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ICICI Securities Report
Bharat Electronics Ltd. has won orders worth Rs 59 billion thus far in Q1 FY24. This is in line with the management's guidance of Rs 200 billion of order inflow in FY24 and implies orderbook at the end of Q1 FY24 is likely to be higher compared to Q4 FY23 level of Rs 606.9 billion.
We expect orders for fuses (for long-term requirement of Indian Army) and Naval platforms during the course of FY24. In our view, with its finger in the pie in almost all the upcoming major orders over the next few years, Bharat Electronics is the best play in defence space.
We expect the execution of the recently won orders to commence from FY25, resulting in comfortable bill-to-book position in FY24.
Taking cognisance of robust order inflow as well as book-to-bill position, we raise our price/earnings multiple to 27 times (earlier 25 times), corresponding to 3.5 deviations (earlier three deviations) above the past 10-year mean.
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