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    Bharat Electron

    BELGood
    Capital Goods·31 Oct 2025
    Management Summary

    BEL posted strong H1 FY26 with 15.9% revenue growth and 30.2% EBITDA margins. Q2 standalone showed an impressive 26% revenue growth compensating for the weak Q1. QRSAM remains on track with RFP response already submitted. Management reiterated all guidance parameters including INR 57,000 crores total order inflow (incl QRSAM). Key new information included Kusha production order expected by December 2029, QRSAM execution timeline of 5-6 years, and INR 1,400 crore DSIC facility in Andhra Pradesh.

    Highlights

    8

    • H1 FY26 revenue at INR 10,180 crores, up 15.92% YoY from INR 8,782 crores

    • H1 PBT grew 21.5% YoY to INR 3,023 crores from INR 2,488 crores

    • H1 PAT grew 20.77% YoY to INR 2,255 crores from INR 1,867 crores

    • EBITDA margin at 30.15% vs 27.26% YoY for H1

    • Order book at INR 74,453 crores (Oct 1) growing to INR 75,600 crores by Oct 31

    • Order inflow of INR 14,750 crores YTD (Oct 31); targeting INR 27,000+ crores excl QRSAM

    • QRSAM RFP response submitted; order expected before March 2026 worth INR 30,000 crores

    • 11 emergency procurement orders worth INR 1,350 crores received; INR 2,000 crores more in pipeline

    What Changed1

    vs Q3 FY26

    Guidance items8 → 6 (-2)
    Key financials

    Metrics

    9

    Periods

    2

    Headline

    4
    • Order Book (Oct 1)
      ₹74,453 Cr
    • Order Inflow YTD (Oct 31)
      ₹14,750 Cr
    • EP Orders Received
      ₹1,350 Cr
    • Export Order Book
      326 Mn

    H1

    5
    • Revenue
      ₹10,180 Cr
      YoY+15.9%
    • PBT
      ₹3,023 Cr
      YoY+21.5%
    • PAT
      ₹2,255 Cr
      YoY+20.8%
    • EBITDA Margin
      30.1%
    • EPS
      ₹3.09
      YoY+21.2%

    Segment breakdown

    Defense
    90% Revenue Share
    Non-Defense
    10% Revenue Share
    Top Order Book (Oct 1)
    ₹5,000 Cr LRSAM₹4,500 Cr Fuses₹3,000 Cr BMP-2 Upgrade₹2,700 Cr Akash Army
    List

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue Growth
    Revenue growth FY26
    15%+
    		High
    Profitability
    EBITDA Margin FY26
    27%+
    		High
    Order Inflow
    Total Order Inflow FY26 (incl QRSAM)
    INR 57,000 crores
    		High
    Order Pipeline
    NGC Subsystem Orders FY26
    INR 4,500 crores
    		Medium
    Order Pipeline
    Project Kusha Production Order
    More than QRSAM (>INR 30,000 crores)
    		Low
    Order Pipeline
    LCA 97 Avionics Order
    INR 2,500 crores +/-
    		High

    Risks & concerns

    6
    RiskSeverity

    QRSAM will not contribute to revenue for 12-18 months after order receipt

    FoPM phase takes 12-18 months plus 3+ months evaluation. Next year, no turnover expected from QRSAM. Full execution 5-6 years. — Management acknowledged

    medium

    Order book flat for 18 months at ~INR 74,000-75,000 crores despite 15%+ revenue growth

    Order book hasn't grown as revenue has accelerated. QRSAM is key to breaking this stagnation. Without mega-orders, book-to-bill below 1.0 — Analyst downplayed

    medium

    NGC subsystem orders further reduced to INR 4,500 crores this year

    Down from INR 14,000-15,000 crores (Q3 FY25) to INR 6,000-10,000 (Q4 FY25) to INR 4,500 crores this year. Remaining INR 8,000-10,000 crores pushed to next year — Management acknowledged

    low

    4th PRC wage revision from Jan 2027 - quantum uncertain

    Committee not yet constituted. Only 3 months impact in FY27. CMD hinted 10-15% salary increase expectation. Volume growth expected to absorb — Analyst downplayed

    low

    INR 1,400 crore DSIC capex in Andhra Pradesh over 3-4 years

    Large facility for QRSAM and other programs. Committed to Raksha Mantri. Could expand further for Kusha. Strategic investment but manageable given cash flows — Management acknowledged

    low

    Areas of Evasion(1)

    • Myanmar export exposure deflected to general exports commentary

    Q&A highlights

    3

    “overall program schedule will be around 5 to 6 years... next year, we are not expecting any turnover or business from the QRSAM program. Next to next year only.”

    Critical for financial modeling - QRSAM won't contribute to revenue for 12-18 months post-order receipt, with full 5-6 year execution cycle. Army and Air Force production in parallel.

    asked by Amit Anwani

    2 min read5 chapters

    Detailed Narrative

    01

    Strong H1 Performance with Q2 Compensating Q1 Weakness

    H1 FY26 revenue grew 15.9% to INR 10,180 crores with Q2 standalone showing 26% growth, compensating for the 5.2% Q1. EBITDA margin expanded to 30.15% from 27.26% YoY driven by favorable product mix with higher in-house content. PAT grew 20.8% to INR 2,255 crores. Top 7 executing programs contributed ~INR 4,000 crores in H1: LRSAM, HimShakti, BSS, Akash Army, LCA LRUs, Lynx U2, and Shakti EW.

    02

    QRSAM Progress: RFP Responded, Order Expected Q4 FY26

    QRSAM achieved key milestones: DAC approval (July 3) and RFP response submitted. Cost audit and procedural activities underway. Management confident of order before March 2026. The ~INR 30,000 crore order combines Army and Air Force requirements with parallel production planned. FoPM will take 12-18 months post-order, meaning no revenue contribution in FY27. Total execution 5-6 years. New DSIC facility in Andhra Pradesh (INR 1,400 crores, 920 acres) being built primarily for QRSAM.

    03

    Mega Pipeline Beyond QRSAM: Kusha at INR 30,000+ Crores by Dec 2029

    Project Kusha production order now targeted for December 2029, expected to be larger than QRSAM (>INR 30,000 crores). Prototype development has 1 more year, followed by integration, testing, and trials. BEL developing 5 major modules: 3 types of radars and 2 control/communication centers. From 3 rounds of AON approvals totaling INR 1.7 lakh crores, BEL expects INR 50,000+ crores of orders including QRSAM.

    04

    Emergency Procurement Materializing Steadily

    11 EP orders worth INR 1,350 crores already received with INR 2,000 crores more in pipeline where CMCs are concluded, expected within 2 weeks. All EP orders included within the INR 27,000 crore non-QRSAM order inflow guidance. Order inflow YTD at INR 14,750 crores (Oct 31) with INR 12,250 crores more needed to hit the INR 27,000 crore target.

    05

    Strategic Expansion into Platform-Level Integration

    BEL partnered with L&T for AMCA (5th gen fighter) RFI, seeking to move from subsystem supplier to system integrator role. Near-term capex only INR 100-200 crores for first 5-8 years of prototype phase. Even if another consortium wins AMCA, BEL's electronics modules will still be needed. Also pursuing MALE UAV program and Archer-NG. Export order book at USD 326 million with 10% of turnover target over medium term⏳.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.