Highlights
- BEL Q2 profit seen rising 7.4%, revenue 15%.
- EBITDA margin expected to contract nearly 180 basis points.
- Rs 55,000 crore order inflow guidance in focus.
Bharat Electronics Q2 Results FY27 Preview: Defence stock Bharat Electronics Limited (BEL), a Navratna public sector undertaking under the Ministry of Defence, is expected to report double-digit revenue growth for the July-September quarter of financial year 2026-27. However, profit growth may remain relatively subdued, while operating margins are projected to contract on a year-on-year basis.
According to an ET Now Research consensus poll, the state-owned defence electronics manufacturer’s net profit is expected to rise 7.4 per cent year-on-year to Rs 1,382 crore in Q2 FY27, compared with Rs 1,287 crore in the corresponding quarter last year. Revenue is projected to increase 15 per cent to Rs 6,673 crore from Rs 5,792 crore in the year-ago period.
According to the consensus estimates, Bharat Electronics’ earnings before interest, taxes, depreciation and amortisation (EBITDA) are expected to increase 8.2 per cent year-on-year to Rs 1,842 crore from Rs 1,702 crore.
However, EBITDA margin is projected to decline to 27.6 per cent from 29.4 per cent a year earlier, representing a contraction of approximately 180 basis points.
The estimates indicate that operating profit and net profit growth could lag revenue growth during the quarter.
On a sequential basis, revenue is expected to grow approximately 20 per cent. However, year-on-year revenue growth is projected to moderate from 24.9 per cent in Q1 FY27 to approximately 15.2 per cent in Q2 FY27.
Bharat Electronics order book: Fresh defence contracts in focus
Bharat Electronics had an order book of Rs 72,258 crore as of July 1.
The company announced fresh orders worth Rs 1,011 crore on October 21. It also announced three additional orders during the September quarter, although their values were not disclosed.
Other approvals included Counter-Unmanned Aircraft Systems (C-UAS) worth Rs 3,000 crore, Integrated Surveillance and Sighting Systems (ISSS) worth Rs 3,000 crore and Air Defence Operations and Display Systems (AODS) worth Rs 1,350 crore.
Investors will closely track BEL’s potential participation in these programmes and the timeline for converting approvals into orders.
Bharat Electronics FY27 guidance
During its earlier earnings call, Bharat Electronics guided for revenue growth of 15 per cent in FY27 and an EBITDA margin of approximately 28 per cent for the full financial year.
The defence PSU also projected order inflows exceeding Rs 55,000 crore, including the anticipated Quick Reaction Surface-to-Air Missile (QRSAM) order.
Additionally, BEL guided for exports of approximately USD 300 million and research and development expenditure exceeding Rs 2,200 crore.
Bharat Electronics Q2 Results: What should investors watch?
QRSAM order timing: One of the biggest factors to monitor will be whether the anticipated QRSAM order materialises during the second half of FY27.
Order inflow momentum: Investors will assess whether the pace of fresh orders is sufficient to meet management’s annual target.
Margin recovery: With the company reporting an EBITDA margin of 25 per cent in Q1, its ability to improve profitability during the remaining quarters will be important.
Defence project execution: Management commentary on BEL’s share of the recently approved MRSAM, C-UAS and AODS programmes, along with execution timelines, will be closely monitored.
Exports and full-year outlook: Investors will look for updates on overseas orders and whether the company maintains its revenue, profitability and export guidance for FY27.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)