Buy BEL shares, price target Rs 125: ICICI Securities

BEL share price target: Domestic brokerage firm ICICI Securities is bullish on public sector aerospace and defence company Bharat Electronics Limited (BEL). ICICI Securities said that it sees sound growth potential in the company.

According to ICICI Securities report, BEL’s management expects revenue growth of 15-20 per cent in FY24, spurred by Quick Reaction Surface-to-Air Missile (QRSAM) order and commissioning of new facilities.

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The report said that despite order inflow of a mere Rs 3500 crore in 9 months FY23, the management has reiterated its FY23 order inflow guidance of Rs 200 bn on the basis of:

-Himshakti programme of Rs3300 crore

-Atulya medium-power radar of Rs 2000 crore to 3000 crore

-Orders worth Rs10000 crore for radars and SONAR expected from naval shipyards

Further, of the current orderbook of Rs 51,200 crore, almost 75-80 per cent is on nomination basis and Rs 46000 crore (80 per cent) is from the defence sector. While the current book:bill ratio at 3x appears comfortable, ICICI Securities sees orderbook accretion as a major driver of stock performance.

The Q4FY23 is critical for BEL as the company expects orderbook accretion of Rs 15,500 crore.

The brokerage has maintained ‘Buy’ rating on BEL with a price target of Rs 125.

BEL shares quoted Rs 94.20 apiece on Friday around 3 PM, up 1 per cent from previous close of Rs 93.10. The counter has yielded a positive return of 35 per cent in the past 1 year.

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