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    Bharat Electronics Q3 FY26 earnings call

    BELGood
    Capital Goods·28 Jan 2026
    Management Summary

    BEL delivered strong 9M FY26 results with 19% revenue growth and 30% EBITDA margin, well above the 15% and 27% guidance. QRSAM remains on track with >90% confidence for Q4 FY26 order receipt. NGC orders of INR 2,000-3,000 crores expected this quarter with remaining INR 10,000-12,000 crores in H1 FY27. Provision write-back of INR 256 crores supported Q3 margins. R&D spend being increased to INR 1,700+ crores this year and INR 2,000+ crores next year, with 20%+ annual growth committed.

    Highlights

    8

    • 9M FY26 revenue at INR 17,302 crores, up 19% YoY from INR 14,538 crores

    • 9M PBT grew 22% YoY to INR 5,171 crores from INR 4,242 crores

    • 9M PAT grew 21% YoY to INR 3,845 crores from INR 3,183 crores

    • EBITDA margin at 30% for 9M vs 28% YoY, though FY26 guidance maintained at 27%

    • EPS at INR 5.26 vs INR 4.36 YoY for 9M period

    • Order book at INR 73,015 crores (Jan 1), INR 73,450 crores (Jan 28)

    • Order inflow of INR 19,300 crores YTD; confident of crossing INR 27,000 crores

    • QRSAM still expected Q4 FY26; more than 90% confident; plus INR 25,000+ crores pipeline for FY27

    What Changed2

    vs Q4 FY26

    Risks discussed4 → 5 (+1)Q&A highlights8 → 3 (-5)
    Key financials

    Metrics

    11

    Periods

    3

    Headline

    5
    • Order Book (Jan 1, 2026)
      ₹73,015 Cr
    • Order Inflow YTD (Jan 28)
      ₹19,300 Cr
    • Cash Position
      ₹7,000 Cr
    • Provisions 9M (Doubtful Debts)
      ₹709 Cr
    • R&D Spend (Last Year)
      ₹1,468 Cr

    Q3

    1
    • Provision Write-back
      ₹256 Cr

    9M

    5
    • Revenue
      ₹17,302 Cr
      YoY+19%
    • PBT
      ₹5,171 Cr
      YoY+22%
    • PAT
      ₹3,845 Cr
      YoY+21%
    • EBITDA Margin
      30%
    • EPS
      ₹5.26
      YoY+20.6%

    Segment breakdown

    Defense
    90% Revenue Share
    Non-Defense
    10% Revenue Share
    Top Order Book (Jan 1)
    ₹20,000 Cr Top 7 projects0 text Key: Fuses, LRSAM, BMP-II, Akash Army, Ashwini, Arudhra, Mi-17 V5 EW
    List

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue Growth
    Revenue growth FY26
    More than 15%
    		High
    Profitability
    EBITDA Margin FY26
    More than 27%
    		High
    Order Inflow
    Order Inflow FY26 (excl QRSAM)
    INR 27,000 crores+
    		High
    Order Pipeline
    QRSAM Order
    INR 30,000-32,000 crores
    		High
    Order Pipeline
    NGC remaining orders
    INR 10,000-12,000 crores in H1 FY27
    		High
    Order Pipeline
    FY27 Order Inflow (excl QRSAM)
    INR 25,000+ crores
    		Medium
    R&D Investment
    R&D Spend FY26
    INR 1,700+ crores
    		High
    R&D Investment
    R&D Spend FY27
    INR 2,000+ crores (20%+ annual growth)
    		High

