Defence PSU giant, Bharat Electronics (BEL) share price continues to witness volatility. In the trading week from September 16-20, BEL dipped by 4.5%, while in a month, the stock dropped by 9.14%. The latest drop in BEL gives a buy-on-dips opportunity, as there is a potential upside of nearly 20% to 40% ahead, as per the consensus of analysts.
BEL Share Price:
After market hours of September 20, BEL ended on a positive note at RS 277.50 apiece, up by 1.74% on BSE with a market cap of Rs 2,02,846.36 crore.
However, the positive closing to the trading week is followed by a 6% decline in a three-consecutive day selloff between September 17-19. The stock was a little over Rs 290 at the start of the said week.
Nonetheless, year-to-date, the stock zoomed by nearly 50%. While in a year, the stock emerges as a multi-bagger with gains of 105.25%.
Is BEL Share Price Undervalued?
As per Alpha Spread, the estimated DCF Value of one BEL stock is 89.48 INR. Compared to the current market price of 277.35 INR, the stock is overvalued by 68%.
BUY/SELL BEL Shares?
As per Trendlyne data, the consensus recommendation from 24 analysts for Bharat Electronics Ltd. is BUY. EPS is expected to grow by 16.1% in FY25. The average target price is Rs 331.61 apiece for 12 months, hinting at a nearly 19.6% potential upside.
But in the long-term BEL has a potential for strong gains. Brokerage Antique Stock Broking has maintained BUY for a target price of Rs 385 per share.
Recently, the Navratna PSU player has secured an order worth Rs. 850 crores from Cochin Shipyard Limited (CSL) for the supply of Indigenous Multi-Function Radar in X Band. This fully indigenous radar designed by DRDO and manufactured by BEL is capable of detecting, acquiring and tracking airborne targets to protect naval ships.
Also, the company orders valued at Rs 305 crore ships, thermal imagers, communication equipment, fire control systems, gun control systems, spares, services, etc.
In total, the new order win is about Rs 1,155 crore. With the latest deals, BEL has accumulated orders totaling Rs.7, 075 Cr. in the current financial year.
At the latest, BEL delivered an 80% dividend worth Rs 0.80 per share as final for FY24. Overall, BEL distributed about 220% dividend amounting to Rs 2.2 per share for FY24. Additionally, BEL has carried only one stock split so far. It was in 2017, when 1 BEL share split into ten smaller shares effective from March 16. The face value split from Rs 10 to Rs 1. Also, BEL has paid three bonuses to its shareholders since 2015, in total it distributed 5 bonuses. The first bonus reward of a 2:1 ratio in September 2015, followed by 1:10 and 2:1 bonus issues in September 2017 and 2022 respectively.
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.
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