Prabhudas Lilladher Recommends 'Reduce' on Bharat Electronics; Sets Target at Rs 411

• Bharat Electronics (BEL) reported strong quarterly performance with 23.7% YoY revenue growth and EBITDA margin expansion to 29.7%.
• Management reiterated FY26 revenue growth guidance of 15% and order inflows exceeding Rs 270 billion (excluding QRSAM).
• BEL aims to improve its non-defense revenue mix from 6-7% to 10-15% in the mid-to-long term, focusing on railways, metros, aviation, space, and data centers.
• Ongoing supply-chain improvements and increasing vertical integration, especially in semiconductors, are expected to boost operational efficiencies.
• Prabhudas Lilladher downgraded BEL from 'Hold' to 'Reduce' due to a sharp stock price run-up, setting a revised target price of Rs 411.

Why It Matters: Despite strong performance, Prabhudas Lilladher recommends 'Reduce' on BEL due to high valuation, setting a Rs 411 target.