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  • 28 Jul 2023
  • ICICI Securities

Q1FY24 PERFORMANCE WAS LARGELY IN-LINE WITH EXPECTATIONS

BEL - 407 Change: -2.00 (-0.49 %)

News: Revenue increased by 13.5% YoY to Rs 3532.9 crore in Q1FY24. Sequentially the revenue was down 45.3% as execution remains better in Q4FY24. Gross margin improved 176 bps YoY to 43.7% during the quarter. EBITDA margin improved by 254 bps YoY to 19%, leading to EBITDA growth of 31% YoY to Rs 672.5 crore. Sequentially, EBITDA margin declined 923 bps primarily on account of negative operating leverage. PAT was up 22.5% YoY (61.3% QoQ down) to Rs 528.6 crore.

Views: Overall performance was largely in-line with expectations. The order book stands at Rs 65356 crore as of June 2023 end (3.7x FY23 revenue), provides strong revenue visibility. The orders inflow remained healthy at ~Rs 8200 crore in Q1FY24 led by large scale order of Akash weapon system and other orders of defence electronic systems, received during the quarter. Going ahead, there is a strong order pipeline for BEL in defence electronics led by increasing usage of electronic systems like electronic warfare, radars, communication systems in defence platforms. Moreover, company’s strategy of diversifying into non-defence electronics, where opportunities are there for scalability in long-term, shows strong prospects.

Impact: Positive