- 18 Jul 2022
- ICICIdirect Research
Bharat Electronics reports strong performance led by better executionBEL - 92 Change: 0.70 (0.76 %)
News: Q1FY23 revenue grew 90.4% YoY to Rs 3112.8 crore on the back of lower base and some revenue spillover from Q4FY22 (that was impacted due to chip supply disruption). EBITDA margin improved by 1265 bps to 16.5% (Q1FY22 margin impacted due to high fixed costs as percentage of sales). Subsequently, EBITDA increased sharply by 8.2x YoY to Rs 513.5 crore. PAT increased substantially to Rs 431.5 crore from Rs 11.2 crore in Q1FY22.
Views: Q1FY23 performance was better than our expectations likely due to better than expected execution and higher than expected revenue spillover from Q4FY22. EBITDA margin was slightly better than our estimate. However, EBITDA and PAT were also better than expectations on the back of higher-than-expected revenues. Going forward, we believe that, with the healthy order book at Rs 55,333 crore (~3.3x TTM revenues), strong pipeline of orders (in both defence & non-defence areas) and better margin profile, BEL is well placed to grow its earnings in double digits in the next couple of years.