Earnings Outlook
Strong order inflow to boost Bharat Electronics' Q1 net
This story was originally published at 20:09 IST on 25 July 2025
Register to read our real-time news.By Avishek Rakshit
KOLKATA - Being one of the largest beneficiaries of the government's spending on defence indigenisation, state-owned defence sector company Bharat Electronics Ltd. is expected to have maintained its on-year growth momentum in the latest quarter. The order book of the latest entrant into the Nifty 50 index has grown by a little over 10% sequentially to INR 790 billion as on Jun. 30.
Bharat Electronics is expected to report a net profit of INR 9 billion in the June quarter, up 15.5% on year, according to the average of estimates from 10 brokerages. The company's revenue is expected to rise almost 15% on year to INR 48.1 billion, according to the average of these estimates. However, on a sequential basis, the net profit is likely to fall 57.4% and the revenue may decline by 47.2%. Brokerages have not provided any reason for such a sharp drop sequentially; as such this could be the outcome of some orders being completed.
Bharat Electronics, which will declare its June quarter results Monday, had reported a net profit of INR 7.8 billion on revenues of nearly INR 42 billion in the year-ago quarter.
Kotak Institutional Equities is the most bullish on the company and projects the highest net profit and revenue at nearly INR 10 billion and INR 50.4 billion, respectively. Nirmal Bang Equities Pvt. Ltd. is the most cautious on the company's profit, projecting it as the lowest at INR 7.6 billion. Despite its optimism on the defence company, Nuvama Wealth Management Ltd. estimated the revenue the lowest at INR 44.5 billion.
Nomura Equity Research, which has projected the company's revenue and profit taking into account a low base effect, said that there were order inflows of INR 73.5 billion in the June quarter, which boosted the total order book.
Nuvama is bullish on the upcoming defence equipment tenders valued at INR 1 trillion, including the INR-300-billion Quick Response Surface to Air Missile tender, where Bharat Electronics has a fair chance to bag a substantial part of the order.
Motilal Oswal Financial Services Ltd. also expects Bharat Electronics to bag significant deals such as the defence indigenisation Project Kusha, Long Range Surface-to-Air Missile, and Electronic Warfare programmes. It also expects the company to bag new export orders.
In the June quarter, the navratna defence undertaking bagged orders like Integrated Drone Detection and Interdiction System, Software Defined Radio and Data Communication Unit for attack guns, artificial intelligence solutions for ships, and communication equipment.
Amid the optimism about its order book and its potential to bag new deals, all brokerages stressed on the company's ability to execute the orders, which is the key determinant of the top line that the company will report.
Nomura expects the company's gross margins to increase 155 basis points on year and Kotak expects the earnings before interest, tax, depreciation, and amortisation margin to expand by 280 basis points on year, but fall by 560 basis points on quarter. It reasoned that the fall in margins sequentially is on account of changes in the product mix.
Motilal Oswal, stressed the execution of the order backlog, increase in the company's exports, and the government's further drive to indigenise modules and subsystems for the armed forces as the primary factors which will affect Bharat Electronics' future financial performance. It is of the view that margins are expected to normalise and remain flat on year at 22.3%.
Bharat Electronics is expected to report an EBITDA of a tad below INR 11 billion in the June quarter, according to the average of estimates from nine brokerages.
Friday, shares of Bharat Electronics closed at INR 395.20, down 0.77% on the National Stock Exchange. Of the 14 research reports on the stock available with Informist, 13 have a ‘buy' rating on the scrip at an average target price of INR 397 and one has a ‘hold' rating.
Following are the Apr-Jun earnings estimates for Bharat Electronics based on reports from 10 brokerages in descending order of the estimate of net profit:
|
Broker Name |
Net sales (in million rupees) |
Net profit (in million rupees) |
EBITDA (in million rupees) |
|
Kotak Institutional Equities |
50,379.00 |
9,966.00 |
12,687.00 |
|
Nomura Equity Research |
48,399.00 |
9,545.00 |
11,897.00 |
|
Nuvama Wealth Management Ltd |
44,528.00 |
9,350.00 |
11,577.00 |
|
Sharekhan Ltd |
48,800.00 |
9,270.00 |
|
|
Prabhudas Lilladher Pvt Ltd |
49,622.00 |
9,149.00 |
11,413.00 |
|
Antique Stock Broking Ltd |
48,286.00 |
9,076.00 |
11,106.00 |
|
JM Financial Institutional Securities Pvt Ltd |
48,731.00 |
8,700.00 |
9,745.00 |
|
Elara Securities (India) Pvt Ltd |
47,528.00 |
8,579.00 |
10,504.00 |
|
Motilal Oswal Financial Services Ltd |
48,429.00 |
8,388.00 |
10,801.00 |
|
Nirmal Bang Equities Pvt Ltd |
46,679.00 |
7,597.00 |
9,129.00 |
|
Average |
48,138.10 |
8,962.00 |
10,984.33 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000 /+91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
