1:2 Bonus, 1:5 Split, 38 Dividends: Not BEL, But Exit This Maharatna PSU Stock, Falls 13% In 30 Days; Find Out

Brokerage Prabhudas Lilladher has recommended exiting a defence PSU stock with Maharatna status. The brokerage's recommendation is based on the stock's slip below its stop loss price recommendation. Who is it? Not the defence major Bharat Electronics (BEL) but Bharat Heavy Electricals (BHEL).

On the BSE, BHEL shares ended at Rs 257.15 apiece, down by 3.04% after the closing hours of September 19, 2024. The company's market cap is Rs 89,541.26 crore. During Thursday's trading session, BHEL shares slipped to even below Rs 250 levels, touching an intraday low of Rs 249.65 apiece.

The stock's 52-week high and low are Rs 335.40 apiece and Rs 113.50 apiece, respectively. In a month, BHEL stock has dipped by 13.20% on BSE. Its price-to-equity ratio is negative at -720.13, and its return on equity is also low at -0.50%.

Prabhudas Lilladher in a note on Thursday said, "BHEL our Technical Pick given at 268 is now trading at 251 - EXIT."

Earlier, this week, Vaishali Parekh, Vice President - of Technical Research at Prabhudas Lilladher said, "The stock has witnessed a steady slide in recent times, having corrected quite significantly and has been consolidating for the last 3 sessions, taking support near 258 zones just above the important 200 period MA of 255, with currently indicating a positive candle formation with improving bias."

Further, Parekh added that the RSI has arrived near the highly oversold zone and has indicated a positive trend reversal to signal a buy. Accordingly, Parekh had said "With the chart looking very attractive and having much upside potential visible from the current rate, we suggest buying the stock for an upside target of Rs 307, keeping the stop loss of Rs 250 level."

Since the BHEL has slipped below the stop loss of Prabhudas, the brokerage recommends EXIT.

BHEL is India's largest engineering and manufacturing enterprise, operating in the energy, industry and infrastructure sectors. The company was established in the year 1964 and since then it has been "Making in India" offering comprehensive products, systems, and services in various areas including power generation (thermal, hydro, gas, nuclear, and solar PV), transmission, transportation, defence, aerospace, oil and gas, and emerging sectors like battery energy storage systems and electric vehicle chargers. BHEL has a pan-India presence with 16 Manufacturing Units and 140+ project sites (including overseas).

Since August 2001, the company delivered 38 dividends. In the last 12 months, the dividend amount stood at Rs 0.2 per share. Current, dividend yield is at 0.09%.

BHEL has sub-divided its shares only once. In October 2011, BHEL shares turned ex-split in the ratio of 1:5, where the face value of Rs 10 was cut to Rs 2 per share.

Also, the company has carried two bonus rewards since 2007. The first bonus issue was of 1:1 in June 2007, followed by 1:2 bonus issuance in September 2017.

Notably, BHEL plays a crucial role in the strategic sectors of the nation, especially through its engagement in all three stages of India's nuclear power programme and as a supplier of critical equipment and services for defence and aerospace sectors for over three decades, including as a trusted supplier of Super Rapid Gun Mount (SRGM) naval guns - the Front Line Weapon for Indian Navy.