Shares of Bharat Electronics Ltd. (BEL) fell by 3% after reaching a day’s high of Rs 294.60 on 30th September, despite the company announcing that it had received approval from the Ministry of Corporate Affairs (MCA) for the incorporation of a new joint venture, ‘BEL IAI AeroSystems Private Limited,’ in collaboration with Israel Aerospace Industries (IAI).

The company received MCA approval for its joint venture with Israel Aerospace Industries (IAI) on 25th September, 2024.

BEL IAI AeroSystems, a new partnership, aims to provide upkeep and fixing services for the Medium-Range Surface to Air Missile (MRSAM) System. This effort will boost India’s defence tech.

The joint venture between Bharat Electronics and Israel Aerospace is not a related party transaction, as the promoters have no interest in the new entity. However, once formed, it will be considered a related party to BEL.

BEL will need further approvals from the Ministry of Defence in India and the Committee of Ministries for Social & Economic Affairs in Israel to complete and operate the joint venture.

The company’s net profit for the June quarter rose by 46% year-over-year to Rs 776 crore. EBITDA increased by 41% to Rs 937 crore.

The EBITDA margin grew by over 330 basis points to 22.3% from 19% last year. As of 1st July 2024, the company’s order book stood at Rs 76,705 crore.

At 11:05 AM, the shares of Bharat Electronics were trading 2.68% lower at Rs 285.60 on NSE.

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