Diversification and R&D Focus

BEL is actively investing in R&D, modernizing manufacturing capabilities, and forming joint ventures to enhance its business visibility and product portfolio. The company’s strategic focus on both defense and non-defense exports, coupled with initiatives to improve operational efficiency, positions it well for sustainable growth. BEL’s management targets a significant increase in export revenues and is leveraging its technological expertise to support India’s defense self-reliance.

Stock Performance and Shareholding Structure

BEL has delivered strong returns, outperforming the Sensex over multiple time frames:

1-month: +5.4% absolute, +5.2% relative to Sensex

3-month: +41.6% absolute, +33.2% relative

12-month: +30.4% absolute, +24.2% relative

Promoters hold a majority stake (51.1%), with significant institutional participation from FIIs (17.6%) and DIIs (20.9%). The top shareholders include leading asset management companies and global investment firms.

Key Risks and Considerations

Investors should remain vigilant regarding the following risks:

Delays in order execution or slower pace of fresh orders could impact revenue growth.

Rising raw material costs and component shortages, particularly semiconductors, may pressure margins.

Intensifying competition from private sector entrants as the defense sector liberalizes.

Stock Levels and Investor Targets

Current Market Price (CMP): Rs 401
Price Target (PT): Rs 445
Support Level: Rs 380
Resistance Level: Rs 408 (52-week high)

Investors are advised to accumulate BEL on dips, with a medium- to long-term investment horizon, as the company is well-positioned to benefit from sectoral tailwinds and robust government support.

Valuation Table

Conclusion: Investment Outlook

BEL’s strategic alignment with national defense priorities, robust order pipeline, and operational excellence make it a compelling investment for those seeking exposure to India’s defense sector growth story. The stock offers a balanced risk-reward profile, with a clear upside potential to Rs 445, supported by sectoral momentum and prudent management. Investors are encouraged to monitor order inflow trends and sector developments to optimize entry points.