Company Update : Bharat Electronics by Motilal Oswal Financial Services Ltd
Earnings beat driven by margin outperformance
* BEL results came in ahead of our estimates on the EBITDA and PAT levels.
* 1QFY26 revenue grew 5% YoY to INR44.2b, missing our estimate of INR48.4b by 9%.
* Order book stood strong at INR748.6b, with an inflow of ~INR76.3b (+53% YoY) during the quarter.
* Gross margin was ahead of our estimates at 53.2% in 1QFY26 vs our estimate of 45.2%. Margin performance is dependent upon the project mix during the quarter.
* This led to an EBITDA growth of 32% YoY to INR12.4b, beating our estimate by 15%, while EBITDA margin expanded 580bp YoY to 28.1% vs. our estimate of 22.3%.
* Strong margin performance resulted in a 15%/16% beat to our PBT/PAT estimates. PAT stood at INR9.7b, up 25% YoY vs. our estimate of INR8.4b.
* During the quarter, a final dividend of INR0.90 per share for FY25 was recommended by the Board of Directors, in addition to the interim dividend amounting to INR1.5 per share.
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