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Bharat Electronics Ltd (BEL), a state-run defense company, is set to trade ex-dividend on Tuesday, marking a significant event for its shareholders. This follows the company's announcement of an interim dividend for eligible shareholders, made earlier this month after the release of its Q3FY25 results in January 2025. The company's board declared an interim dividend of Rs 1.50 per equity share, which translates to 150 percent, based on the face value of Re 1 each, as communicated in its exchange filing on March 5, 2025. The dividend is expected to be disbursed within 30 days from the declaration date. This development holds considerable importance for investors, reflecting the company's financial health and commitment to shareholder returns. The stock settled at Rs 272.25 on Monday, experiencing a dip of over 1.7 percent. The company's market capitalization is currently below Rs 2 lakh crore. Despite this recent decline, the stock has demonstrated robust growth, appreciating by over 50 percent from its 52-week low of Rs 179.20, recorded in March 2024. However, it has also retreated by more than 20 percent from its 52-week high of Rs 340.35, reached in July 2024. This fluctuation highlights the dynamic nature of the stock market and the various factors influencing stock prices. The long-term performance of Bharat Electronics shares has been exceptional, surging by nearly 1,100 percent over the past five years and nearly 200 percent in the last two years. The stock is up 30 percent in the last one year, while they have remained slightly negative in 2025 so far. This remarkable growth underscores the company's strong fundamentals and its position as a multibagger stock, rewarding investors who have held onto their shares over the long term. Bharat Electronics has demonstrated strong financial performance, reporting a 47.3 percent year-on-year growth in its profit after tax (PAT) for the third quarter ended December 2024, reaching Rs 1,316.06 crore. The company's consolidated revenue from operations for the quarter amounted to Rs 5,770.69 crore, reflecting a 38.6 percent year-on-year increase. Furthermore, BEL reported an EBITDA of Rs 1,653 crore, marking a 57.5 percent year-on-year improvement for the quarter. Its EBITDA margin expanded by 330 basis points year-on-year to 28.7 percent in Q3FY25. As of January 1, 2025, the company's order book stood at a substantial Rs 71,100 crore, highlighting its strong future prospects and the demand for its products and services.
Bharat Electronics has established itself as a consistent performer in the defense sector, characterized by a solid track record. The company's order inflow has exhibited a robust 24 percent compound annual growth rate (CAGR), leading to an all-time high order backlog of Rs 76,000 crore at the end of FY24. Antique Stock Broking anticipates strong double-digit earnings growth over FY24-27. The brokerage firm has built in 15 percent, 19 percent, and 21 percent revenue, EBITDA, and PAT CAGR, respectively, over FY24-27E, aligning with the company's consistent performance over the past decade. Antique Stock Broking believes that the recent stock price correction, coupled with broader sector and market corrections, presents a favorable entry point for investors to acquire a quality defense stock with market leadership in the defense electronics segment. The brokerage has assigned a 'buy' rating and a target price of Rs 376. Other brokerage firms have also expressed positive outlooks on Bharat Electronics. Jefferies increased its target price on the defense stock to Rs 325. Jefferies noted that Bharat Electronics requires an additional Rs 11,300 crore order inflow to meet its FY25 guidance and that global news regarding increasing defense spending may serve as a near-term catalyst for the stock. Geojit Financial Services highlighted that the cumulative order intake until recently amounted to Rs 10,000 crore, which was lower than the initial guidance. However, management has reiterated its FY25 order inflow guidance at Rs 25,000 crore. Geojit anticipates a margin profile in the range of 25-26 percent, considering the 9MFY25 EBITDA margins at 27.4 percent, and forecasts profitability to grow by 17.1 percent CAGR over FY25E-27. The brokerage firm maintains a positive outlook on Bharat Electronics, citing the government's emphasis on domestic manufacturing, the increasing share of electronics in defense, the company's market leadership position, its strong order backlog, and a healthy margin profile. Geojit has upgraded its estimates and acknowledges the sharp correction in stock prices. It values Bharat Electronics at a price-to-earnings (P/E) ratio of 35 times and maintains a 'buy' rating with a target price of Rs 324.
Phillip Capital and Motilal Oswal have also maintained their 'buy' rating on Bharat Electronics, with target prices of Rs 390 and Rs 360, respectively. Nirmal Bang Institutional Equities upgraded Bharat Electronics post Q3 results to 'buy' with a target price of Rs 326. In summary, Bharat Electronics is poised to trade ex-dividend, offering an interim dividend of Rs 1.50 per share. The stock has demonstrated strong long-term growth and financial performance, with positive outlooks from various brokerage firms. Despite recent market fluctuations, the company's robust order book, government support, and market leadership position make it an attractive investment opportunity in the defense sector. The combination of these factors positions Bharat Electronics for continued success and value creation for its shareholders. The reiterated guidance from management and continued backing by analysts suggest future success for the company. The stock's performance reflects the increasing importance of the defense sector and the Government's support for indigenous manufacturing. The diverse target prices set by analysts reflect different expectations and financial models but overall paint a positive long-term picture for investors. Ultimately, the decision to invest rests on individual risk profiles and expectations, but the data presented in the article highlight a company with solid fundamentals and potential for growth in the foreseeable future. Investors should conduct thorough research, consult with financial advisors, and carefully consider their individual circumstances before making any investment decisions. The outlook for Bharat Electronics remains positive, driven by favorable market conditions, strong financial performance, and positive analyst ratings. However, potential risks and uncertainties should not be overlooked when evaluating investment opportunities. The confluence of these factors paints a compelling picture of Bharat Electronics as a prominent player in the defense electronics landscape.
The robust performance of Bharat Electronics is underpinned by its consistent ability to secure and execute significant orders, a testament to its technological prowess and operational efficiency. The company's focus on innovation and research and development (R&D) allows it to stay ahead of the curve in a rapidly evolving industry, ensuring its continued relevance and competitiveness. The company's proactive approach to engaging with stakeholders, including government agencies, industry partners, and investors, contributes to its strong reputation and fosters trust and confidence in its ability to deliver value. The management team's strategic vision and execution capabilities are crucial drivers of Bharat Electronics' success. Their ability to navigate complex market dynamics, adapt to changing regulatory landscapes, and capitalize on emerging opportunities positions the company for sustained growth and profitability. The company's commitment to corporate social responsibility (CSR) reflects its values and principles, contributing to its positive image and fostering long-term relationships with stakeholders. The company's dedication to ethical and sustainable business practices further strengthens its reputation and enhances its appeal to socially conscious investors. In conclusion, Bharat Electronics is well-positioned for continued success in the defense electronics sector. Its solid financial performance, strong order book, government support, and market leadership position make it an attractive investment opportunity. However, potential risks and uncertainties should be carefully considered when evaluating investment decisions. The company's commitment to innovation, R&D, stakeholder engagement, strategic vision, and corporate social responsibility further strengthens its position and enhances its long-term growth prospects. Investors should conduct thorough research and consult with financial advisors before making any investment decisions.
Source: 150% dividend! Multibagger PSU stock to trade ex-date on Tuesday; check details & targets