BHEL to gain from rise in defence spend

The leader in defence electronics in India, Bharat Electronics (BHEL) would be a key beneficiary of the rising defence expenditure in the country. The Indian Air Force would be finalising large ticket acquisitions of $20-22 billion, and as the proportion of Electronics is higher in Air Force orders, these deals would be important from BHEL’s perspective. We expect BHEL to report revenue CAGR of 14% and earnings CAGR of 18% over FY15-17. Our target price of INR2,600 implies 26% upside. Large Electronic Warfare Systems such as Tactical Communication Systems, Battle Field Management Systems (BFMS), and Future Infantry Soldier System (FISS), among others, would be medium-term drivers. In the past, BHEL has said the potential pipeline from stands at R40,000-50,000 crore. more at: http://www.financialexpress.com/news/bhel-to-gain-from-rise-in-defence-spend/1288446