Bharat Electronics (BEL) Surges Nearly 5% as Brokerages Set Bullish Targets Amid Strong Q2 Performance and Zero-Debt Status

Bharat Electronics Limited (BEL), a zero-debt defense PSU, experienced a notable surge of nearly 5% on October 29, coinciding with Dhanteras. This bullish trend is attributed to the company’s impressive performance in Q2 FY25, which has led brokerages to express optimism about BEL’s growth prospects. JM Financial has issued a BUY recommendation, setting a target price of ₹360, a level that would mark an all-time high for the stock.

Key Highlights:

• Current Stock Performance: BEL’s shares closed at ₹283.25, reflecting a 4.89% increase, and the company’s market capitalization stands at ₹2,07,049.49 crore. The stock has soared 53.15% year-to-date (YTD), and its all-time gains are extraordinary, reaching 128,650%, up from just ₹0.22 on January 1, 1999.
• Shareholder Returns: BEL boasts a strong track record of shareholder returns, including three bonus issues and 51 dividend payments since August 2001. In the past year, the company declared a dividend of ₹2.20 per share, with a recent payout of ₹0.80 in August 2024, resulting in a dividend yield of 0.79%.
• Financial Performance: In Q2 FY25, BEL reported a net profit of ₹1,091.27 crore, a significant increase from ₹812.34 crore in the same period the previous year. The company also achieved a turnover of ₹4,425.29 crore, compared to ₹3,918.13 crore in Q2 FY24. For the first half of FY25, BEL’s profit after tax (PAT) rose by 39.03% to ₹1,867.41 crore.
• Order Book and Growth Prospects: As of Q2 FY25, BEL’s order book stands at ₹746 billion, representing approximately 3.5 times its trailing twelve months (TTM) sales. The company is targeting order inflows of ₹250 billion for FY25, driven by strong government focus on product localization and increasing capital expenditure in the defense sector. JM Financial highlights significant opportunities, particularly in naval fleet upgrades.
• Future Projections: JM Financial maintains a positive outlook for BEL, projecting revenue and profit after tax (PAT) compound annual growth rate (CAGR) of 20% from FY24 to FY26. The firm expects EBITDA margins to remain stable between 23% and 25%.

Overall, BEL is positioned strongly within the defense sector, underpinned by robust financial performance, a healthy order backlog, and a strategic focus on growth and diversification.

Disclaimer: This content is for informational purposes only and should not be considered financial advice. Always conduct your own research and consult with a financial advisor before making investment decisions. The performance of stocks and investments can vary, and past performance is not indicative of future results.