2:1 Bonus Issue, 70% Dividend: Multibagger Defence PSU Bags 1940 Cr Order, Buy?

Navratna Multibagger PSU Bharat Electronics Ltd shares settled in red on March 19 on BSE to 185.55 per share with intraday fall of 2.26%. Recently, BEL on March 15 recommended an interim dividend of Re 0.70 (70%) per equity share of Re 1/- each for FY 2023-24. Bharat Electronics shares soared 99% in last 1-year and rallied 166% in last 2-years.

The company in its March 14 BSE filing stated about receiving orders worth Rs 1940.35 crore. The Aerospace & Defense PSU has a market capitalisation of Rs 1,35,632.95 crore. Check details below:

Aerospace & Defense PSU BEL Bags Orders Worth Over 1940 Crore: According to the regulatory filing dated March 14, "Navaratna DPSU Bharat Electronics Limited (BEL) has today entered into a contract valued at Rs 847.70 Cr plus taxes with Larsen & Toubro Limited (L&T) for the supply of 14 cutting-edge Communication and Electronic Warfare (EW) sensors and systems. These state-of-the-art systems, manufactured domestically by BEL, will be installed on three Cadet Training Ships for the Indian Navy.

Additionally, BEL has secured other orders valued at Rs. 1,092.65 Cr following the last disclosure on 13th February 2024. These orders encompass the supply of LRUs for T-70 & T-90 Tanks, Communication Systems for the Indian Navy, as well as other Spares and Services. With these recent developments, BEL has now accumulated orders totaling Rs.32,716.33 Cr in the current financial year, highlighting the company's continued growth and success in the defence sector, added the BSE filing.

BEL Declares 2nd Interim Dividend: As per the BSE filing of the PSU dated March 15, 2024, "In continuation to our earlier letter dated 7'h March, 2024 we wish to inform you that Board of Directors of the Company at its meeting held on 15th March, 2024, inter alia, has declared second interim dividend of Re 0.70/- (70%) per equity share of Re 1/- each fully paid-up for the financial year 2023-24. The second interim dividend will be paid within 30 days from the date of declaration."

BEL Fixes Record Date For Interim Dividend: The company fixed record date for interim dividend as 23th March, 2024.

UBS Recommends Buy Rating: Foreign brokerage firm UBS has upgraded target price of BEL share and assigned buy rating. The global brokerage firm has recommended fresh target price of Rs 257 apiece from the previous Rs 205 per share amid rise in financial year 2024 orders. According to the analyst, ""We raise our target price to Rs 257 and maintain Buy, assigning a 35 times PE to March 2026 earnings (against 30 per cent earlier), building in a lower 10 per cent discount to industrial peers (against 25 per cent 10-year average), given better earnings/new orders momentum." If you buy BEL shares now at the current market price of Rs 185.55 per share, you can fetch potential gain of 38.51%.

Bharat Electronics Shares Performance: The 52-week high price of BEL shares on BSE is Rs 216.70 apiece and 52-week low price is Rs 89.68 apiece, respectively. BEL has a ROE of 24.75 and PE of 37.66. Its EPS (TTM) is 4.93. BEL share declined 12% in last 2-weeks, gave return of 33% in last 6-months, and offered return of 335% in last 3-years. BEL stock surged 478% in last 5-years. In last 10-years, Bharat Electronics Limited shares gave return of 1687%.

The PSU stated credit rating agency ICRA reaffirmed the its long-term rating at '[ICRA] AAA' with stable 'outlook' in February this year. ICRA also affirmed the company's short-term rating at ICRA] A1+.

BEL Financials: BEL announced its net profit for the quarter ended December 31, 2023 at Rs 859.6 crore, up 40% as against Rs 613 crore announced in the similar quarter of last year. BEL's revenue remained nearly flat at Rs 4162.2 crore as against Rs 4153 crore in the corresponding quarter of last year. EBITDA of BEL announced at Rs 1072.6 crore, up 24% as against Rs 863.4 crore in the same quarter of preceding fiscal. Meanwhile, margin arrived at 26%.

BEL Bonus History: The last bonus that Bharat Electronics declared was in 2022 in the proportion of 2:1. The share traded ex-bonus on September 15, 2022. Before that BEL declared bonus shares in 2017 in the ratio of 1:10 and in 2015 in 2:1 ratio.

BEL About: Established in 1954, BEL engages in manufacturing of specialised electronic equipment requirements of the Indian Defence Services. BEL produces a wide range of equipment for areas such as defence communication, radars, naval systems, c4i systems, weapon systems, homeland security, telecom & broadcast systems, electronic warfare, tank electronics, electro-optics, professional electronic components and solar photovoltaic systems, according to its official website.

Disclaimer: The stock has been picked from the brokerage report of UBS. 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 consult with certified experts before making any investment decision.