Bharat Electronics - Set For Best Play In Defence Sector: HDFC Securities Retail Research Initiates Coverage
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HDFC Securities Retail Research Report
Bharat Electronics Ltd. is India’s leading player in defence electronics sector. It has 55% market share.
BEL bagged orders worth Rs 2,700 crore in Q1FY22, led primarily by order for indigenous products segments as Electronics Voting Machine and Electric Vehicles pack, Oxygen concentrators and Dhanush Weapon systems.
As of Q1FY22, BEL has a robust order book of Rs. 54,600 crore.
The recent initiatives by the Government, like “Make in India” and “Atmanirbhar Bharat” and new DPPEP -2020, provides humungous opportunities for the company. Reliance on imports for the defense sector would gradually reduce and in turn help the company garner higher revenues.
BEL has competitive advantage due to its strong in-house capabilities, joint R&D focus with DRDO (Defence Research & Development Organisation) and preference it gets for orders, as it is a defence PSU. BEL has also been exploring opportunities for growth in allied defense and non-defense areas. Share of non-defense revenues in FY21 was 22% of total revenues.
We believe Government efforts towards being “vocal for local”, coupled with the recent embargo on import of 101 + 108 defence items, provides company a better growth opportunity going forward.
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