    Risks & concerns

    7
    RiskSeverity

    EBITDA guidance of 27% appears overly conservative vs 30% actual 9M performance

    Management insists Q4 product mix less favorable; 27% floor guaranteed. Potential upside but management won't revise upward despite 3% outperformance over 9 months — Analyst acknowledged

    low

    QRSAM still not received despite being expected since FY25

    Now pushed to Q4 FY26 with 90%+ confidence. Small chance of Q1 FY27 spill. RFP response and cost audit done. Has been in pipeline for 2+ years across multiple conference calls. — Analyst acknowledged

    medium

    NGC order keeps slipping - now only INR 2,000-3,000 crores this year

    From INR 14,000-15,000 crores total (Q3 FY25) down to INR 2,000-3,000 crores in FY26 with balance INR 10,000-12,000 crores in H1 FY27. Configuration/spec finalization causing delays. — Analyst acknowledged

    medium

    Provision for doubtful debts at INR 709 crores for 9M

    Up from INR 598 crores YoY. Q3 had a provision write-back of INR 256 crores benefiting margins. Ongoing provisioning suggests some collection challenges — Analyst acknowledged

    medium

    System integrator role in QRSAM/Kusha means lower margins than subsystem work

    CMD acknowledged system integrator projects have 10-15% value addition vs 40-45% for subsystem work. QRSAM margins expected similar to Akash but profit shared with large partner ecosystem — Management acknowledged

    low

    Areas of Evasion(2)

    • QRSAM in-house vs outsourced split not quantified
    • Uttam radar configuration referred to HAL

    Q&A highlights

    3

    “missile order itself will be roughly around 30% of the total order value... remaining orders will be executed by BEL... margins will be more or less similar like Akash”

    First time BEL quantified QRSAM value chain split: 30% missile to BDL, 70% retained by BEL+partners. Margins expected similar to Akash program. System integrator role means shared profits but high revenue.

    asked by Kavish Parekh

    2 min read5 chapters

    Detailed Narrative

    01

    Strong 9M Performance with 19% Revenue Growth and 30% EBITDA

    9M FY26 revenue grew 19% to INR 17,302 crores, PAT grew 21% to INR 3,845 crores, and EBITDA margin reached 30% vs 28% YoY. Top executing programs: LRSAM, HimShakti, BSS, Lynx Fire Control, Akash Army, LCA LRUs, Shakti EW - accounting for INR 5,000+ crores. Q4 execution planned around LRSAM, Akash Army, HimShakti, Arudhra MPR, D29 EW, BMP-2 upgrade contributing INR 4,000-5,000 crores.

    02

    QRSAM Nearing Finish Line with 90%+ Confidence

    QRSAM RFP response submitted, cost audit done. Management maintains >90% confidence for Q4 FY26 order receipt of INR 30,000-32,000 crores. Structure: 30% missile value to BDL, 70% executed by BEL and ecosystem. FoPM phase 12-18 months post-order, no revenue in FY27, total execution 5-6 years. New DSIC facility in Andhra Pradesh (920 acres, INR 1,400 crores) being built primarily for QRSAM.

    03

    NGC Continues to Slip but Total Value Preserved

    NGC subsystem orders for FY26 reduced to INR 2,000-3,000 crores (down from INR 4,500 cr guided in Q2) as spec finalization delays continue at GRSE/GSL. However, remaining INR 10,000-12,000 crores expected in H1 FY27 as discussions are at advanced stage. Total NGC program value appears preserved at INR 12,000-15,000 crores across FY26-27.

    04

    R&D Investment Accelerating with 20%+ Annual Growth

    R&D spend being increased from INR 1,468 crores (FY25) to INR 1,700+ crores (FY26) to INR 2,000+ crores (FY27), with 20%+ annual growth committed. R&D engineering team now 3,200+ with 700-1,000 added in last year. Three-tier R&D structure. BEL has designed own fabless chips for microwave applications and signed MOUs with all incoming Indian fabs. Average indigenization at 70-73%.

    05

    AMCA and Beyond - Strategic Platform Expansion

    BEL-L&T consortium submitted AMCA EoI with 50-50 work share. RFP expected mid-February 2026. CMD expressed confidence as 'strongest bidder'. Akash-NG order (INR 2,500-3,000 crores) expected Q4 FY27 or FY28. Shatrughat order (INR 3,000 crores) expected Q4 FY26 or H1 FY27. LCA 97 avionics order (INR 2,400+ crores) imminent. Data center business targeting INR 1,000+ crores from FY27.

    This is an AI-generated summary of a publicly available earnings call transcript.