Bharat Electronics Q2 Results Review - On The Roll: ICICI Securities

ICICI Securities Report

Bharat Electronics Ltd. reported a strong Q2 FY24 performance despite logistics-related disruptions at the month end. Key points:

1. Ebitda rose 22% YoY at Rs 10.1 billion.

2. Ebitda margin rose 338 basis points YoY at 25.3%.

3. Deliveries during the quarter were impacted by a two-day strike of transporters in Bangalore in end-September 2023.

4. Orderbook stood at a healthy Rs 687 billion (3.87 times trailing twelve months revenue) and implied H1 FY24 order inflow was at Rs 154 billion.

Going ahead, we expect execution to pick up further in H2 FY24, though exports might be impacted by the ongoing Israel-Palestine conflict.

That said, we see no risk to our estimate of Ebitda growth of 13% YoY and order inflow of Rs 200 billion for FY24. We maintain 'Buy' and our target price of Rs 150 at 27 times FY25E earnings per share.

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