Bharat Electronics (500049) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 turnover reached INR 8,530 crore, up 15.83% year-over-year; profit before tax rose 40.05% to INR 2,488 crore; profit after tax increased 39.03% to INR 1,867 crore.

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

• Major expected H2 orders include Ashwini Radar, electronic warfare suite for Mi-17, Akash, and Shakti Phase IV, each valued at INR 2,000-2,500 crore.

• Management confident of meeting INR 25,000 crore order inflow guidance for FY25.

Financial highlights

• EBITDA margin improved to 27.26% in H1 FY25 from 22.66% last year.

• Earnings per share rose to INR 2.55 from INR 1.84 year-over-year; consolidated EPS for H1 FY25 is INR 2.58.

• Gross margin reached 45% in H1, above the 42% annual guidance, driven by favorable product mix.

• Operating cash flow was negative due to inventory build-up for anticipated H2 turnover growth.

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

Outlook and guidance

• Revenue growth guidance of 15% for FY25, targeting INR 23,000 crore turnover.

• EBITDA margin guidance maintained at 23%-25% for FY25.

• Order inflow guidance of INR 25,000 crore for FY25, with confidence in exceeding this target.

• Gross margin guidance of 42% for FY25, with potential upside from further indigenization.

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