480% Returns From 1-Year Low: Multibagger Defence Stock Less Than Rs 10 Away From New High; Co Wins Big Order

Defence-related products manufacturer, Avantel witnessed huge buying at the start of this week after the company bagged a huge order from government-backed NewSpace India. Avantel share which has given triple-digit returns so far in 2023, is near its 52-week levels. This year, Avantel has announced major corporate actions for shareholders from dividends to bonus issues.

Year-to-date, Avantel shares have zoomed nearly 400%. The stock has gained from near Rs 25 levels to over Rs 125 mark currently. Its 52-week high and low are at Rs 136 apiece and Rs 21.98 apiece respectively.

From its 52-week lows, the stock has skyrocketed by nearly 480% as of now. The stock touched its highest level of Rs 136 last week.

On December 4th, Avantel shares ended at Rs 127.30 apiece, up by 3.41% on BSE with a market cap of Rs 3,096.82 crore. The stock is less than Rs 10 away from hitting its 52-week high.

In a major development, Avantel bagged an order worth Rs 67.92 crore from NewSpace India, which is a government-owned PSU under the Department of Space.

The deal comprises of supply, installation, and commissioning of Satcom Terminals (Xponders).

Avantel expects to execute the order by October 2024. The order is on a domestic level and its nature is manufacturing.

NSL is engaged in producing, assembling and integrating the launch vehicle with the help of an industry consortium. Its vision is to excel in providing space-related products and services emanating from the Indian Space Programme to global customers and to further spur the growth of Indian Industry in undertaking technologically challenging space-related activities.

Meanwhile, Avantel has been supporting the strategic sector for three decades and has rolled out many unique products/solutions to Indian Defence Services and allied establishments. The company in its initial years, has manufactured various building blocks of the Radios.

Last week, Avantel also approved the grant of 39,69,800 Stock Options to the eligible employees of the Company, in terms of Avantel Employees Stock Option Plan 2023 ('ESOP 2023').

From early 2000 onwards; the company has reoriented itself and started offering system-based solutions to its customers in four main verticals i.e. Satellite Communications, HF Communications, Electronic Warfare and Radar systems respectively. Presently, the company is in the process of enhancing its portfolio and developing SCA-compliant Software Defined Radios, High Power HF systems, Air Defence Radars and Small Satellites.

Avantel is both high dividend paying and hefty bonus issuing shares in the defence sector. Recently, Avantel stock turned ex-bonus on November 24 for bonus issue in the ratio of 2:1 which means that the company will issue two new fully paid-up equity shares at a face value of Rs 2 each against every 1 existing share.

By way of bonus issue, the company has allotted 16,21,79,720 equity shares of Rs.2/- each. Last year, Avantel alloted bonus shares in the ratio of 3:1.

Apart from this, Avantel has also been a dividend-paying small-cap stock. As per Trendlyne data, since June 2001, Avantel has delivered up to 20 dividends. In the last 12 months, the stock declared a Re 1 dividend per share.

Earlier, in mid-August, Avantel also turned ex-split in the ratio 1:5 -- which means that each existing share having a face value of Rs 10 each was sub-divided into five shares having a face value of Rs 2 each.

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.