After 2:1 Bonus Issue, 60% Dividend, PSU Stock Gets Buy Call; TP Rs 190: ICICI Securities

ICICI Securities has recommended buy call to large cap public sector undertaking (PSU), Bharat Electronics Ltd (BEL) with target price of Rs 190 per share as order inflow continues to impress. Bharat Electronics shares gained 60% year-to-date and soared 129% in last 2-years. Current market price of Bharat Electronics share on BSE is Rs 160.30 apiece and if you buy BEL stock now, you can fetch likely return of 18.53%. The company issued a press release yesterday saying the company has received orders worth Rs. 3,915 Crore.

BEL Bags Orders Worth Rs 3,915 Crore: According to the BSE filing of the company, "Bharat Electronics Limited received an order of Rs 580 Crore from Indian Army for AMC of Radars. This project will have participation of Indian electronics and associated industries, including MSMEs, which are sub-vendors of BEL."

The Company has also received additional orders worth Rs 3, 335 Crore since the last disclosure on 151h Sept 2023 and the said orders pertain to AMC for AEW&C system (Airborne Early Warning & control), Uncooled TI sights, Software Defined Radios, SWIR pay load, AMC for IACCS, Passive Night Vision Binoculars etc., added the press release.

Bharat Electronics Dividend: Earlier this year on September 12, 2023 the company declared the payment date for final dividend of 0.60/- (60%) per equity share of Re 1/- each announced at the 69th AGM of the company held on August 28, 2023. The payment date of the final dividend to eligible shareholders is September 25, 2023.

Bharat Electronics Bonus Issue: Bharat Electronics has given 3 bonuses since September 14, 2015. The last Bonus that Bharat Electronics anoununced was in the ratio 2:1 with ex-date of September 15, 2022.

Bharat Electronics Stock Performance & Return: Last trading price of BEL stock is Rs 160.30 per share. BEL shares hit fresh 52-week high in trade today (December 7, 2023). Its 52-week high price is Rs 163.00 per share and 52-week low price is Rs 87.00 per share, respectively. Bharat Electronics has a market capitalisation of Rs 1,17,175.75 crore. Bharat Electronics shares gained 60% YTD, jumped 51% in last 1-year, and offered return of 128% in last 2-years. In last 3-years. BEL stock surged 318% and rose 498% in last 5-years.

Valuation: According to ICICI Securities, "Despite FY24 being a pre-election year, BEL continues to report an impressive order inflow, lending certainty to the execution. At this stage, we introduce FY26E earnings. We revise up our valuation multiple one notch to 28x (earlier 27x) taking cognizance of stronger and certain order execution. We roll over valuation to FY26E, resulting in a revised TP of INR 190 (earlier INR 155) on 28x FY26E EPS."

Bharat Electronics About: Bharat Electronics Limited (BEL) is a Navratna PSU under the Ministry of Defence, Government of India. It manufactures state-of-the-art electronic products and systems for the Army, Navy and the Air Force. BEL has also diversified into various areas like homeland security solutions, smart cities, e-governance solutions, space electronics including satellite integration, energy storage products including e-vehicle charging stations, solar, network & cyber security, railways & metro solutions, airport solutions, Electronic Voting Machines, telecom products, passive night vision devices, medical electronics, composites and software solutions, according to its official website.

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