Government company Bharat Electronics Limited (BEL) has expected a growth of 12 to 15 percent in its revenue during the current financial year. However, this is less than the earlier target of 15 to 17 per cent. In a recent meeting of the company and analysts, the company said that it has an order of Rs 180 billion in the pipeline.
The promotion of indigenization in defense production by the government can increase the company’s margins. The company says that its civil works revenue can also increase from 15 percent to 25 percent. In view of all these aspects of the company’s functioning, brokerage firm Jefferies has increased the target price of its share from Rs 225 to Rs 244. The firm has given it a BUY rating.
The company is also providing test facilities for private vendors.
The company is benefiting from the promotion of ‘Make in India’ program by the government. The company management says that 692 items have been uploaded on the indigenization portal of the Ministry of Defense. The company is also participating in manufacturing along with providing test facilities for private vendors. The company is expecting its revenue to grow by 13 per cent in the defense budget compared to the increase in single digital. The company says that its focus is on domestic manufacturing. This will benefit him.
The company has an order book of Rs 558 billion.
The company has an order book of Rs 558 billion. So far this year, orders worth Rs 53 billion have been received. The order book has grown by 2 per cent as compared to the first quarter of FY 2021-22. In the financial year 2021-22, orders of 80 to 100 billion rupees can be received from the Air Force, 40 to 50 billion rupees from the Army and 30 to 40 billion rupees from the Navy. The company’s non-defense order of Rs 30 to 40 billion can also increase.
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BEL has a lot of work even in the civil sector
Medical equipment manufacturing, homeland security, automatic tolling gates of railways and smart cities are the focus areas of BEL. For this, capex of 300 to 500 billion rupees will be required, which can also go up. The company has also received a trial order from Delhi Metro, which can turn into a large order. In view of the increasing order with the company, Jefferies has increased the target price of BEL’s share to Rs 244.
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