Govt-Owned Multibagger Defence Stock Gets Buy Call For Higher Return: Ashika Research

Ashika Research has placed buy call to large cap Defence sector stock, Bharat Electronics Ltd with a target price of Rs 115 apiece. The current market price of the stock is Rs 98 apiece and if you buy Bharat Electronics Ltd now, you will get potential 17% return. BEL, a Navratna PSU is India's leading player with market share of more than 50%, helps meet country's defence electronics needs. Check key details below:

1. Bharat Electronics Stock Performance & Return

The last trading price of the stock is Rs 98 apiece with an intraday decline of 1.64% on BSE. The stock's 52-week high is Rs 115 apiece and 52-week low is Rs 62 apiece, respectively.

The stock has given multibagger returns with maximum returns at 193% in last 3-years. The shares have rallied 37% in last 1-year and 65% in last 5-years.

2. Bharat Electronics Reported Decent Q2FY23 Performance

BEL's revenue increased 7.8% yoy/ 26.8% qoq to Rs 3,945.8 crore, primarily driven by better execution and positive spill over effects (orders which was not booked in FY22 due to supply chain issues).

The availability of electronics, vendors, and imported products, along with logistics and labour issues, have eased leading to the improvement in execution. The EBITDA margin dropped 157 basis points on a yoy basis but sequentially improved by 528 basis points at 21.9%.

3. Valuation

According to Ashika Research, "The present order book implies revenue visibility of more than 3 years and the management has guided for higher orders in H2FY23 and improvement in margins ahead. At the CMP, the scrip trades at P/E of 22.1x FY24E EPS and investors are advised to ‘BUY'."

4. About BEL

Bharat Electronics Limited (BEL) is a Navratna PSU (under the Ministry of Defence, Government of India) established in the year 1954. The company has strong manufacturing (with nine manufacturing units) and R&D capabilities and robust cost-control measures.

BEL is a principal supplier of electronics to all the three arms of defence i.e. Army, Air force and Navy. BEL's electronic communications products include HF/VHF transmitters, receivers, microwave radio relays, radars, and other electronic components required by defence and stands to benefit from enhanced budgetary outlay for strengthening and modernising India's security.

Disclaimer

The stock has been picked from the brokerage report of Ashika Research. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.