Shares of Bharat Electronics have been at the forefront of the rally in defence names, with the stock scaling an all-time high of Rs 373.50 on May 19. The relentless buying action in the counter has been fired up by the company’s latest order wins, along with expectations of improved order books and a strong Q4 earnings performance.
Since early April, the company has bagged orders worth a total of Rs 572 crore, including those for Integrated Drone Detection and Interdiction Systems (IDDIS), Software Defined Radios (SDRs), and data communication units for attack guns.
The company also secured contracts for artificial intelligence-based naval solutions, simulators, jammers, communication equipment, spares, and related services. These additions come at a time when defence spending is accelerating amid heightened geopolitical tensions.
Meanwhile, even though the government’s spending on defence modernisation and indigenisation has held steady, the recent geopolitical tensions have brought renewed focus to the sector’s long-term growth potential. That has in turn sparked hopes of improving order books for these defence majors in the coming times.
Aside from that, the company also posted a 30% on year growth in its Q4 net profit at Rs 1,797 crore for the March quarter, aided by a 32% rise in revenue to Rs 8,564 crore. The solid Q4 earnings for Bharat Electronics have furthered bolstered sentiment over the company being well positioned to ride on the defence wave. The company's order book stood at Rs 76,000 crore as of April 1, reflecting a 25.2% increase from the previous fiscal.
Bharat Electronics’ rally has also played a major role in lifting the broader defence pack. The Nifty India Defence index has gained over 12% in the past three weeks, with the sector adding Rs 1.17 lakh crore in market capitalisation. Bharat Electronics alone has contributed nearly Rs 30,000 crore to that spike.
