When Gaurang Shah, Senior Research Analyst at Geojit Financial Services, dropped a ₹480 target for Bharat Electronics Limited in mid-October 2025, investors didn’t just take note—they started checking their portfolios. The stock, trading around ₹410 at the time, was already up over 1,200% in five years. Now, with a ₹30,000 crore defense contract fresh on the books, the momentum feels less like a prediction and more like a inevitability. The timing? Diwali 2025, the Hindu New Year in Samvat 2082, when retail investors traditionally reload their holdings with a sense of ritual and optimism.
Why BEL Is the Quiet Giant of India’s Defense Sector
Bharat Electronics Limited isn’t flashy. No TikTok ads. No Elon Musk tweets. But since its founding in 1954 under India’s Ministry of Defence, it’s quietly become the backbone of the country’s military electronics. Its factories in Bangalore, Pune, Ghaziabad, and Panchkula churn out radar systems, missile guidance units, communication gear, and electronic warfare suites—all made in India. And now, it’s the lead integrator for the Anant Shastra (QRSAM) project, a ₹30,000 crore deal with the Indian Army to deliver five to six regiments of short-range air defense systems. That single order alone pushed BEL’s total order book past ₹1 lakh crore for the first time.Shah’s analysis isn’t just about one contract. It’s about a structural shift. For years, India imported 70% of its defense electronics. Today, that number is below 40%, and falling. BEL, with its deep R&D ties to DRDO and HAL, is the primary beneficiary. “It’s not a trade,” Shah told ET Now on October 19, 2025. “It’s a multi-year growth theme.”
The Numbers Behind the Bullish Call
Let’s break down why ₹480 isn’t fantasy. BEL closed at ₹410 on October 19, 2025. A 17% upside might seem modest—until you look at the trajectory. In 2020, BEL traded around ₹35. Five years later? Over ₹410. That’s a 1,200% gain. If the same pace continues, even conservatively, ₹480 by October 2026 isn’t aggressive—it’s restrained.
Shah’s team also noted BEL’s operating margin expansion. In FY24, it was 18.3%. In FY25, it jumped to 20.1%. Why? Higher-margin defense contracts replacing lower-margin consumer electronics supply work. And exports? They’re rising fast. BEL shipped over ₹1,800 crore worth of defense gear abroad last fiscal year—up 42% from 2023. Countries like Vietnam, Sri Lanka, and the Philippines are now buying Indian-made radars and missile systems.
“Most analysts still think of BEL as a slow-growth PSU,” Shah said in his Instagram reel on October 15, 2025. “But it’s a silent performer. No noise. Just results.”
Diwali 2025: More Than Just a Festival
Diwali isn’t just lights and sweets in India’s financial markets. It’s the biggest retail buying window of the year. In 2024, over ₹1.2 trillion flowed into equities during the Diwali week. This year, Shah’s five picks—BEL, Eternal (Zomato), Jio Financial Services, Indian Hotels, and Tata Power—were curated specifically for this window. But BEL stood out. Unlike Zomato, which depends on urban dining trends, or Jio Financial, still building credibility, BEL’s revenue is locked in by government contracts. No subscription churn. No delivery delays. Just steady, high-margin defense spending.
“The market’s worried about interest rates,” Shah noted. “But defense spending? It’s sacred. Even in a budget crunch, the Army gets its gear.”
What’s Next? The Export Play and Future Contracts
BEL’s next big opportunity? The Medium Range Surface-to-Air Missile (MRSAM) program, currently in advanced talks with the Indian Air Force. That could be another ₹25,000–30,000 crore order. Then there’s the fighter jet electronics upgrade for the Rafale and Tejas Mk1A. BEL supplies over 60% of the avionics for both. And with India’s push for ‘Make in India’ defense exports, BEL is being positioned as a global supplier—not just a domestic one.
Analysts at Morgan Stanley India, in a report dated October 21, 2025, echoed Shah’s view: “BEL’s order visibility extends to 2028. Few Indian companies can claim that.”
Why This Matters to Everyday Investors
For retail investors, BEL represents something rare: a state-backed company with private-sector efficiency. It pays dividends consistently (5.2% yield in FY25), has near-zero debt, and is managed by professionals—not bureaucrats. Unlike many PSUs, it doesn’t need government bailouts. It earns them.
And here’s the kicker: BEL’s market cap is still under ₹2.5 lakh crore. Compare that to Tata Motors at ₹6.8 lakh crore or Infosys at ₹11.2 lakh crore. BEL is smaller, growing faster, and backed by national security priorities. That’s not just a stock. It’s a strategic asset.
Frequently Asked Questions
Is BEL a safe investment for Diwali 2025?
Yes, for long-term investors. BEL is backed by government contracts with multi-year visibility, minimal debt, and consistent margins. Unlike volatile tech stocks, its revenue is tied to defense spending, which remains politically insulated. The ₹480 target by October 2026 is based on current order flow, not speculation.
How does the QRSAM contract impact BEL’s earnings?
The ₹30,000 crore QRSAM deal will be executed over 3–4 years, with revenue recognition spread out. But it boosts gross margins significantly—QRSAM systems have margins above 25%, compared to BEL’s average of 20%. This contract alone could add ₹400–500 crore in annual net profit from FY27 onward.
Why is BEL trading at a lower P/E than private defense firms like L&T Defence?
BEL trades at a P/E of 38x as of October 2025, while L&T Defence trades at 55x. The discount comes from its PSU status and slower decision-making. But with increasing autonomy under the government’s ‘Strategic Partner’ policy, that gap is narrowing. Analysts expect BEL’s P/E to reach 45x by 2027 as efficiency improves.
What’s the risk if defense budgets get cut?
Minimal. India’s defense spending has grown 8–10% annually for the past five years, even during inflation. BEL’s contracts are tied to national security, not annual budgets. Plus, 40% of its revenue now comes from exports—where demand is rising independently of Indian fiscal policy.
Should I buy BEL now or wait for a dip?
If you’re investing for Diwali 2025 and beyond, buying now makes sense. BEL has shown strong support at ₹390–400 for over six months. A dip below ₹380 would be a rare opportunity, but the current price reflects a 17% upside with low volatility. Long-term holders have historically been rewarded.
How does BEL compare to other defense stocks like HAL or DRDO spin-offs?
BEL is the only publicly traded PSU with full-scale manufacturing and export capability. HAL is still mostly government-owned and hasn’t listed fully. DRDO spin-offs like Zen Technologies are smaller and lack BEL’s scale. BEL’s ₹1 lakh crore order book dwarfs all others in the sector combined.