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View and valuation: BEL is well positioned to gain from the growing list of Indigenization procurement and winning new order on defense electronics such as high end electronics related to defence, industrial and various civil projects. Despite trading at rich valuation, we continue to maintain our positive stance on the BEL due to its position as the sole supplier of various equipment and systems and ongoing innovation in diverse products from tri forces. We have a positive outlook on BEL, supported by- 1. BEL is the direct beneficiaries of GOI’s self reliance on defense sector, 2. Rising defense spending across all segment ( Navy, Army, Air Force), 3.Diversified business opportunities like Defence, Civil aerospace, Railway, etc. 4.Focusing on system level integration, and strong order book. We maintain our rating “ADD” with a TP of Rs.346 valuing it on (45x of FY26E EPS). Assigning a higher multiple on account of promising domestic defence manufacturing opportunities and increasing gamut of ToT.

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