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Bharat Electronics Limited — Q2 FY26
BEL reported a strong H1 FY26 with revenue of INR 10,180 crore (+15.9% YoY) and PAT of INR 2,255 crore (+20.8% YoY).
bullish
high
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BEL reported a strong H1 FY26 with revenue of INR 10,180 crore (+15.9% YoY) and PAT of INR 2,255 crore (+20.8% YoY). EBITDA margin expanded to 30.15% (+289 bps YoY), driven by favorable product mix and cost optimization. Order book stood at INR 74,453 crore as of Oct 1, 2025, with management confident of achieving FY26 order inflow guidance of INR 27,000 crore (ex-QRSAM) and INR 57,000 crore including QRSAM. Key near-term catalysts include emergency procurement orders (~INR 2,000 crore in pipeline), QRSAM order (expected by March 2026), and large programs like NGC, LCA avionics, and GBMES. Management reiterated revenue growth of 15%+, EBITDA margin of 27%+, and capex of INR 1,000 crore+ for FY26. Risk: Execution delays in complex programs like QRSAM (FOPM phase takes 12-18 months) could push revenue recognition to FY28.
BEL ने H1 FY26 में मजबूत प्रदर्शन किया। कंपनी की कमाई 10,180 करोड़ रुपये (+15.9%) और मुनाफा 2,255 करोड़ रुपये (+20.8%) रहा। कंपनी का मार्जिन (कमाई पर खर्च का अनुपात) 30.15% तक बढ़ा, जो अच्छे उत्पाद मिश्रण और लागत बचत से हुआ। 1 अक्टूबर 2025 तक ऑर्डर बुक 74,453 करोड़ रुपये था। प्रबंधन को FY26 में 27,000 करोड़ (QRSAM को छोड़कर) या 57,000 करोड़ (QRSAM सहित) के ऑर्डर मिलने की उम्मीद है। आने वाले समय में आपातकालीन खरीद (2,000 करोड़), QRSAM ऑर्डर (मार्च 2026 तक), और बड़े प्रोजेक्ट जैसे NGC, LCA एवियोनिक्स से कंपनी को फायदा होगा। FY26 में 15%+ कमाई वृद्धि, 27%+ मार्जिन और 1,000 करोड़+ पूंजीगत खर्च का लक्ष्य है। जोखिम: QRSAM जैसे जटिल प्रोजेक्ट में देरी से कमाई FY28 तक टल सकती है।
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Execution delays in QRSAM program
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Order Book (as of Oct 1, 2025)
INR 74,453 crore
+0.5% vs. previous quarter
Order book remains robust; top 7 orders constitute ~INR 25,000 crore.
Order Inflow (H1 FY26)
INR 12,539 crore
+15% YoY (estimated)
Includes emergency procurement orders of INR 1,350 crore; pipeline of INR 2,000 crore.
EPS (H1 FY26)
INR 3.09
+21.2% YoY
EPS growth driven by higher PAT; annualized EPS run-rate implies strong earnings momentum.
Export Order Book
$326 million
+10% YoY (estimated)
Management targets 10% of turnover from exports in long term; currently 3-4%.
What Changed vs Last Quarter
UPDATED
FY26 Revenue Growth of 15%+
Management reiterated guidance of 15%+ revenue growth for FY26, driven by strong execution of existing order book and expected new orders.
UPDATED
FY26 EBITDA Margin of 27%+
EBITDA margin guidance of 27%+ for FY26, supported by cost optimization and indigenization efforts.
UPDATED
FY26 Order Inflow of INR 27,000 crore (ex-QRSAM)
Order inflow target of INR 27,000 crore for FY26 excluding QRSAM; including QRSAM, total expected at INR 57,000 crore.
UPDATED
Capex of INR 1,000 crore+ in FY26
Capex guidance of INR 1,000 crore+ for FY26, including investment in DSIC facility in Andhra Pradesh (INR 1,400 crore over 3-4 years).
NEW RISK
Execution delays in QRSAM program
QRSAM order expected by March 2026, but FOPM phase will take 12-18 months, pushing meaningful revenue recognition to FY28. Any delays in trials or production could impact future revenue.
NEW RISK
Competition in MALE UAV program
L&T has partnered with General Atomics for the 87 MALE UAV program (INR 30,000 crore). BEL's role is uncertain; management was evasive on whether they will lead or partner, indicating potential competitive pressure.
NEW RISK
Component obsolescence and supply chain issues
Management acknowledged that electronics component availability challenges could cause 5-10% delivery overspill, impacting execution timelines.
NEW RISK
Pay revision impact on costs
Fourth PRC (pay revision for PSU employees) effective from Jan 2027 could increase employee costs by 10-15%, though management expects volume growth to offset.
RISK GONE
Supply chain disruptions from geopolitical tensions
Q1 revenue was impacted by ~INR 200 crore due to Israel-Iran conflict affecting component supplies; similar disruptions could recur.
RISK GONE
Dependence on nomination-based orders
Approximately 90% of order book is nomination-based; any shift to competitive bidding could pressure margins and win rates.
RISK GONE
Execution risk for large programs like QRSAM
QRSAM order expected in Q4 but may slip to next year; delays in RFP issuance could impact order inflow guidance.
RISK GONE
Employee cost pressure from pay revision
Eighth Pay Commission and PSU pay revision could increase employee costs from FY2028, though management expects growth to offset.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q3 FY25, Q4 FY25
The INR 30,000 crore QRSAM order may slip to Q1 FY27 due to procedural delays, impacting order inflow guidance.
Mentioned in Q1 FY25, Q1 FY26, Q2 FY25
Q1 revenue was impacted by ~INR 200 crore due to Israel-Iran conflict affecting component supplies; similar disruptions could recur.
Mentioned in Q1 FY26, Q3 FY25
Eighth Pay Commission and PSU pay revision could increase employee costs from FY2028, though management expects growth to offset.
Mentioned in Q1 FY25, Q3 FY25
A provision of ~₹600 crore was made for liquidated damages due to supply delays, indicating execution risks.
Fast read
Guidance and risk preview
Management reiterated guidance of 15%+ revenue growth for FY26, driven by strong execution of existing order book and expected new orders.
QRSAM order expected by March 2026, but FOPM phase will take 12-18 months, pushing meaningful revenue recognition to FY28.
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