Share price of the state-owned Bharat Electrons (BEL) rallied more than 4% as the defence equipment maker impressed the Street with strong performance for the March quarter.
Its consolidated net profit jumped 74.27% to Rs 1,046.97 crore on 49.18% increase in total revenue from operations to Rs 5,816.77 crore in Q4 March 2020 over Q4 March 2019.
Profit before tax (PBT) rose 60.89% to Rs 1,420.09 crore during the period under review. Total tax expense rose 32.31% to Rs 381.17 crore in Q4 FY20 over Q4 FY19.
The performance is notably better than Street estimates. Provisional turnover numbers released in April indicated a revenue growth of 39-40% for the March quarter.
Ebitda margins grew 450 basis points at 25.5%. Thermal imaging cameras, integrated air command and control systems and part supply of long-range surface-to-air missiles were the revenue contributors
BEL ended the fiscal year FY20 with strong order book, providing good revenue visibility. The order book stood at Rs 51,970 crore as of 1 April 2020.
The company received a total order of Rs 13,200 crore during fiscal year 2019-2020. It exported $48.59 million during FY19-20.
Its order backlog amounts to four times the previous fiscal year revenues, provides strong visibility. Akash missile and coastal surveillance systems are some of the major orders the company received in FY20.
The order pipeline looks encouraging, especially with the government stepping-up focus on domestic production.
Avionics package for light combat aircraft, smart city business, electronic warfare systems and spares/services are expected to be the major orders in the pipeline.
But performance in the near term can be volatile. The covid-19 pandemic has disrupted business operations.
BEL expects its profitability during the first quarter of FY 2020-21 to get impacted when compared to the corresponding period of previous year due to COVID 19 impact. However, the situation will normalize during the second half of FY 2020-21.
Meanwhile, the company has declared a final dividend of Rs 1.40 per equity share for the financial year 2019-20.
BEL operates in the aerospace and defense through nine factories, and several regional offices in India. It primarily manufactures advanced electronic products for the Indian Armed Forces. The Government of India held 51.14% stake in the company as on 31 March 2020.
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.