Brokerage firm Nomura has raised its target price for Bharat Electronics to Rs 520, citing a strong defense order pipeline. The company recently reported a 19.7% jump in second-quarter profit, supported by robust revenue growth. Investors are now watching for the final approval of large-value contracts like the QRSAM project to sustain this momentum.
Nomura has updated its outlook on defense major Bharat Electronics, setting a target price of Rs 520. This move follows confidence from analysts in the company's ability to secure large defense contracts, which are expected to support revenue growth for years to come. The brokerage's positive view is built on a strong order book and the company's consistent ability to win business in competitive defense segments.
As of the start of October 2026, the company’s order book stood at approximately Rs 68,717 crore. A major focus for the market is the pending clearance of the Quick Reaction Surface-to-Air Missile (QRSAM) project. This contract, estimated at around Rs 30,000 crore, is seen as a key catalyst for future order inflows. Along with other potential projects like electronic warfare systems and naval equipment, the company is positioning itself to maintain a steady flow of work.
The company’s recent financial results also provide context for this optimism. In the second quarter of the current fiscal year, Bharat Electronics reported a consolidated net profit of Rs 1,540.37 crore, marking a 19.7% increase compared to the same period last year. Revenue for the same quarter rose 26.5% to Rs 7,327.72 crore. Management has reaffirmed its guidance for 15% to 20% revenue growth for the full year, while maintaining EBITDA margins near 28%. These figures suggest that the company is effectively managing its current operations.
Despite the positive outlook, investors should be aware of certain risks. The most immediate challenge is the uncertainty regarding the timeline for the large-value QRSAM contract. Any further delay in government approvals could affect the company's short-term order inflow targets. Additionally, the defense sector often faces pressure on profit margins due to rising raw material costs and the need for competitive bidding in large programs. The company’s high working capital requirements, which can tie up cash for extended periods, remain another factor that market observers track closely.
Moving forward, the primary monitorable for shareholders will be the actual awarding of these major defense contracts and the company’s success in executing them on time. Investors will also look for management commentary in future filings to see if the targeted revenue growth and margin stability remain on track, especially as the company continues to focus on local manufacturing and indigenization of defense products.