We will have limited numbers coming in from BEL for now. I’m hoping you heard everything I said about those numbers. Any initial thoughts on the stock and the sector overall?
Ashi Anand: If you look at Bharat Electronics’ numbers, the revenue has been slightly below expectations. But this isn’t something that concerns us too much, because the order momentum remains quite strong. The long-term macro tailwinds—particularly the push for indigenisation of India’s significant defence imports—are clearly structural growth drivers. So, a one-quarter miss for a company in a sector with such strong tailwinds isn’t a major concern.
That said, another positive is that margins have come in better than expected. While we haven’t had a chance to go through the fine print yet, both margins and profits have outperformed. So overall, the numbers are reasonably fine.
This is a space we like quite a lot. There are limited opportunities where you have such clear growth visibility over the next 5 to 10 years. In defence, given India’s historically high level of defence imports—India was the world’s largest importer until Ukraine overtook us recently—there’s a strong government push to indigenise, which provides a robust growth runway for all defence-related stocks.
Of course, order flows in this sector can be lumpy, and delays are possible, which could lead to quarter-on-quarter variations. But the long-term outlook for the sector remains very promising.
I’d also like your view on the coal sector overall, and particularly on Coal India. Lately, there hasn’t been much discussion around PSUs like Coal India. There was a time when the high dividend yield made the stock attractive, but lately it has lost momentum. There’s been no significant news flow. Even today, the ministry announced that Coal India aims to achieve one billion tonnes of annual output by 2026–27, but there’s been no excitement around it. Why isn’t the stock performing?
Ashi Anand: When it comes to Coal India, the issue is more about the company and the sector, rather than a lack of interest in PSUs overall. In segments like railways, defence, and PSU banks—where there’s clear business momentum and earnings recovery—we are seeing investor interest across the PSU space.So why is Coal India missing out? When investors try to value a company—even if based on dividend yield—the key question is the long-term sustainability of its earnings and yield.In Coal India’s case, from a long-term perspective, there’s a clear shift underway—from thermal coal to solar and other renewables. This is happening at the macro level, at the government level, and even within individual companies. While you may have visibility for the next 3, 5, or even 7 years, as a fund manager, it becomes difficult to project earnings 10–15 years out, especially when the very longevity of the business is in question.
Yes, Coal India offers a high dividend yield. But if there’s limited growth and you’re relying primarily on yield for returns, the concern becomes: how sustainable are those earnings? With year-on-year inflation pushing costs up, you also need revenues and prices to rise. In a sector facing long-term existential risks, that sustainability is uncertain. That’s the core reason why investor focus and momentum are missing from the stock.