Dividend Stock Hits New High; Defence Giant BEL Wins Rs 5,336.25 Crore Contract, To Generate 1.5 Lakh Jobs

Defence giant and a hefty dividend-paying company, Bharat Electronics is unstoppable as it has bagged yet another contract that is worth a whopping Rs 5,336.25 crore. The contract is long-term and involves the procurement of Electronic Fuzes for the Indian Army. BEL shares on Friday touched a new all-time high.

The Defence Ministry, signed a landmark contract with Bharat Electronics for the procurement of Electronic Fuzes for the Indian Army for 10 years, at a total cost of Rs 5,336.25 crore on December 15th.

This contract is part of 'Aatmanirbhar Bharat' vision for ammunition procurement under 'Manufacture of Ammunition for Indian Army by Indian Industry', which is a Government initiative for a long term requirement of 10 years.

The ministry said the aim of the project is to build up ammunition stocks to minimise imports, achieve self-sufficiency in ammunition manufacturing, obtain critical technologies and secure stock affected by supply chain disruption.

According to the statement, Electronic Fuzes are an integral component of medium to heavy calibre Artillery guns which provide sustained artillery firepower for military operations. The Fuzes will be procured for usage in artillery guns which are capable of lethal engagements in various kinds of terrain including high-altitude areas along the Northern Borders.

BEL will manufacture these Electronic Fuzes from its Pune and upcoming Nagpur Plant.

This mega project will generate employment for one and a half lakh man-days encourage active participation of Indian Industries including MSMEs in ammunition manufacturing and broaden the ammunition manufacturing ecosystem in the country.

Incorporated in 1954, BEL engages in the manufacturing of specialised electronic equipment requirements of the Indian Defence Services. BEL produces a wide range of equipment for areas such as defence communication, radars, naval systems, c4i systems, weapon systems, homeland security, telecom & broadcast systems, electronic warfare, tank electronics, electro-optics, professional electronic components and solar photovoltaic systems.

On BSE, BEL shares ended at Rs 169.10 apiece, up by 3.17% with a market cap of over Rs 1.23 lakh crore. The stock closed near its fresh 52-week high of Rs 170.15 apiece which was logged during trading hours.

This Navratna Defence PSU is among the top dividend paying stocks in the sector. It has declared a total of 180% dividends aggregating to Rs 1.8 per share for FY23. The dividend was announced in series of Rs 0.6 each or 60% in January, March, and May.

Earlier this month, BEL announced that it had received new orders worth Rs 3,915 crore from September 15th till the first week of December. These orders include AMC of Radars, AMC for the AEW&C system (Airborne Early Warning and control), Uncooled TI sights, Software Radios, SWIR payload, AMC for IACCS, Passive Night Vision Binoculars etc.

Prior to the latest defence contract under Aatmanirbhar Bharat, BEL had announced that BEL's total received orders in the current financial year 2023-24 is at a staggering Rs 18,298 crore.

BEL has achieved a Turnover of Rs 7364.82 crore, registering a growth of 5.82% during the 1st half of FY 2023-24 over the Turnover of Rs 6,959.78 crore recorded in the corresponding period of the previous year. Also, in H1FY24, PAT stood at Rs 1343.18 crore, with a growth of 28.84% YoY.