BEL Shares Upbeat After 47% Jump In Q1 Profit: Buy, Sell Or Hold?

BEL‘s share price was upbeat on Tuesday morning after the street was seemingly impressed by the company’s performance during the April-June quarter.

What Happened: The defence major’s consolidated net profit for the June quarter stood at ₹791 crore, up 47% from ₹538 crore in the same quarter last year. Revenue from operations increased 20% to ₹4,243 crore, compared with ₹3,532 crore in the corresponding quarter of the previous year. The company’s order book position stood at ₹76,705 crore, as of July 1.

Brokerage Reactions: Jefferies maintained its “buy” rating on BEL, raising the target price to ₹370 from ₹305. The firm highlights BEL’s stellar results and notes that the robust provides visibility for revenue from FY24 to FY27. Jefferies also emphasises that the 15% year-on-year revenue growth guidance has been maintained.

Motilal Oswal also reiterated its “buy” rating for the stock with an unchanged target price of ₹360. The analysts said that the defence public sector firm’s results came ahead of its estimates, driven by better-than-expected revenue and profit after tax.

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Antique Broking also maintained its “buy” rating for the stock and raised the price target by 12% to ₹381. The analysts said that BEL reported strong operational performance, with revenue marginally surpassing its estimate while delivering a strong beat on the profitability front.

UBS, on the other hand, downgraded the stock’s rating to “neutral” from “buy”, while slightly increasing the target price to ₹340 from ₹333. The research firm believes that most positives have already been factored in, leaving little room for a positive surprise. Despite the downgrade, UBS remains directionally constructive on BEL’s earnings and order book growth. The management’s guidance of a 15% top-line growth and a ₹25,000 crore order run rate appears fairly achievable, according to UBS.

Nuvama maintained its “hold” rating on the defence contractor but raised the target price to ₹304 from ₹270. The analysts noted that BEL beat street estimates on EBITDA and profit after tax by 15% and 17%, respectively, led by improved execution.

Kotak Securities maintained its “sell” rating for the stock but raised the fair value target to ₹200 from ₹170. The brokerage said that BEL reported results 14% ahead of its expectations, as stronger-than-expected topline growth was aided by higher other income.

Price Action: BEL’s share price was up 0.62% to trade at ₹323.35 as the markets opened on Tuesday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.