1:10 Split, 3 Bonus, 80% Dividend: Crorepati Defence PSU Up 134741%, Rs 10K Turns Rs 1.3 Crore; BUY, Rs 340 TP

Crorepati making defence PSU stock, Bharat Electronics (BEL) is too hot to buy for long term wealth creation. The stock touched new all-time high and is near Rs 300 levels. There is potential for further upside and brokerage Elara Capital has set the stock's highest target price of Rs 340.

BEL share price ended at Rs 296.65 apiece, up by 2.82% on NSE. On May 29, the stock touched a new 52-week high of Rs 299.90 apiece. YTD, the stock has surged by 60% on NSE.

In a year, the stock rallied by 168%. But BEL's all-time gains is around a whopping 134,740.91%. The stock was merely at Rs 0.22 on January 1, 1999. If any investor bought BEL shares 25 years ago, at Rs 10,000, their earn returns up to Rs 1,34,74,091, while their corpus would be around Rs 1,34,84,091 or Rs 1.35 crore.

In its research note, Elara Capital said, "We up FY25E/26E EPS 6%/7% led by margin expansion and higher other income. We raise our TP by 74% to INR 340 from INR 195 on 42x (from 27x) March 2025E P/E one-year forward multiple. BHE's steady revenue growth would be aided by capacity expansions amid rising opportunities while margin may further improve led by mix and efficiencies."

Elara's note added, " We upgrade to Buy from Accumulate, given BHE's positioning and capability in India's growing defence sector. Expect an earnings CAGR of 21% in FY24-26E with an ROE and ROCE of 28% each through FY24-26E (versus FY23-24 ROE/ROCE at 25%/26%, respectively)."

In the fourth quarter, BEL's consolidated PAT stood at Rs 1,796.67 crore, as against Rs 1,382.01 crore in Q4FY23 and Rs 860.26 crore in Q3FY24. Consolidated revenue stood at Rs 8,564.08 crore, as against Rs 6479.12 crore in Q4FY23, and Rs 4,162.16 crore in Q3FY24.

BEL Dividend:

Ahead, BEL is set to pay a Final Dividend of Rs.0.80 per Equity share (having a face value of Rs.1/- each) and the same is subject to the approval by the Shareholders in the ensuing Annual General Meeting of the Company.

In 2024, BEL has delivered hefty dividends so far. BEL turned ex-dividend in March and February of 2024, for a dividend payout of 70% each valuing Rs 0.70 per share each, totaling 140% or Rs 1.4 per share so far in the current year.

Apart from dividends, 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.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.