Government-owned Bharat Electronics (BEL) has proposed to issue bonus shares to the equity shareholders of the company. The company’s board of directors will meet on August 4 to consider the proposal. Looking at the positive market signals, the shares of BEL reached a new 52-week high in the stock markets on Monday. Experts are optimistic about BEL shares after the company’s strong earnings in the first quarter of FY13. The company expects to post strong growth in the pipeline going forward.
Feather BSEBEL shares closed by 282.75 up 7.70 or 2.80%. Company hits new 52-week high 287.75 earlier today. Its market cap is approx. 68,894.67 crore on D-Street.
In its regulatory filing, BEL said, “We would like to inform that a meeting of the Board of Directors of the company is scheduled to be held on Thursday, 4th August 2022 to consider, inter alia, the proposal to issue . bonus share to the equity shareholders of the company.”
A listed company distributes bonus shares on its equity shares to the existing shareholders free of cost. Through this, a shareholder can capitalize a portion of a company’s retained earnings for the conversion of its share premium account, or the distribution of Treasury shares.
The company has announced its financial performance for the quarter ended June 30, 2022 (Q1FY23).
In Q1FY23, the company’s standalone net profit was 431.49 crore against profit of 11.15 crore was registered in the corresponding period of last year. Standalone turnover for the period was 3063.58 crore against 1564.34 crore in the same quarter last year.
As on June 30, 2022, the order book position of the company is approx. 55,333 crores.
Should you invest in BEL shares?
Sandeep Tulsian and Gaurav Uttrani, Analysts, JM Financial said, “BHE continues to be our top choice on continued indigenization in defense and increasing share of electronics across all major platforms: Growth due to expansion in: a) Civil segment (Railways, Medical Electronics) positive surprises in , batteries and smart cities), exports (export inflows more than doubled to $400mn) and service earnings (AMC for Russian appliances), b) margin expansion over the past 5 years (despite implementation of Pay Commission, nominated orders) margin cap and higher share of outsourcing), and c) improved financial strength in the form of negative (22 days to -24 days) of NWC and strong ROIC (average of 42% in FY22 versus previous 31%). We modify our TP 315, valuing the stock at 20x Sep’24E EPS as we move 6-months forward.”
Chirag Shah and Vijay Goel, research analysts at ICICI Direct, said the key orders expected in FY24E are of QRSAM (Quick Reaction Surface-to-Air Missile) value. 20,000 crore and MRSAM (Medium Range Surface to Air Missile) value 15,000-20,000 crores. Army is in the process of taking up AON (Acceptance of Requirement) post which they will issue RFP after approval.
“Overall, expected double-digit revenue, order inflow growth, continued margins and strong order book to ensure outperformance,” said analysts at ICICI Direct, adding, “We remain positive over the long term and maintain our BUY rating on the stock.” . We value BEL. Feather 315 i.e. 25x P/E on FY24E EPS.”
The key triggers for the future performance of BEL shares as per the analysts at ICICI Direct are:
The strategy to diversify into non-defense sectors, and focus on increasing the share of exports and services, will help drive long-term growth and reduce risk-taking of its business.
– Strong order pipeline in FY23-24E.
— Revenues, aided by sustained margins in the range of 21-22% in FY22-FY24E, and EBITDA are expected to grow at a CAGR of ~16.8% and 16.3%, respectively.
Strong balance sheet, double digit return ratio.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.