1:2 Split: Defence PSU Stock Up Rs 1,560 Or 143%; Ex-Split In 2 Days; Dividend Ahead, BUY/SELL?

This week, one of the much-awaited defence PSU stocks is set to become cheaper for both new and existing investors. That is because the stock will split into two aka 1:2 ratio. Ahead of the stock split, this stock's 6-monthly gains are a whopping nearly Rs 1,560 or 143%. The stock is going to turn ex-split in 2 days. Do You Own It?

It is neither Bharat Electronics (BEL) nor Hindustan Aeronautics (HAL) but instead Bharat Dynamics (BDL). These three companies are top players in the defence sector, but only BDL is going to split!

Bharat Dynamics Stock Split:

The biggest upcoming event in BDL is now its 1:2 stock splits. BDL announced that its existing 1 (One) Equity Share of the face value of Rs. 10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of the face value of Rs. 5/- (Rupees Five Only) each fully paid up, subject to shareholders' approval.

The reason why BDL has decided to carry a stock split is to comply with DIPAM Guidelines on Capital Restructuring; To encourage wider participation of small investors, and To enhance the liquidity of the Equity Shares of the Company in the Stock Market.

BDL has fixed Friday 24 May 2024 as the Record Date to determine the eligibility of shareholders for sub-division/ split.

Bharat Dynamics Share Price:

Ahead of the split-up, BDL shares made a strong rally in the past six months. On May 22, the stock traded at Rs 2641.35 apiece, up by 4.09% on BSE with a market cap of Rs 48,410.99 crore. The stock was near its intraday high of Rs 2649.50 apiece.

But this also resulted in BDL shares trading closer to its 52-week high level of Rs 2,689.40 apiece, while the stock has given multi-fold returns from a 52-week low of Rs 901 apiece.

In six months, BDL shares jumped by Rs 1,558.6 or 142.87%. The stock was around Rs 1,090.90 apiece six months on November 22, 2023.

YTD, the stock is up by 52.66%. The majority of the upside was seen in the last month as the company's stock split neared. In a month, BDL stock is up by 43%. Further, in a year, the stock has zoomed by 145.80%.

BUY/SELL?

As per the Trendline data, the consensus recommendation from 7 analysts for Bharat Dynamics Ltd. is BUY. EPS is expected to grow by 49.5% in FY24.

After the stock split, BDL will focus on its earnings and final dividend recommendations.

BDL announced that a meeting of the Board of Directors of the Company will be held on Thursday, 30th May 2024, inter alia to consider and approve the Audited Financial Results of the Company for the quarter and year ended 31st March 2024.

Also, the final dividend, if any, for the financial year 2023-24 may be considered at the aforesaid Board Meeting.

Earlier, last month, BDL paid an interim dividend of Rs 8.85 per share having a face value of Rs 10 each.

Bharat Dynamics Limited (BDL), was incorporated on 16 July 1970 in Hyderabad, Telangana as a Public Sector Undertaking under the Ministry of Defence, Government of India to be the manufacturing base for guided missile systems and allied equipment for the Indian Armed Forces. BDL became a listed company in March 2018 by listing its equity shares on the Bombay Stock Exchange and the National Stock Exchange. The Company has 2556 employees as of 31 March 2023 and achieved a sales turnover of Rs.2458 Crore (Provisional & Unaudited) for the financial year 2022-23.

BDL, since its inception, has been working in collaboration with DRDO & Foreign Original Equipment Manufacturers (OEMs) for the manufacture and supply of various missiles and allied equipment to the Indian Armed Forces.