Bharat Electronics (BEL), a leading aerospace and defence electronics company, had its performance impacted by supply chain disruptions in Q1FY22, says ICICIdirect in its results update report.
However, the broking firm remains long term positive and retain our BUY rating on the stock. The report says, "We value BEL at Rs. 205 i.e. 19x P/E on FY23E EPS." The report says that BEL reported subdued Q1FY22 results amid supply disruptions. It highlights the following points of the quarterly results:
- Revenue at Rs. 1634.6 crore, down 2.2% YoY amid pandemic restriction
- EBITDA came in at | 62.9 crore, down 57.1% YoY, due to lesser revenue booking and supply chain disruptions.
- Consequently, PAT came in at Rs. 11.2 crore, down 79.4% YoY
Order inflows for Q1FY22 came in at ~Rs. 2619 crore, down ~23.4% YoY
The report has mentioned the following key triggers for future price performance of BEL:
- Strategy to diversify into non-defence areas, focus on increasing exports and services share would aid long term growth and help de-risk its business
- Strong order inflow guidance of Rs. 15,000 to Rs. 17,000 crore for FY22E
- We expect revenue, EBITDA to grow at CAGR of ~13.9%, 10.3% in FY21-23E aided by sustained margins in the range of 20-22%
- Strong balance sheet, double digit returns ratios
(Share Manthan, August 10, 2021)
Add comment