Bharat Electronics: Defence PSU BEL offers 18% upside potential, says Choice Broking

Choice Broking has revised upward its target price on Bharat Electronics Ltd (BL) to Rs 500 from Rs 420 earlier, as it introduced FY28 estimates and based its target on the average of estimated earnings per share (EPS) for FY27 and FY28. The domestic brokerage retained its ‘Buy’ recommendation on the defence PSU stock, valuing it at 40 times earnings multiple. 

The revision reflects continued confidence in BEL’s long-term growth visibility and strong execution capabilities. 
On Thursday, the BEL stock was trading 0.46 per cent higher at Rs 407.60. Choice’s target price suggests 18.48 per cent potential upside over this price.

“We remain optimistic on BEL, given its robust order book stands at Rs 71,650 crore (3x FY25 revenue). We believe the companies order inflow will gain traction due to emergency procurement and speeding up the existing projects. supported by marquee upcoming projects such as the Rs 30,000 crore-plus QRSAM order and the Rs 40,000 crore Project Kusha,” Choice Broking said. 

The company’s diversified pipeline, including NGC subsystems, additional LCA orders, and critical defense systems like LRSAM & radar solutions, positions it well for sustained revenue growth and market leadership, Choice Broking said.

The brokerage said electronic components, parts, and equipment contribute approximately 30-60 per cent of the total cost of defence equipment, depending on the platform type. BEL, it said, holds a strategic position within India’s defense sector, catering to all three branches of the armed forces and serving as a key supplier to major defense companies.

“Additionally, BEL is well-placed within the defense sector, because BHE not solely reliant on order inflows from major defence PSUs. Its diversified portfolio, strong R&D capabilities, and increasing presence in both defense and non-defense sectors enhance its long-term growth potential. The company’s ability to secure independent contracts from other DPSU’s and expand into new technological domains like AI, Cybersecurity, further strengthens its investment appeal,” Choice Broking said.