Mixed 1Q as sales beat offset margin drag: PAT estimates unchanged (FY26-29F CAGR at 15%); maintain Neutral with an unchanged TP of INR454

Research evidence excerpt

Mixed 1Q as sales beat offset margin drag: PAT estimates unchanged (FY26-29F CAGR at 15%); maintain Neutral with an unchanged TP of INR454

27E. Furthermore, according to management, NGC and

P75I orders are also awaiting CCS approvals and it expects to book at least one of those in FY27E.

Emerging opportunities and indigenisation are key focus areas for BEL

Source: LSEG, NomuraBEL remains committed to capitalizing on new opportunities. While BEL could not emerge as the L-1

bidder for the system integrator role in the Netra 2 project, its subsystem level capabilities will still be used

in the project. Further, exponential growth in emerging segments such as drones and counter-drones is Research Analysts

creating ample opportunities which BEL aims to tap into by focusing more on complex systems. Further, India Capital Goods

BEL’s continuous focus on indigenisation is likely to make its margin sustainable by providing a strong Umesh Raut - NFASL

hedge against material cost escalations, according to management. umesh.raut@nomura.com

Trading at 44x/38x FY27F/28F EPS; maintain Neutral with an unchanged TP of INR454 +91 22 403 74035

Management maintains its FY27E revenue growth/EBITDA margin guidance of 15%+/28%+. Our Aritra Banerjee - NFASL

estimates are unchanged as we expect revenue growth and EBITDA margin to normalize over the coming aritra.banerjee@nomura.com

+91 22 672 34609quarters. We reaffirm our Neutral rating with an unchanged TP of INR454, at 42x FY28F EPS. HNAL

(HNAL IN, Buy) remains our preferred pick in the defence sector.

Year-end 31 Mar FY26 FY27F FY28F FY29F

Currency (INR) Actual Old New Old New Old New

Revenue (mn) 274,796 308,598 308,598 355,729 355,729 409,734 409,734

Reported net profit (mn) 60,485 68,011 68,011 78,953 78,953 91,800 91,800