ICICI Securities: Risks To Bharat Electronics' Guidance
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ICICI Securities Report
Bharat Electronics Ltd. management highlighted potential FY21E topline and order inflow at more than Rs 140 billion and Rs 150 billion respectively.
Order inflow expectations comprise of:
i) Rs 100 billion of probable Akash missile (Army) order to Bharat Dynamics Ltd. will have approximately 60% of order value accruing to Bharat Electronics;
ii) Similarly, approximately Rs 25 billion of Astra missile order to BDL will ensure that 30-40% accrues to Bharat Electronics;
iii) Approximately Rs 370 billion of light combat aircraft Tejas order to Hindustan Aeronautics Ltd. can see approximately Rs 35 billion of order value coming to Bharat Electronics;
iv) Electronic warfare orders, Q1 FY21 witnessed approximately Rs 34 billion of order inflow, of which approximately Rs 12 billion was on account of ventilators and Rs 7 billion was on account of naval orders.
Q1 FY21 execution was impacted by 45-day shutdown leading to a lower than expected print.
Receivables touched approximately Rs 71 billion post Q1 FY21 (from Rs 64 billion QoQ); high receivables can eventually cause execution to slow down.
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