Bharat Electronics (BEL) share price witnessed heavy volumes on June 4, during the verdict of the Lok Sabha Election of 2024. The poll results were a shocker, to say the least. Where majority consensus expected a clear majority win for the BJP, this was not the case eventually, emerging as a nightmare for the Indian market which recorded its biggest single-day fall ever. BEL shares which have given over 1,10,000% returns, shockingly toppled by more than 19% with heavy selloffs. This also leads to buy-on-dips opportunities in BEL shares since brokerages continue to like the stock in the long term.
BEL Share Price:
On BSE, BEL stock dropped by nearly 20% to Rs 255.55 apiece with a market cap of Rs 1,86,801.40 crore.
Meanwhile, on NSE, the stock nosedived by 19.21% to close at Rs 257.45 apiece with a market cap of Rs 1,88,190.26 crore. On June 4, the average volume in BEL shares stood at 4,53,92,560, the highest than even Adani stocks or other defence stocks.
Due to this single-day fall, BEL stock is now down by 11% on a week-on-week basis.
The stock has significantly pulled back from its 52-week high of Rs 323.00 apiece which was recorded on June 3, ahead of the mind-boggling drop. Nonetheless, BEL still is a multi-bagger and traded more than double the price of its 52-week low of Rs 113.35 apiece.
Also, YTD and BEL still give double-digit returns by 39%. And is still a multibagger with 1-year and 5-year gains of about 123% and 613.16% respectively. But BEL is a crorepati-making stock with all-time gains of approximately 116,922.73%. The stock was merely at Rs 0.22 apiece 25 years ago on January 1, 1999.
Up till last week, BEL's all-time gains were even near 1,36,000% but that has corrected due to the latest drop.
BEL shares followed the bearish bandwagon on Tuesday because the BJP-led government witnessed sharp losses in seats, with major shifts in regions like Uttar Pradesh. Its opposition gathered more ground than in the previous election. Although BJP-led by PM Modi is back in power for the third time in a row, the market was upset as they predicted a 400-seat win for the saffron party. To stay in power, a party needs to have at least 272 seats in the lower house, while BJP leads with 294 seats.
Defence stocks are among the key beneficiaries of the win of the BJP government as this will lead to policy continuity and retaining of focus on infrastructure development and manufacturing which are seen to be key positives for the sector, as per JM Financial earlier.
BEL Dividend:
Apart from the election trends, BEL stock will be in focus ahead for its final dividend payout of 80% for FY24. The company has recommended a final dividend of Rs 0.80 per share for the fiscal.
This will be the third dividend payout in 2024 so far by BEL. BEL has delivered hefty dividends so far. BEL turned ex-dividend in March and February of 2024, for a dividend payout of 70% each valuing Rs 0.70 per share each, totalling 140% or Rs 1.4 per share so far in the current year.
Among other corporate actions by BEL is that the stock 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, 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.
Also, BEL has a strong track record of bonus shares. The company 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.
FY24 revenue came in at Rs 20,268.24 crore versus Rs 17.734.44 crore in FY23. While PAT stood at Rs 3,985.24 crore in FY24, compared to Rs 2,986.24 crore in FY23.
BEL Share Price BUY/SELL?
As per Trendlyne data, the consensus recommendation from 26 analysts for Bharat Electronics Ltd. is BUY. Of the total, about 20 analysts recommend 'STRONG BUY' and BUY on BEL shares. The 1-year average target price in BEL is at Rs 289, indicating a potential upside of 13%.
In its latest research note, Sharekhan added, that BEL has exceeded FY24 order intake guidance and the future order pipeline is also promising as orders worth Rs 65000 crore (including QRSAM) are to be awarded in the next two years.
Sharekhan's note further said, "We believe BEL would play a significant role in successfully implementing the government's Make in India and AtmaNirbhar Bharat initiatives as it is a key defence and aerospace player. After the strong performance in this quarter, we raise our earnings estimate by 16%/25% for FY25/26 respectively. Hence, we retain a Buy on the stock with a revised price target (PT) of Rs. 325."
The highest target price on BEL is set by ICICI Direct at Rs 330, which hints at a 29% potential upside from current levels.
ICICI's note said, "Healthy order-backlog & robust pipeline provides strong revenue visibility. Moreover, increasing indigenisation across defence platforms, focusing on cost-optimisation and increasing exports & services share would help in sustaining better margins in the coming periods. We expect revenue & PAT to grow at a CAGR of 15% & 15.5%, respectively over FY24-26E. Balance sheet remains strong with healthy returns ratios."
Hence, ICICI Direct recommended BUY on BEL with a target price of Rs 330 per share (based on 45x FY26E EPS).
BEL is a leading aerospace and defence electronics company. It primarily manufactures advanced electronics products. By the end of FY24, the company's order book is about Rs 75,934 crore.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, 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.
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