Bharat Electronics’ FY21E Revenue Guidance At Risk: ICICI Securities
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ICICI Securities Report
Bharat Electronics Ltd.’s lower than expected execution in Q3 FY21 (1.1% YoY standalone revenue growth) will test FY21E revenue guidance.
Higher than expected margin performance (360 basis points QoQ increase in gross margins) allowed standalone Ebitda to increase 24.1% YoY.
Core nine month FY21 Ebitda margins (excluding other operating income) also witnessed approximately 110 basis points increase YoY.
Ebitda margin guidance of 20 plus/down 1%, even without any favourable policy review of cost-plus margins in nominated orders, looks achievable.
Strategy to diversify revenue streams away from a constrained domestic defence budget will be key to achieve double-digit revenue growth.
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