Shares of Bharat Electronics Ltd (BEL) rose 2% on March 24 in reaction to the company’s new order win.

“The Ministry of Defense (MoD) has awarded two contracts worth Rs 3,800 crore to Bharat Electronics Ltd (BEL), a DPSU for the supply of medium power radars and digital radar warning receivers (RWR) to the Indian Air Force,” the company said in a regulatory filing.

A news report said that the first contract worth more than Rs 2,800 crore is for the supply of medium power radar “Arudhra”, and the second contract with a total cost of about Rs 950 crore is for 129 DR-118 radar warning receivers. It added that both projects fall under the “Buy IndianIDMM (Indigenous Design Development and Manufacturing)” category.

Shares of the company were trading at Rs 93.05 on the BSE at 9:26 am. The stock has risen over 360% over the past three years but is down 8% year-to-date.

According to some analysts, BEL in the defence PSU space has experienced a reasonable price and timing correction, making the risk-reward favourable.

According to ICICI Direct Research, “We expect the stock to resume its uptrend in the next few weeks and head towards Rs 110, which is 80% of the full fall in September 2022-January 2023 (Rs 114-87)”.

Although the order inflow in the first nine months of FY23 was only Rs 3,736 crore, management reiterated its FY23 order inflow guidance of Rs 20,000 crore. ICICI Direct Research said the expected major orders include:

• The Himshakti programme is worth Rs 3,300 crore.
• The Atulya medium power radar is worth Rs 2000-3000 crore.
• Radar and sonar orders worth around Rs 10,000 crore.

BEL is an aerospace and defence electronics company. It has a multi-product, multi-technology diversified product line, including radar, missile systems, electronic warfare and avionics, anti-submarine warfare, optoelectronics, homeland security, civilian products, etc. BEL is focused on increasing non-defence to a share of around 20-25% in two to three years.

The domestic brokerage believes BEL’s strategy of diversifying into non-defence sectors and increasing its share of exports and services will contribute to long-term growth and help de-risk its business.