UBS Ups BEL Share Price Target To Rs 450 – Buy, Sell Or Hold This Defence Stock?

BEL Share Price Target: UBS upgrades BHE to ‘Buy’ with a revised price target of Rs 450, citing order acceleration, export potential, and combat-tested platforms
In a significant vote of confidence, global brokerage UBS has upgraded Bharat Electronics Ltd. (BHE) to a ‘Buy’ rating, projecting a substantial uptick in orders and execution momentum through FY28. The firm raised its price target from Rs 320 to Rs 450, valuing the company at 45x 12-month forward PE versus 38x earlier.

Combat-Proven Platforms Driving Repeat Orders
UBS points to the combat deployment of key platforms—including the Akash missile system, IACCS control system, upgraded L70 guns, Schilka weapon systems, and advanced radars—as a major tailwind. Now combat-tested, these systems position BHE to secure repeat orders from domestic and export markets.

According to the UBS report, “Major platforms integrated by BHE are now combat-proven, which opens the door for large-scale bookings in both India and abroad.”

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Order Pipeline Accelerating Sharply
UBS estimates a ₹2.4 trillion long-term order pipeline, with Rs 1.4 lakh crore expected to convert to new orders between FY25 and FY28, implying a 33% CAGR in order intake over the period. Notably, BHE expects ₹550 billion in new orders for FY26 alone, including ₹270 billion excluding the Quick Reaction Surface-to-Air Missile (QRSAM) project.

“Post muted orders in FY25, we expect FY26–28 to be an inflexion point for BHE,” UBS noted, highlighting improved visibility for large projects such as Akash NG, radars, and electronic warfare systems.
 

Strong FY26 Guidance and R&D Investment
For FY26, BHE has guided for a minimum 15% revenue growth and a 27% EBITDA margin (up from 23–25% in FY25). The company also plans ₹10 billion in capex and ₹16 billion in R&D spend, with defence contributing 90% of total revenues. Exports and high-margin domestic projects are expected to bolster topline growth significantly.

“BHE’s long-term guidance of 20% revenue growth reflects rising demand and an improving competitive edge,” UBS stated, citing the increasing traction for systems like Atulya and Shakti electronic warfare suites, as well as the upcoming Project Kusha air defence system and software-defined radios (SDRs).

UBS Prefers BHE Over HNAL
UBS now prefers BHE over Hindustan Aeronautics Ltd. (HNAL), which it rates Neutral with a price target of S 5,600, citing BHE’s sharper order book ramp and superior earnings growth visibility.

In conclusion, UBS emphasised that the market is underappreciating the rapid revenue conversion potential from BHE’s robust pipeline. The upgrade to ‘Buy’ and a steeply revised target reflect “upside risk to earnings and growth prospects both locally and globally.”

 

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