Bharat Electronics: Phase of earnings decline may be a thing of the past

Dependent on defence capex, the company is also unlikely to be impacted by coronavirus-led disruption

Bharat Electronics (BEL), which is down 40 per cent from its November highs, fell on Wednesday to levels last seen in December 2014. While the broader markets have trended down too, BEL has underperformed significantly on the back of weak execution-led performance and worries of an earnings miss in FY20. The government’s stake-sale overhang too had kept Street concerns elevated.

Despite a strong order book, the company had disappointed on the execution front in the December quarter (Q3). Unavailability of inputs, modification in scope of work by clients, non-readiness of sites for carrying out installations and lengthy customer clearance for