BEL Vs HAL Vs BDL: Splits, Dividends, Bonus; Which Zero Debt Defence PSU Stocks To Buy For Post-Budget Gains?

Super defence PSU stocks namely Bharat Electronics (BEL), Hindustan Aeronautics (HAL) and Bharat Dynamics (BDL) witnessed a mixed trend as the countdown for Budget 2024 begins. While BEL and HAL witnessed profit booking, BDL's share price saw an uptrend. These three companies are major defence manufacturing players in India and vital for the government's vision for defence production of Rs 3 lakh and export of Rs 50,000 crore by 2028-29.

With volatility in defence stocks, should you rather buy these three stocks or sell them?

Brokerage Mehta Equities' top picks in defence stocks are PSUs like HAL and BDL. The brokerage said, "As we analyse top defence stocks listed at Dalal Street - we get the same outperforming stocks coming up on the radar primarily on the backdrop of consistent demand, government backing, and long-term contracts."

Regarding export potential, Mehta Equities said, "(Despite boasting the world's fifth-largest Defence budget), India sources a staggering 60% of its weapon systems from international markets. It's time for India to not only address its fiscal woes but also assert its security, sovereignty, and economic interests. (The good news is that the Indian government is trying to strengthen the nation's defence prowess by reducing dependence on imports."

Adding, the brokerage said that large and sustainable opportunities for domestic players also exist particularly in engineering services and component sourcing, on the backdrop of the goal of reaching 50,000 crore in exports by 2029-2030). India shall be the leading global defence manufacturing hub sooner rather than later.

Motilal Oswal has recommended BEL, HAL and RVNL on the lookout for Budget 2024.

Motilal said, "Budget 2024-25 is expected to be growth-oriented, with the announcement of some measures to address the rural economy. The broad emphasis on capital expenditure and investment-led growth is likely to continue, accompanied by measures to revive consumption."

Here are the key highlights of these three defence stocks:

Bharat Electronics (BEL):

Stock Price: At the time of writing, BEL stock was subdued at Rs 312.35 apiece, while leaning towards a bearish tone. Its market cap is around Rs 2,28,284.39 crore. The stock's 52-week high and low is at Rs 340.35 apiece and Rs 123.55 apiece respectively.

Dividend: BEL has announced a final dividend of Rs 0.80 per share for FY24 for which the record date will be announced soon. This will be in addition to the two interim dividends of Rs 0.70 per piece each paid in 2024 earlier. Since August 2001, the company has delivered up to 50 dividends.

Bonus Issue: BEL has a strong history of rewarding bonus shares. The latest bonus was 2:1 in September 2022, following a 1:10 bonus issue in September 207 and another 2:1 bonus issue in September 2015.

Stock Split: BEL stock has been split only once and that was in March 2017 in the ratio of 10:1.

BUY/SELL: As per the Trendlyne data, the consensus recommendation from 26 analysts for Bharat Electronics Ltd. is BUY
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However, Nirmal Bang, the latest to downgrade their stance in defence stocks, has set a target price of Rs 256 on BEL from earlier Rs 328. Also, ICICI Direct has suggested adding BEL stock but the target price is at Rs 300. In the long term, the target price for BEL is around Rs 400 per share.

Hindustan Aeronautics (HAL):

Stock Price: Currently, HAL's share price is trading at Rs 4996.05 apiece, marginally lower on BSE with a market cap of Rs 3,34,203.59 crore. HAL is struggling to hold the Rs 5,000 mark and is a couple of hundreds away from touching its 52-week high of Rs 5,675 apiece. While its 52-week low is at Rs 1,767.95 apiece.

Dividend: In FY24, the company delivered a dividend of a whopping 440% amounting to Rs 22 per share. This is compared to the 550% dividend payout in FY23. Since March 2019, the company paid up to 11 dividends.

Stock Split: HAL has carried one of the latest stock splits in the defence sector. In September 2023, the stock split in the ratio of 10:1.

Bonus Issue: Unlike BEL, HAL has not carried any bonus issues yet.

BUY/SELL?: Antique Stock Broking has set an ambitious target on HAL of Rs 6,145 with a BUY recommendation. As per Trendlyne data, the consensus recommendation from 13 analysts for Hindustan Aeronautics Ltd. is BUY.

Bharat Dynamics (BDL):

Stock Price: This midcap defence PSU stock traded at Rs 1,499.10 apiece with a market cap of Rs 54,951.38 crore. Its 52-week high and low is at Rs 1,794.70 apiece and Rs 450.50 apiece respectively,

Bonus Issue: The company has never carried any bonus issue.

Stock Splits: This year, in May month, BDL carried its first-ever stock split in the ratio of 1:2.

Dividends: BDL has recommended a final Dividend @ Rs 0.85 per share (face value of Rs.5/-each) for FY24. In April 2024, BDL turned ex-dividend for an interim dividend payout of Rs8.85 apiece for FY24. Since, September 2018, BDL has delivered up to 12 dividends.

BUY/SELL: As per Trendlyne data, the consensus recommendation from 6 analysts for Bharat Dynamics Ltd. is BUY. Brokerage Antique has recommended BUY with a target price of Rs 1,643.

Disclaimer: The write-up is just for information purposes, not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.