Company Update : Bharat Electronics Ltd By Motilal Oswal Financial Services Ltd
Better-than-expected performance
* BEL’s results came in ahead of our estimates on EBITDA and PAT levels.
* Its 4QFY25 revenue grew 7% YoY and was broadly in line with our estimate at INR91.2b vs. our estimate of INR88.8b.
* Revenue growth was driven by a strong order book of INR716.5b and an inflow of ~INR194b during FY25 vs. its target of INR250b.
* EBITDA grew 22% YoY to INR27.9b, beating our estimate by 35%, while EBITDA margin expanded 390bp YoY to 30.6% vs. our estimate of 23.3%, mainly due to lower-than-expected other expenses.
* Gross margin contracted 60bp YoY to 47.8% in 4QFY25 vs. our estimate of 45.5%. Margin performance is dependent upon the project mix during the quarter.
* Strong margin performance resulted in a 27%/23% beat to our PBT/PAT estimates.
* PAT stood at INR21.0b, up 18.0% YoY vs. our estimate of INR17.1b.
* For FY25, revenue/EBITDA/PAT grew 17%/35%/32% to INR237b/ INR68b/INR53b.
* OCF for the year stood at INR4.8b, a significant decline vs. the previous year. This was due to a significant increase in net working capital led by higher inventory and receivables and lower other liabilities. Lower OCF and higher capex led to a negative FCF of INR5.2b for the year.
* An interim dividend of IRN1.5 per share was paid for FY25 in Mar’25. A final dividend of INR0.90 per share has been recommended by the Board for FY25.
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