Bharat Electronics Q4 Review - Strong Execution, Outlook Robust With A Healthy Order Book: Motilal Oswal
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Motilal Oswal Report
Bharat Electronics Ltd.’s Q4 FY21 earnings were 39% above our estimate, with the surprise entirely led by higher than expected Ebitda margin (28.5% versus our estimate of 21.3%).
The Ebitda margin expansion was largely attributable to lower employee costs (down 17% YoY), other expenses (down 10% YoY) and higher domestic outsourcing by the company.
Margin depends on the sales mix between deliverables and hence tends to be volatile on a quarterly basis.
The company’s current order book is strong at Rs 534 billion, with an order book/revenue ratio of 3.9 times.
The company raised its margin guidance to 21-22% from 18-19% in FY22.
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