Bharat Electronics Shares Gain Analyst Favor After Strong Q2 Results; Buy Ratings Maintained

Navratna defence firm Bharat Electronics (BEL) has reported impressive financial results for the second quarter of FY26, exceeding market expectations. The company announced an 18% year-on-year increase in net profit, reaching ₹1,286 crore, compared to ₹1,088 crore in the same period last year. Revenue also saw significant growth, up 26% Y-o-Y to ₹5,764 crore from ₹4,583 crore. Earnings Before Interest, Taxes, Depreciation, and Amortization (Ebitda) grew by 22% Y-o-Y to ₹1,695.6 crore.

Following these strong numbers, two prominent brokerages, Nuvama Institutional Equities and Choice Institutional Equities, have maintained their 'Buy' recommendations for BEL. Nuvama highlighted consistent margin outperformance and strong order accretion driven by higher localization, favourable product mix, and operational efficiencies. They raised their Earnings Per Share (EPS) estimates for FY26-28 and increased the target price to ₹520 from ₹465.

Choice Institutional Equities also reiterated a 'Buy' rating with a target price of ₹500, emphasizing BEL's strong execution, margin discipline, and technological edge positioning it for multi-year growth. The brokerage noted BEL's robust order book of ₹75,600 crore and its strategic focus on system integration and advanced defence electronics.

Impact: This news is highly positive for Bharat Electronics and the Indian defence sector, reinforcing investor confidence. The strong financial performance and optimistic brokerage outlook could lead to upward price movement in the stock. The company's focus on R&D, localization, and securing large orders from a ₹1.1 trillion pipeline, including the potential ₹30,000 crore QRSAM order, are key catalysts.

Difficult terms: Navratna: A status awarded to highly performing state-owned enterprises in India. Q2 FY26: The second quarter of the financial year 2025-2026. Ebitda: Earnings Before Interest, Taxes, Depreciation, and Amortization; a measure of a company's operational profitability. Y-o-Y: Year-on-Year, comparing performance from one year to the same period in the previous year. EPS: Earnings Per Share, a company's profit allocated to each outstanding share of common stock. Localisation content: The extent to which components or services are sourced or manufactured domestically. Order accretion: The addition of new orders to a company's existing order backlog. Capex: Capital Expenditure, investment made by a company in its fixed assets or long-term assets. Backlog: The total value of confirmed orders that a company has received but not yet fulfilled. LRSAM: Long Range Surface-to-Air Missile. QRSAM: Quick Reaction Surface-to-Air Missile. DAC: Defence Acquisition Council, a body that approves defence procurement. System integration: The process of combining different hardware and software components into a single, unified system. R&D: Research and Development, activities focused on innovation and technological advancement. AI: Artificial Intelligence. EW: Electronic Warfare. UAVs: Unmanned Aerial Vehicles (drones). Cybersecurity: The protection of computer systems and networks from digital attacks.