Bharat Electronics Limited

Industrials — Aerospace & Defense · NSE

₹376.85−₹3.55 (−0.93%)

DalalBaazaar Score

82 / 100

🟢 Strong

Verdict

ATTRACTIVE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, with modest growth. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Bharat Electronics Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Bharat Electronics Limited designs, manufactures, and supplies electronic equipment and systems for the defense and civilian markets in India.

IndustryAerospace & Defense

SectorIndustrials

Employees9,420

Annual revenue₹26,796 Cr

How does it make money?

Turns over ₹26,796 Cr a year. Of every ₹100 of sales, about ₹23 reaches shareholders as profit, with ₹33 left at the operating level before interest, tax and depreciation. Each of its 9,420 employees supports ₹2.84 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin33.2%

Net margin22.6%

Revenue / employee₹2.84 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 31.9%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 25.3% against a peer median of 15.2% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE31.9%

ROE25.3%

Peer median ROE15.2%

What is the outlook?

20 analysts covering the stock expect revenue to grow about 16.4% and earnings to grow about 17.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+16.4%

Est. earnings growth+17.7%

Analysts20

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +54% while net margin moved +32% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+54%

Margin effect+32%

DalalBaazaar Score

82/ 100

Strong

Weighted across six categories. Every point is explained below.

✗ P/E of 44.9x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 54.9x
✗ P/B of 11.48x is a steep premium to book

Quality vs. Valuation

Company Quality

91/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

50/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

44.9x

3Y Median

54.9x

40 monthly readings · mean 54.3x · range 32.6x–77.3x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 18% below its 3y median of 54.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 50% below the peer median of 88.8x.

vs. its own history

Fair

54.9x median over 40 months · -18%

vs. sector peers

Cheap

88.8x median of 3 peers · -50%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

44.9x

P/B

11.48x

EV/EBITDA

30.8x

PEG

1.68

Dividend Yield

0.66%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 25.7% to 33.2% over 3 years.
Return on equity is rising
ROE has improved from 21.5% to 25.3%.
Return on capital is rising
ROCE has improved from 26.4% to 31.9%.
High return on capital employed
ROCE of 31.9% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 83% against revenue growth of 54% — customers are taking longer to pay.

Red Flags

1 item require attention · 1 watch

🟡Receivables growing faster than salesFinancial
Receivables up 83% against revenue up 54% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 31.9% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 25.7% to 33.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 50% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹556 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 83% against revenue up 54%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 15.5% CAGR
Latest reported year was 24.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 31%✓ 33.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹556 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 29%✓ 31.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 2 neutral · 2 weak

Market Cap

₹2.75 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

44.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

11.48x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹8.4

Profitable

Profitable on a per-share basis

ROE

25.3%

Strong

Strong capital efficiency

ROCE

31.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

24.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.3%

Modest

Slow profit growth

Dividend Yield

0.66%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹556 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹376.85

P/E (Forward)

33.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

22.1%

Good

Healthy core-business profitability

Net Margin

21.4%

Good

Strong bottom-line conversion

Current Ratio

1.98

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

384.8 / 397.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

36.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹17,404 Cr	₹19,905 Cr	₹23,117 Cr	₹26,796 Cr	+15.5%
EBITDA	₹4,478 Cr	₹5,870 Cr	₹7,717 Cr	₹8,892 Cr	+25.7%
EBITDA Margin	25.7%	29.5%	33.4%	33.2%	—
PAT (Net Profit)	₹2,984 Cr	₹3,985 Cr	₹5,321 Cr	₹6,062 Cr	+26.6%
EPS	₹4.09	₹5.45	₹7.28	₹8.29	+26.6%
ROE	21.5%	24.4%	26.6%	25.3%	—
ROCE	26.4%	30.1%	33.7%	31.9%	—
Total Debt	₹61 Cr	₹63 Cr	₹61 Cr	₹65 Cr	+2.2%
Free Cash Flow	₹609 Cr	₹4,007 Cr	-₹447 Cr	₹556 Cr	-3.0%

🟢 Revenue has grown at 15.5% a year over 3 years.

🟢 EBITDA has grown at 25.7% a year over 3 years.

🟢 EBITDA Margin has risen from 25.7% to 33.2% over 3 years (+7.5 pts).

🟢 PAT (Net Profit) has grown at 26.6% a year over 3 years.

🟢 EPS has grown at 26.6% a year over 3 years.

🟢 ROE has risen from 21.5% to 25.3% over 3 years (+3.7 pts).

🟢 ROCE has risen from 26.4% to 31.9% over 3 years (+5.5 pts).

🔴 Total Debt has grown at 2.2% a year over 3 years.

🔴 Free Cash Flow has shrunk at 3.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹44,538 Cr

Total Liabilities

₹20,530 Cr

Total Debt

₹65 Cr

Cash & Equivalents

₹1,888 Cr

Operating Cash Flow

₹1,541 Cr

Capex

-₹985 Cr

Shareholding (proxy)

Institutional Holding

28.5%

Insider Holding

53.4%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹2.5

Ex-Dividend Date

13 Aug 2026

Analyst Consensus

Recommendations

31 Buy · 0 Hold · 1 Sell

Target Price (Mean)

₹489.97

+30.0% vs CMP

Target Range

₹328 – ₹550

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

2 positive1 mixed3 general

Zero-Debt Defence PSU Stock BEL Falls Despite Rs 1,081 Crore Orders Win; Buy-On-Dips For Rs 530 Target

Goodreturns, 16 Oct

Bharat Electronics shares rise as firm bags order worth ₹533 crore; check details

Upstox, 13 OctOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

BEL Q2 results 2026 date out | Market sees up to 16% YoY revenue growth, defence order may drop — share outlook in focus

Livemint, 17 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Defence stocks: Bharat Electronics is Motilal Oswal's top pick as Rs 13 lakh crore approvals boost order...

Moneycontrol.com, 05 Oct

Only Four Days Left To Cash In On Bharat Electronics' (NSE:BEL) Dividend

Simply Wall Street, 08 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Is Bharat Electronics the Best Stock in Its Sector? A Look at the Numbers

Univest, 12 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong17.9/20

🟢Financial HealthStrong17.8/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong13.5/15

🔴ValuationDemanding5.3/15

🟢RiskLow8.5/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

This thesis breaks if

✓Revenue growth stays above 12% a year15.5% CAGR
✓EBITDA margin holds above 31%33.2%
✓Free cash flow remains positive₹556 Cr
✓Debt / EBITDA stays below 2x0.0x
✓ROCE stays above 29%31.9%