Defence PSU giant, Bharat Electronics (BEL) shares trended in a massive rally on Thursday. BEL stock touched yet another new all-time high, and almost neared its Rs 300 mark. BEL is a crorepati-making stock with all-time gains mind-boggling by 131,000%. BEL will continue to be in focus ahead of its dividend payout. Motilal Oswal is the latest to upgrade BEL shares for a target price of Rs 310.
BEL Share Price:
In the early trade of Thursday, BEL shares touched a new all-time high of 293.30 apiece on the NSE. At the time of writing, the stock zoomed by 2% to trade at Rs 289.15 with a market cap of Rs 2,11,362.25 crore.
YTD, BEL shares zoomed by 56% on NSE, while its six-monthly gains are around 107%. In a year, the stock rallied by a whopping 168%. Meanwhile, in 5-years, the stock jumped by 674.35%.
But BEL's all-time gains are breathtaking by 130,990.91% on NSE. The was merely at Rs 0.22 on January 1, 1999.
BEL Dividend:
The defence giant has recommended a Final Dividend of Rs.0.80 per Equity share (having a face value of Rs.1/- each) and the same is subject to the approval by the Shareholders in the ensuing Annual General Meeting of the Company.
In 2024, 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.
Apart from dividends, BEL 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.
Meanwhile, 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 Share Price Target:
The latest to recommend on BEL is Motilal Oswal. The brokerage has increased its earnings estimates for BEL by 21%/32% to factor in the government's continued measures for the defence sector and the company's improving market share, better-than-expected gross margin, and working capital.
Also, the brokerage expects a CAGR of 19%/20%/22% in sales/EBITDA/PAT over FY24-26. Further, it expects OCF/FCF to remain strong over FY24-26 on control over working capital. Further, the company had a cash surplus of INR110b (as of FY24), providing scope for further capacity expansion.
On the valuation, Motilal Oswal said, "BHE is currently trading at 39x/32x on FY25E/FY26E EPS. Our revised valuation multiple takes into account a larger market share of BHE, the benefit of technology tie-ups, MoUs, and an improving share of exports and non-defence in total revenues."
Additionally, it said, "We value BHE at 35x P/E on two-year forward earnings and revise the target price to INR310, which bakes in a 19% CAGR in revenue over the next decade vs. 11% CAGR over the last decade. We upgrade the stock to BUY from Neutral earlier."
In the fourth quarter, BEL's consolidated PAT stood at Rs 1,796.67 crore, as against Rs 1,382.01 crore in Q4FY23 and Rs 860.26 crore in Q3FY24. Consolidated revenue stood at Rs 8,564.08 crore, as against Rs 6479.12 crore in Q4FY23, and Rs 4,162.16 crore in Q3FY24.
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.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor 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.
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