Defence PSU and debt-free company, Bharat Electronics (BEL) ended the trading week of October 7-11, on a positive note. BEL's weekly upside is more than 3%, and the stock is currently near the Rs 285 level. There is a strong buy recommendation by brokerage Sharekhan for a target price of Rs 380, signalling a potential nearly 36% upside in BEL. The outlook is before BEL's Q2 earnings.
BEL Share Price:
BEL stock price ended at Rs 285.85 apiece, on BSE, with a market cap of Rs 2,08,950.03 crore. As of October 11, 2024, BEL's price-to-equity ratio is at 48.99x, and its return on equity is at 26.52%.
BEL's weekly performance was healthy with gains of 3.3% on BSE. YTD, BEL stock is up by 54.5%.
BEL Q2 Results:
The defence giant's board of directors are scheduled to meet on Friday, the 25th of October, 2024 to consider and approve, inter alia, Unaudited Standalone & Consolidated Financial Results for the quarter and half year ended 30th September, 2024.
Earlier this week, the company bagged additional orders of more than Rs.500 crore, since its last disclosure on September 11.
The major orders received include EMI shelters, AMC for Integrated Air Command and Control system nodes, Upgrade/spares for gun systems, spares for radars, communication systems etc. With these orders, BEL has now accumulated orders totalling Rs 7,689 crore in the current financial year.
In Q1FY25, BEL earned a standalone net profit of Rs 776.14 crore, rising by a whopping 46% from a net profit of Rs 530.84 crore in the same period a year ago. Also, the defence PSU giant's revenue increased by 19.6% to Rs 4,198.77 crore in Q1FY25, compared to revenue of Rs 3,510.84 crore recorded in the same period last year.
BEL BUY Recommendation:
In its preview note, Sharekhan is expecting sales of Rs 4,712 crore for BEL, which would be up by 18% YoY and 11% QoQ. While its operating profit margin is predicted at 24.4% in Q2FY25, however, contracting by 99 bps YoY but expanding by 207 bps QoQ. PAT is factored at Rs 849 crore, registering an upside of 7.5% YoY and 8.7% QoQ.
BEL is Sharekhan's preferred pick. The brokerage has recommended BUY for a target price of Rs 380.
BEL has a strong track record of bonuses, and dividends, while the stock has split only once.
Bonus Issue: So far, BEL has delivered 3 bonuses, but in total has given five free shares. The first bonus issue was 2:1 in September 2015, meaning 2 bonus shares on the existing 1 share. While the second bonus issue was 1:10 in September 2017, meaning, 1 bonus share on the existing 10 shares. And similarly, the last bonus issue was 2:1 in September 2022.
Dividends: Since August 2001, BEL has distributed 51 dividends, as per Trendlyne data. In the last 12 months, BEL delivered dividends of Rs 2.2 per share. Currently, it has a dividend yield of 0.79%.
Stock Split: BEL has split only once and that was in March 2017. The split ratio was 1:10, meaning 1 equity share of a face value of Rs 10 of BEL was split into ten shares with a face value of Rs 1 each. The latest dividend payout by BEL was Rs 0.80 or 80% for which it turned ex-dividend in August 2024.
Bharat Electronics Limited (BEL) is a Navratna PSU under the Ministry of Defence, Government of India. It manufactures state-of-the-art electronic products and systems for the Army, Navy and the Air Force.
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