1:10 Split, 3 Bonus, 55 Dividend; Defence PSU Stock BEL Is Rs 21 Away From New Highs; Motilal Says BUY

Zero-debt defence PSU giant, Bharat Electronics (BEL), share price is an hot bet after the DAC approval for Rs 79,000 crore worth proposal that will transform and strengthen the Indian army, air force and navy. Major defence companies are expected to win big orders due to the DAC approval, and that is seen to be a major bull driver. BEL is also expected to be benefit big time. That is why, brokerages like Motilal Oswal and Elara Capital recommended BUY on BEL share price. BEL is the second highest defence company in India after HAL, and is currently trading below Rs 450.

Bharat Electronics (BEL) Share Price:

After market hours on NSE, BEL stock price closed at Rs 415.30 apiece on October 27, with market cap of Rs 3,03,575.11 crore. Despite the latest correction, BEL is less than Rs 21 away from crossing its 52-week high of Rs 436 apiece.

Also, year-to-date performance of BEL is stronger than Nifty and defence index itself, as it gained by over 41.3%. In 1-year, the gains are around 54%. But in the long-term, BEL shares zoomed by 1,332.07%. Noteworthily, BEL's all-time gains is a mind-boggling by 188,672.73%. The stock was at merely Rs 0.22 on January 1, 1999. These gains are adjusted to stock splits, bonus and dividends.

Bharat Electronics (BEL) Share Price Buy Recommendation:

Recently, DAC approved Rs 79,000 crore proposals. For Indian army, DAC approved the procurement of Nag Missile System (Tracked) Mk-II (NAMIS), Ground Based Mobile ELINT System (GBMES) and High Mobility Vehicles (HMVs) with Material Handling Crane.

While for Indian navy, approval is granted to procure Landing Platform Docks (LPD), 30mm Naval Surface Gun (NSG), Advanced Light Weight Torpedoes (ALWT), Electro Optical Infra-Red Search and Track System and Smart Ammunition for 76mm Super Rapid Gun Mount.

And lastly, for the Indian Air Force, DAC approved for Collaborative Long Range Target Saturation/Destruction System (CLRTS/DS) and other proposals. The CLRTS/DS has the capability of autonomous take-off, landing, navigating, detecting and delivering payload in the mission area.

BEL is expected to win big orders for Indian Army and Indian Navy. According to Motilal Oswal, the defence PSU giant is well-positioned to capture orders for electronic warfare systems, radars, and naval sensor suites.

Accordingly, Motilal announced BUY recommendation for a target price of Rs 490 on BEL.

Also, as per analysts at Choice Equity Broking research, BEL's , electronic components contribute approximately 30-60% of the cost of defence equipment, depending on the platform type. BHE holds a strategic position in India's defence sector, catering to all arms of the armed forces and serving as a key supplier to major defence companies. The brokerage has set Rs 500 as high target for BEL.

Bharat Electronics Corporate Actions:

Dividends: Since August 2003, BEL has rewarded up to 51 dividends, as per the data. In the past 12 months, the stock gave about Rs 2.40 per share dividend. While its current dividend yield is around 0.58%.

Bonus Issues: BEL holds the record of delivering three bonuses. Its first bonus shares were in the ratio of 2:1 in the year September 2015, followed by another 1:10 bonus issue in September 2017. The last bonus share was of 2:1 ratio in September 2022.

Stock Split: In March 2017, BEL has split its shares for the first time in the ratio of 1:10. The face value of Rs 10 is sub-divided to Re 1.

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