BEL profit growth lagged revenue as margins fell for a second straight comparison
Costs grew faster than revenue both year on year and sequentially, while a lower tax rate partly supported net profit.
Filed 19 May 2026, 15:23 IST · Bharat Electronics Ltd (BEL)
Key takeaways
- Consolidated revenue grew 11.75% year on year, but operating margin fell 1.62 percentage points to 29.16%.
- Net profit rose just 4.67% year on year to Rs 2,226.35 cr as lower other income and higher depreciation offset operating profit growth.
- The stock fell 3.12% on the first session after the results, despite six of its last eight result reactions being positive.
Price around the results
Revenue grew, but profit conversion weakened
Consolidated revenue rose 11.75% year on year to Rs 10,224.43 cr, while operating profit increased only 5.88%. Expenses grew 14.36%, faster than revenue, narrowing operating margin by 1.62 percentage points to 29.16%. Net profit growth was lower at 4.67%, as other income fell 38.99% and depreciation rose 25.71%.
Sequential momentum came with a cost squeeze
Revenue increased 42.92% from Q3FY26, but expenses grew faster at 44.09%, reducing operating margin by 0.58 percentage points from 29.74%. The tax rate fell 2.11 percentage points to 24.00%, which supported net profit growth of 40.93% sequentially despite the weaker operating margin. Other income contributed 4.18% of pre-tax profit, so it was not the main source of earnings.
Margin remains above the Industrials peer median
The 29.16% operating margin was 13.50 percentage points above the 15.66% median for 71 Industrials companies that had reported the quarter. The quarterly trend shows margin recovery from 27.89% in Q1FY26 to 29.74% in Q3FY26, followed by the Q4FY26 decline; year on year, it was the second consecutive quarter of margin contraction.
The market reaction was negative but not unusually large
BEL fell 0.86% on the results day and 3.12% on the next session, with the five-session decline at 1.52%. That was opposite to the stock's usual pattern after results: six of the last eight reactions were positive, while the median absolute move was 3.95%, making the first-session fall notable but smaller than its typical move.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹10,224 cr | ₹7,154 cr | +42.92% | +11.75% |
| Other income | ₹122 cr | ₹148 cr | -17.32% | -38.99% |
| Expenses | ₹7,243 cr | ₹5,027 cr | +44.09% | +14.36% |
| Operating profit | ₹2,982 cr | ₹2,127 cr | +40.17% | +5.88% |
| Operating margin (%) | 29.16% | 29.74% | — | — |
| Interest | ₹2 cr | ₹2 cr | -20.69% | -72.53% |
| Depreciation | ₹173 cr | ₹135 cr | +27.69% | +25.71% |
| Profit before tax | ₹2,930 cr | ₹2,138 cr | +37.03% | +1.96% |
| Tax | ₹703 cr | ₹558 cr | +25.99% | -5.78% |
| Net profit | ₹2,226 cr | ₹1,580 cr | +40.93% | +4.67% |
| EPS (₹) | ₹3.04 | ₹2.16 | +40.74% | +4.47% |
Operating margin of 29.16% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.86% | -0.72% |
| Next session | -3.12% | — |
| 5 sessions | -1.52% | -2.64% |
| 15 sessions | -4.28% | — |
| 30 sessions | -2.71% | — |
Volume on the results session was 1.12× its 20-day average.
What to watch
- Whether operating margin recovers from 29.16% after the 1.62-percentage-point year-on-year decline.
- Whether expense growth falls below the 14.36% year-on-year revenue growth rate.
- Whether net profit growth improves from 4.67% as other income remains only 4.18% of pre-tax profit.