117,082% Jump, 1:10 Split, 5 Bonus: Defene PSU BEL Hits New High; Dividend, Q4 Soon; Short-To-Long-Term Target

Crorepati defence PSU stock, Bharat Electronics (BEL) touched a new all-time high of Rs 257.50 apiece on NSE during the special live trading session on Saturday. The strong buying comes ahead of Q4 results and the final dividend recommendation next week. In Q4, the company's revenue and EBITDA are likely to rise ahead, however, margins may come under pressure owing to the high base. BEL is a leading defence stock and an investor darling due to its strong order book and robust pipeline execution.

BEL Share Price:

At the time of writing, BEL stock zoomed by 3.8% on NSE to trade at Rs 257.60 apiece with a market cap of Rs 1,88,299.90 crore. The stock is near its all-time high of Rs 257.70 apiece which was posted in the opening bell of Saturday.

YTD, BEL shares are up by 39% on NSE, while in a year, the stock rallied by 139% becoming a multi-bagger. But BEL is also crorepati making stock as its all-time gains on the exchange is a whopping 117,081.82% as of now. The stock was merely at Rs 0.22 on January 1, 1999.

If an investor bought BEL shares for Rs 10,000 on January 1, 1999, their corpus would now be Rs 1,16,18,182 or Rs 1.2 crore. The gains on Rs 10,000 investment is around Rs 1.16 crore.

BEL Earnings:

BEL's board meeting is scheduled on Monday, May 20, 2024, to consider and approve, inter alia, Audited Standalone & Consolidated Financial Results for the quarter and year ended 31S1 March 2024

BEL has received a positive outlook due to its strong order book. In FY24, the company successfully secured orders worth around Rs. 35000 crores. Among the notable defence orders obtained during the year were Electronic Fuzes, EW Systems, Communication Systems for naval warships, Fire Control Systems, Akash Prime Weapon Systems, Radars, Sonars, Software Defined Radios, Night Vision Devices, Tactical Communication Systems and other projects in Non-defence sector.

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.

BEL Dividend:

BEL has delivered hefty dividends in 2024 so far. 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, totalling 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.

BEL Stock Split:

The leading defence player 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.

BEL Bonus Issue:

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.

BEL Earnings Outlook

As per ICICI Securities' view, BEL's revenue growth of 13.7% YoY for FY24 is a little better than our expectations of 12.5% YoY. Implied revenue growth for Q4FY24E is ~25% YoY. Order inflows were strong at Rs 35000 crore and remained better than expectations. Order backlog at ~Rs 76000 crore (3.8x FY24 revenue), provides healthy revenue growth visibility for FY25/FY26.

Further, the brokerage said, the order pipeline remains strong in defence segments (electronic warfare, radars, communication, navigation systems etc for various platforms like fighter jets, warships, missiles, unmanned Ariel vehicles), non-defence segments and exports. Over the next 2 years, management expects an order inflow of Rs 50000 crore, with a possibility of additional non-defence and export orders.

BEL Share Target Prices:

As per Trading View, the 26 analysts offering 1-year price forecasts for Bharat Electronics have a maximum estimate of Rs 300 and a minimum estimate of Rs 130. These analysts have given stock ratings on BEL for the past 3 months.

Also, Nomura has initiated coverage on BEL shares and recommended BUY for a target price of Rs 300. The rationale behind Nomura's massive target on BEL is due to the company's increased visibility on order inflows which is likely to provide margin delivery and expansion in return ratios.

While the short-term target could be Rs 280. Macquarie has initiated coverage on BEL. The global brokerage has given an 'Outperform' rating, while the target price is set at Rs 280 apiece

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.