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Informist, Monday, Jul 29, 2024

--Bharat Electronics Apr-Jun PAT up over 46% YoY at 7.76 bln rupees

--Bharat Electronics Apr-Jun revenue 41.99 bln rupees vs 35.11 bln

--Analysts had estimated the company's net profit to be 6.87 bln rupees

--Bharat Electronics: Sees FY25 revenue growth at 15%

--Bharat Electronics: See FY25 gross margin 41-42%

--Bharat Electronics: See FY25 EBITDA margin 23-25%

--CONTEXT: Bharat Electronics mgmt's comments in post-earnings call

--Bharat Electronics: Order book as on Jul 31 at 767 bln rupees

--Bharat Electronics: Expect 5-6 orders of 10-25 bln rupees each FY25

--Bharat Electronics: See FY25 capex around 8 bln rupees

By Narayana Krishna

HYDERABAD - Robust order inflows and better execution helped the Bengaluru-based public sector defence manufacturer Bharat Electronics Ltd report a healthy earnings growth for Apr-Jun. The company's net profit for the June quarter jumped 46.2% year-on-year to 7.8 bln rupees, and revenue from operations rose 19.6% to 42 bln rupees, exceeding analysts’ expectations.

Analysts had estimated the company's net profit at 6.9 bln rupees and revenue of 39.1 bln rupees. Sequentially, the net profit fell 56.5% and revenue declined 50.8%.

In a post-earnings conference call, Bharat Electronics' management said the Apr-Jun performance aligns with the company's aim to achieve a 15% year-on-year revenue growth for 2024-25 (Apr-Mar). The company is confident of maintaining this growth target, backed by a large order pipeline in the coming quarters. For the Apr-Jun quarter, about 84% of the revenue was generated from defence-related business, with the remainder from non-defence and exports.

ORDER BOOK

Bharat Electronics has an order book of 767 bln rupees as of Jul 31, executable over the next 2-3 years. The company expects at least 5-6 orders worth 10-25 bln rupees each in the current financial year. Overall, the company anticipates adding 250 bln rupees worth of orders during the current fiscal year and the next.

Bharat Electronics' management said that there are a couple of orders under process for missiles and other defence products with the Defence Ministry, which may be added to the overall order book.

Bharat Electronics is investing 8 bln rupees in capital expenditure for the current financial year to add new capacities and expand existing units to meet its order book execution goals. The company’s new facility at Machilipatnam in Andhra Pradesh is expected to begin production this financial year, the management stated.

Bharat Electronics makes defence products like missiles subsystems, communication products such as radars, naval systems, electronic warfare systems, avionics, and navigation systems, besides products used in non-defence sectors like railways, metro, civil aviation, and telecommunications. The company also develops software and electronics products.

MARGINS

Bharat Electronics reported Apr-Jun earnings before interest, tax, depreciation, and amortisation or EBITDA margin at 22.56%, an improvement of 356 basis points year-on-year. The company management guided for a gross margin of 41-42% and an EBITDA margin of 23.25% for the current fiscal year.

Today, shares of Bharat Electronics Ltd ended at 321.35 rupees on the National Stock Exchange, up 3.7% from its previous close.  End

Edited by Akul Nishant Akhoury

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