Bharat Electronics (500049) Q2 24/25 earnings summary

Executive summary

• Achieved Q2 FY25 turnover of INR 8,530 crore, up 15.8% year-over-year from INR 7,365 crore; H1 FY25 revenue grew 15.83% year-over-year to ₹8,530.43 crore.

• Profit before tax rose 40% to INR 2,488 crore; profit after tax up 39% to INR 1,867 crore year-over-year.

• EBITDA margin increased to 27.26% from 22.66% last year; EPS rose to INR 2.55 from INR 1.84.

• Order book as of October 1, 2024 stands at INR 74,595 crore.

Financial highlights

• Gross margin for H1 FY25 reached 45%, above the 42% annual guidance due to favorable product mix.

• Operating cash flow was negative due to inventory build-up for anticipated second-half turnover growth; net cash from operating activities for H1 FY25 (standalone) was an outflow of ₹2,33,172 lakh.

• Current ratio as of September 30 is 1.6, consistent with historical levels.

• Standalone Q2 FY25 revenue from operations: ₹4,58,341 lakh; consolidated: ₹4,60,490 lakh.

Outlook and guidance

• Confident of achieving FY25 order inflow guidance of INR 25,000 crore, with major orders expected in radar, electronic warfare, and missile systems.

• Revenue growth guidance for FY25 is 15%, with EBITDA margin guidance of 23%-25%.

• No material financial impact from ongoing conflicts in Israel as of the reporting date.

• Export contribution targeted to rise above 3%, aiming for 5% in the near term and 10% longer term.