Best-performing Nifty 50 stock has risen 48% in first half of 2025: Is it still a stock to buy?

Mint

01-07-2025

The Indian stock market has emerged resilient in the face of high volatility, which marked the first half of the calendar year 2025. Geopolitical tensions, earnings slowdown and Donald Trump's tariff war failed to deter stock market bulls, resulting in the Nifty 50 gaining almost 7% in the last six-month period.
Among the Nifty stocks, too, the gainers outperformed losers, with 32 constituents rising and the rest declining. While IT stocks majorly formed the top loser list, Navratna PSU Bharat Electronics (BEL) emerged as the best performer.
BEL share price has jumped nearly 48% in the last six months—driven by strong order pipeline, strong tailwinds for the defence stocks and robust earnings growth. The defence stock has recently been inducted into the benchmark Sensex index, further increasing its lure for investors.
Barring January and February, when BEL shares crashed 16% cumulatively, the PSU stock has risen in all other months, gaining as much as 59% during this period.
The recent order win update by the company on June 30 pushed it to a fresh record high of ₹ 426 on the NSE today (July 1). Since June 20, BEL said it has bagged orders worth ₹ 528 crore, including for radars, communication equipment, EVMs, jammers, shelters, control centre, spares, services etc, resulting in a strong pipeline for FY26.
"As on Q4FY25, its order book stood at ₹ 71,650 crore, three times its FY25 revenue, giving strong execution and revenue visibility going ahead. Recently, BEL has bagged many significant orders, compelling the strong outlook for FY26," said Rajesh Sinha, Sr. Research Analyst at Bonanza.
The outlook of Bharat Electronics is very strong on the back of a strong order book and consistent new order inflows, the analyst added.
Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities, believes that the long-term story for BEL stock remains intact with positive catalysts like continued EPS growth momentum with steady PAT growth of 15–20% CAGR projected over the next two years supported by huge order book which stands at over ₹ 76,000 crore+ (as of Q4 FY25) with healthy execution cycle visibility.
In the first quarter of CY 2025, BEL had posted an 18% rise in its net profit to ₹ 2,105 crore, compared to ₹ 1,784 crore in the same period a year ago. Its revenue from core operations rose nearly 7% to ₹ 9,119.7 crore.
For FY26, management guided revenue growth of 15% YoY, EBITDA margins of 27% with an order inflow guidance at ₹ 27,000 crore.
"BEL's margin guidance appears achievable, supported by rising indigenous content. A strong order pipeline enhances the long-term outlook. We forecast earnings to grow at a 20% CAGR over FY25–27E," said Geojit Financial Services.
The brokerage remains bullish on the PSU defence stock, supported by the government's strong emphasis on domestic manufacturing, the growing contribution of electronics in defence applications, BEL's established market leadership, a robust order backlog, and a consistently healthy margin profile.
Ministry of Defence's budget for FY26E stands at ₹ 6.81 trillion, a 6.3% year-on-year increase. This, as per analysts, could rise by 10% YoY in FY27F, amid geopolitical tensions, to reach around ₹ 7.49 trillion, which bodes well for defence stocks like BEL.
According to Tapse, fresh investors should wait and watch for Q1FY26 earnings presentations. "On valuation perspective based on earnings visibility and order momentum, FY26e forward P/E stands near ~24–25× compared to its historical average of ~20–22× and peer PSU multiples; this isn't excessively overvalued, giving healthy upside from the current levels also," he said.
Long-term investors and those looking to make fresh investments can wait for a 5–8% correction before accumulating with a target of ₹ 500 plus, Tapse advised.
Anshul Jain, Head of Research at Lakshmishree Investments, advised technical investors to wait for consolidation to make a fresh entry.
"BEL rallied strongly after a 194-day rounding bottom breakout at 318, testing a high of 426.5 and now appears extended with a sideways bias, indicating fresh base-building. Traders holding longs can trail their positions with a stop zone at 393–380, which aligns with the short-term support band. If the ongoing momentum persists, the stock can stretch further towards the 475 level in the coming weeks. Overall structure remains bullish, but watch for consolidation phases that may offer fresh entry points," Jain said.