Jefferies BEL: Jefferies, a financial firm, has kept its “buy” recommendation for Bharat Electronics Ltd. (BEL), saying the company is in a good position to grow. They set a target price of Rs 325 per share, which is higher than the average price over the last 10 years. Jefferies believes BEL is worth more because its future earnings look strong. Recently, BEL got a new order worth Rs 5.8 billion and needs to secure another Rs 113 billion by March-April to meet its goal of Rs 250 billion for the fiscal year 2025.
According to NDTV Profit, during a call about its third-quarter performance, BEL’s management said they are confident they will meet their 2025 target, even though they have only achieved 39% of it so far. Jefferies pointed out that BEL has a history of meeting its goals, which makes them trust the company’s plans.
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The stock price has been affected by slow ordering and changes in the sector. Jefferies said, “We believe order announcements in March-April are a key near-term trigger. The medium-term story of indigenisation remains in place.”
Around the world, defence stocks have been rising because European countries are planning to spend more on defence. This comes after US President Donald Trump stopped military aid to Ukraine. In India, defence spending has been lower than expected, dropping 4% compared to last year, even though the government planned to increase it by 3%. Jefferies mentioned that BEL is less affected by higher imports of aircraft compared to other companies like Hindustan Aeronautics, which could face more challenges.
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Jefferies also said BEL is priced attractively compared to other major Indian industrial companies. BEL operates in a special area with clear growth potential in the coming years. As new orders come in and earnings improve, the stock price is expected to rise. There are some risks, such as a slowdown in India’s push for making defence equipment locally and difficulties in controlling costs.
