Tata Power Vs BHEL: Stock Splits, Dividend, Bonus Issues; Which Top Power Stock To Buy On Budget

It's a big day for India as the Modi 3.0 government will declare the country's annual Union Budget for 2024-25 on July 23. Not only market or businesses are expectant for key reforms, but also the common man. On this day, it is crucial to invest in stocks that could give short-term gains. Accordingly, brokerage Prabhudas Lilladher has recommended BUY on three stocks, which include a PSU and Tata stock as well.

Here are key details of these stocks:

Tata Power Share Price:

Stock Price: Currently, TATA Power's stock is at Rs 424.25 apiece, with a market cap of Rs 1,35,562.28 crore. The stock's 52-week high and low are at Rs 464.30 apiece and Rs 216.95 apiece respectively. YTD, the stock zoomed nearly 29%.

Bonus Issue: This Tata Group-backed power player has not announced any bonus issues up till now.

Stock Splits: The company has split once so far in the ratio of 1:10, where its face value was reduced from Rs 10 each to Re 1 each. The record date was in September 2011.

Dividends: As per Trendlyne data, the stock has delivered up to 25 dividends since July 2001. The latest dividend payout was for FY24, for which Tata Power's stock turned ex-dividend on July 4, 2024, for a final dividend of Rs 2 per share. This dividend payout was the same as FY23. Currently, the stock has a dividend yield of 0.5%.

Fundamentals: One of the key positive factors for Tata Power is that its mutual funds holding increased by 1.65% in the last quarter to 7.24. Return on equity is stable at 11.42% in the last financial year, as it is in the normal range of 10% to 20%. While the promoter's pledge is zero. However, Tata Power stock rose 95.06% and underperformed its sector by 18.08% in the past year. Also, its PE ratio is higher than its sector 36.66x, as per the Trendlyne data.

BUY/SELL Tata Power Stock?

The Trendlyne data revealed that the consensus recommendation from 21 analysts for Tata Power Company Ltd. is HOLD. Of the total, 8 analysts have suggested strong buy and buy on Tata Power stock.

Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher has recommended BUY on Tata Power on July 23 with an intraday target of Rs 447 and stop loss of Rs 424.

BHEL Share Price:

Stock Price: This PSU power stock is at Rs 304.90 apiece with a market cap of Rs 1,06,168.11 crore. The stock is near its 52-week high of Rs 335.40 apiece, while is currently trading more than triple the amount of 52-week low of Rs 94.11 apiece. YTD, the stock advanced by 54%.

Bonus Issue: The company has distributed two bonuses. The last bonus issue was of ratio 1:2 and delivered in September 2017, while company's first bonus issue was of 1:1 ratio which was paid in June 2007.

Stock Splits: BHEL has only split once and that was in October 2011 in the ratio of 1:5. The face value was split from Rs 10 to Rs 2 each.

Dividends: Since August 2001, the company has declared up to 38 dividends, as per Trendlyne data. BHEL is set to deliver its final dividend for FY24 to the tune of Rs 0.25 per share, for which it will turn ex-dividend on August 9, 2024. In FY23, the company paid up to Rs 0.40 dividend per share.

Fundamentals: According to Trendlyne data, the stock rose 222.65% and outperformed its sector by 84.6% in the past year. Its Debt to Equity Ratio of 0.36 is less than 1 and healthy, which implies that its assets are financed mainly through equity. Further, the Interest Coverage Ratio is 1.58, higher than 1.5, meaning that it is able to meet its interest payments comfortably with its earnings (EBIT). However, BHEL's PE ratio is -440.24, which is negative, and the Return on Equity(ROE) for the last financial year was 1.15%, less than 10%, indicating an inefficient use of shareholder's capital to generate profit.

BUY/SELL BHEL Share Price?

As per the data, the consensus recommendation from 18 analysts for Bharat Heavy Electricals Ltd. is SELL. Of the total, only 4 analysts have recommended 'STRONG BUY'.

However, on July 23, Koothupalakkal recommended BUY for an intraday target of Rs 320 with a stop loss of Rs 297.

Apart from Tata Power and BHEL, Prabhduda analyst also likes Exide stock for buying on July 23 with a target price of Rs 577 and stop loss at Rs 534.

The analyst expects Nifty to have support of 24,350 and resistance around 24,700. Bank Nifty is seen to have support and resistance around 51,800 and 52,800 respectively.