1:10 Split, 5 Bonus, 70% Dividend: Crorepati Defene PSU Hits New High, 108605% Returns; BUY For Long Term

Defence PSU giant, Bharat Electronics (BEL) is a crorepati-making stock, hitting a new all-time high on Wednesday, giving all-time gains of mind-boggling 108605%. It has turned as little as Rs 10,000 to nearly Rs 1.09 crore in 25 years. BEL's share price has broadly maintained a bullish position in April, and it has further upside potential.

On NSE, BEL's share price traded at Rs 237.30 apiece, up by 1.26%, at the time of writing. It has a market cap of Rs 1,73,461.05 crore.

During the early trade of April 24th, BEL shares zoomed to hit its fresh all-time high of Rs 239.15 apiece. From this level, BEL skyrocketed by a massive 138.2% from its 52-week low of Rs 100.40 apiece.

But that's not all, taking into consideration its new peaked price, BEL has given a breathtaking 1,08,604.55% return in the longest run. The stock price was at a meagre Rs 0.22 per share on January 1, 1999.

Where is BEL headed?

Jigar S. Patel, Sr. Manager - Equity Research at Anand Rathi said, "In recent trading sessions, Bharat Electronics Limited (BEL) has exhibited a strong bullish trend, with its current price nearing the 235 mark. Notably, over the past two weeks, BEL has consistently maintained its position above the R4 resistance level of the Camarilla pivot, indicating a robust bullish sentiment as depicted in the accompanying chart."

Patel further said that this sustained elevation above the R4 resistance signifies a notable bullish bias in the stock's movement.

Also, he pointed out that on the indicator front, the weekly Relative Strength Index (RSI) stands comfortably above the 70 level, indicating strong bullish momentum in BEL's price action.

Considering these indicators, Patel advised traders and investors to consider initiating long positions within the range of 234-238, with a targeted price objective set at 256. It's recommended to place a stop-loss order near the 226 level, based on daily closing prices, to manage potential downside risks. This analysis suggests a favourable risk-reward profile for taking long positions in BEL, given its current bullish momentum and technical indicators.

There are long-term target prices as well set on BEL by global brokerages. Jefferies with a BUY recommendation on BEL has set a target price of Rs 260 apiece as of late.

Jefferies mentioned that BEL is the market leader in domestic defence electronics. The company benefits from spending across the army, navy and airforce. Management has maintained its upbeat outlook commentary on recent result calls as the government's defence indigenisation focus continues.

However, the highest target price is set by Macquarie who is the latest global brokerage to join the bandwagon of BEL's bullish outlook. believes BEL stands out amidst execution risks in product-focused companies. Macquarie has set the highest target on BEL so far to the tune of Rs 280 apiece.

BEL Corporate Actions:

BEL has carried all bonus issues, stock splits and a long history of dividend payout, and has delivered both bonus issues and turned stock splits.

In the case of dividend payouts, BEL has turned ex-dividend in March and February of 2024, for a dividend payout of 70% each valuing Rs 0.70 per share each, totaling 140% or Rs 1.4 per share so far in the current year. As per Trendlyne data, BEL has delivered up to 50 dividends since August 2001.

Under the stock splits basket, EL has carried only one stock split so far. It was in 2017, when 1 BEL share split into ten smaller shares effective from March 16. The face value split from Rs 10 to Rs 1.

Additionally, for bonus issues, BEL has paid three bonuses to its shareholders since 2015, in total it distributed 5 bonuses. The first bonus reward of a 2:1 ratio in September 2015, followed by 1:10 and 2:1 bonus issues in September 2017 and 2022 respectively.

The company has received a positive outlook due to its strong order book. In FY24, the company successfully secured orders worth around Rs. 35000 crore. While overall, in FY24, BEL registered a turnover of Rs 19,700 crore against the previous year's turnover of Rs 17,333 crore recording a growth of 13.65% YoY.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.