BEL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Bharat Electronics Ltd (BEL), a Navratna PSU and a cornerstone of India’s defense electronics sector. I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹7.50 — consistent earnings base

PAT Qtr: ₹969 Cr vs ₹2,105 Cr — sequential dip, but YoY growth of 24.9%

ROE: 29.5%, ROCE: 39.4% — exceptional return metrics

Debt-to-equity: 0.00 — debt-free, pristine balance sheet

Dividend & Cash Flow

Dividend Yield: 0.59% — modest, but consistent

Strong cash flows supported by robust order execution

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 54.6 Slightly overvalued vs industry PE of 75.3

P/B Ratio ~15.2 High premium to book value

PEG Ratio 1.76 Fair — valuation aligns with growth

Intrinsic Value ~₹390–₹405 Trading near fair value

Valuation is reasonable given strong growth, but premium multiples reflect investor confidence in defense sector tailwinds.

🛡️ Business Model & Competitive Edge

Industry: Defense electronics — high entry barriers, long-term contracts

Moat: Strategic supplier to Indian Armed Forces, diversified product portfolio (radar, communication, cybersecurity, missile systems)

Catalysts

₹712 Cr in fresh orders across IT, ESM, blockchain, and communication systems

1

2

Strong order book of ₹78,600 Cr — ~3.3x FY25 revenue

3

Management guidance for ₹27,000 Cr in FY26 inflows

3

FII holdings up (+1.01%) — rising institutional confidence

BEL is riding the wave of India’s defense modernization and digital warfare capabilities.

📉 Technical & Entry Zone

Current Price: ₹410

DMA 50/200: Trading above both — bullish trend

MACD: +5.67 — positive momentum

RSI: 68.2 — nearing overbought zone

📌 Suggested Entry Zone: ₹385–₹400

This range offers a better margin of safety and aligns with DMA and intrinsic value support.

🕰️ Long-Term Holding Guidance

Hold if already invested — fundamentals and order visibility are strong

Buy on dips near ₹395 for long-term compounding

2026 Target Price: ₹460–₹480 based on projected earnings and defense sector expansion

⭐ Fundamental Rating

4.5

1

Business Today | MSN

2

Business Today

3

www.indiatoday.in

Edit in a page