425% Gains In 3 Years; 180% Dividend: This Defence PSU Stock Soars After FY24 Turnover Hits 19,700 Crore

Shares of Bharat Electronics (BEL) soared to record highs on Tuesday, reaching Rs 221.40 per share on the Bombay Stock Exchange (BSE). The surge in stock prices followed an announcement by the company revealing robust financial performance for the fiscal year 2023-24 (FY24). BEL reported a provision turnover of approximately Rs 19,700 crore, marking a significant year-on-year growth of 13.65%. This performance surpassed the company's turnover of Rs 17,333 crore in the previous fiscal year.

BEL's stock eclipsed its previous high of Rs 216.70 set on March 7. Trading volumes nearly doubled, with a combined 44.1 million equity shares changing hands on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) by 10:18 am. Meanwhile, the broader market sentiment was subdued, with the S&P BSE Sensex down 0.15% at 73,903.

As of April 1, 2024, BEL's total order book stood at Rs 76,000 crore, offering revenue visibility for the upcoming years. During FY23-24, the company secured orders worth approximately Rs 35,000 crore. Analysts attribute BEL's optimistic outlook to its healthy pipeline of fresh orders, bolstered by the Indian government's increased capital budget allocation and ongoing efforts to enhance domestic defence manufacturing capabilities.

BEL's management emphasized its alignment with the Government's 'Make in India' initiative, highlighting priorities such as indigenization, procurement from Micro, Small & Medium Enterprises (MSMEs), and Government e Marketplace (GeM). The company remains committed to exploring new growth avenues through export initiatives, diversification, capability enhancement, competitiveness, and modernization.

According to analysts at JM Financial Institutional Securities, BEL's revenue growth is expected to remain robust, driven by a strong order backlog, a diverse order pipeline, and expansion into other segments such as hydrogen fuel cells and EV batteries. The brokerage firm maintains a positive outlook on BEL, citing factors like sustained steady margin profiles, healthy order prospects, and the Government's continued push for indigenization.

The brokerage firm further stated that it expects revenue and PAT CAGR of 21% and 22% over FY24 to FY26. It maintains a 'Buy' rating on the stock with a target price of Rs 225 per share valuing the company at a PE of 30x in FY26.

BEL's shares continued their upward trajectory, trading with gains of over 4% at Rs 219.90 per share on the National Stock Exchange (NSE) as of 11:10 am. Over the past year, the stock has witnessed an impressive surge of nearly 130%.

Bharat Electronics (BEL) has emerged as a standout performer in the aerospace and defence sector, buoyed by strong financials, a robust order book, and a strategic focus on innovation and indigenization. With favourable market conditions and government support driving its growth trajectory, BEL appears poised for sustained success in the coming years.

Disclaimer: The opinions and suggestions provided above represent the views of individual analysts and do not reflect those of GoodReturns or the author. We recommend investors consult with certified experts before making any investment decisions.