1. At a Glance
Bharat Electronics Ltd (BEL) just dropped a Q1 FY26 bomb: Revenue ₹4,440 Cr (+5.2% YoY) and PAT ₹969 Cr (+25% YoY). Defence orders worth ₹2,200 Cr in July alone keep the order book loaded at ₹74,859 Cr. Stock trades at a P/E of 52—expensive, but so is national security.
2. Introduction
Imagine a company that supplies radars, missiles, and electronic warfare systems to the army—while quietly clocking 30% ROCE. That’s BEL: the defence PSU flexing both tech and profits while retail investors salute.
3. Business Model – WTF Do They Even Do?
- Core: Defence electronics (81% of revenue) – radars, fire control, electronic warfare, network-centric systems.
- Civil: Small slice—mostly homeland security, e-Governance.
- Moat: Govt orders, tech tie-ups, and a near monopoly in defence electronics.
4. Financials Overview
- Q1 FY26 Revenue: ₹4,440 Cr
- Net Profit: ₹969 Cr
- OPM: 28% (defence margins looking muscular)
Verdict: Stable growth, fat margins, and a PSU dividend that’s not stingy.
5. Valuation – What’s This Stock Worth?
- Current P/E: 52x (HAL trades at 36x)
- Fair Value Range: ₹350 – ₹420
Punchline: The market is paying a premium because defence orders = guaranteed money.
6. What-If Scenarios
- Bull Case: Faster execution + export boom → ₹450.
- Bear Case: Delay in defence capex → ₹330.
- Base Case: ₹380–₹400 with steady orders.
7. What’s Cooking (SWOT Analysis)
Strengths: Strong order book, high ROE, tech leader in defence.
Weakness: PSU culture = slower innovation.
Opportunities: Exports, private partnerships, AI/Unmanned Systems.
Threats: Policy delays, order execution risks.
8. Balance Sheet 💰
| Particulars (Mar’25) | Amount (₹ Cr) |
|---|---|
| Equity Capital | 731 |
| Reserves | 19,243 |
| Borrowings | 61 |
| Total Liabilities | 40,832 |
| Comment: Debt negligible; reserves stacked like an army bunker. |
9. Cash Flow (FY23–FY25)
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | 1,199 | 2,708 | -1,262 |
| FY24 | 4,659 | -5,924 | -1,475 |
| FY25 | 587 | 617 | -1,696 |
| Snark: Ops cash flow dipped in FY25—execution delays biting? |
10. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 29.3% |
| ROCE | 39.0% |
| D/E | 0.01x |
| PAT Margin | 30% |
| P/E | 52x |
| Punchline: Ratios scream “premium defence play”—investors nod. |
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 17,734 | 4,090 | 2,986 |
| FY24 | 20,268 | 5,051 | 3,985 |
| FY25 | 23,769 | 6,834 | 5,323 |
| TTM | 23,965 | 7,124 | 5,500 |
| Comment: Order inflow > revenue = growth pipeline locked. |
12. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| HAL | 30,981 | 8,360 | 36 |
| BEL | 23,965 | 5,500 | 52 |
| BDL | 3,345 | 550 | 108 |
| GRSE | 5,076 | 527 | 54 |
| Peer verdict: BEL = PSU darling with better margins than peers, but valuation is not cheap. |
13. EduInvesting Verdict™
BEL is that PSU which is not boring—it’s loaded with orders, flush with cash, and riding India’s defence spend wave. Just remember, at 52x earnings, the market already salutes it.
Written by EduInvesting Team | 28 July 2025
Tags: Bharat Electronics, Defence PSU, Radar Systems, EduInvesting Premium
