Defence Stock To Buy: Not BEL, OR HAL, But This Midcap PSU Is Technical Pick, PL Sets Rs 5,600 TP; Q2 Ahead

A defence PSU stock is a hot pick and will be in focus during the November 11 to 15th trading week, due to its quarterly earnings. The defence stock has emerged as a technical pick. Who is it? Neither large-cap giants like Bharat Electronics (BEL) nor Hindustan Aeronautics (HAL), nor midcap PSU BEML Ltd under the Defence Ministry.

BEML is going to be in focus on Monday, November 11, 2024, as the company will announce its Q2 results for FY25. Ahead of the earnings, Prabhudas Lilladher's research head Vaishali Parekh has recommended BUY on the stock with a target price of Rs 5,600. BEML's return on equity is currently at 10.88%, which is healthy.

BEML Share Price:

Last week on Friday, BEML share price closed at Rs 4189.75 apiece on BSE, down by 1.70%. The stock's 52-week high and low is at Rs 5,489.15 apiece and Rs 2,082.70 apiece respectively. While its price-to-equity ratio is at 60.66x, and return on equity is at 10.88%.

Despite the latest correction, BEML ended the trading week from November 4-8 in green with the upside of 4.2%. YTD, the stock rallied by 48% on BSE.

Going ahead, as per the regulatory filing, a Board Meeting of BEML Limited will be held on Monday, the 11th November, 2024, inter-alia, to consider and approve the Un-audited Financial Results for the Second quarter ended September 2024.

Prabhudas Lilladher On BEML:

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said, "The stock after the correction, has consolidated for quite some time and recently has indicated a gradual rise moving above the 50EMA and 200 period MA at 3880 and 3770 levels respectively to improve the bias anticipating for further rise."

Parekh's note added, "The RSI is on the rise indicating strength and can carry on with the positive move further ahead in the coming days."

"We suggest to buy the stock for an upside positional target of 5600 keeping the stop loss of 3600," Parekh lastly said.

The company has a strong track record of dividend payouts. As per Trendlyne data, the company delivered up to 34 dividends since August 2001. In the past 12 months, the stock delivered up to Rs 20.50 dividend per share. Its dividend yield is currently at 0.54%.

Last month, BEML announced that it has awarded a contract for the design, manufacturing, and commissioning of two high-speed trainsets, each comprising 8 cars by Integral Coach Factory (ICF), Chennai. The price of each car is ₹27.86 Crs and the total contract value is ₹866.87 Crs which includes design cost, one-time development cost, non-recurring charges, onetime cost towards Jigs, fixtures, tooling and testing facilities, which will be utilised for all future High-Speed projects in India.

About BEML Ltd:

BEML Limited, a 'Schedule 'A' Company under Ministry of Defence, Govt. Of India, plays a pivotal role and serves India's core sectors like Defence, Aerospace, Rail, Metro, Power, Mining and Infrastructure.

BEML operates in three verticals viz. Defence & Aerospace, Mining & Construction and Rail & Metro and has state-of-the-art manufacturing facilities located at Bangalore, Kolar Gold Fields (KGF), Mysore, Palakkad. BEML has very strong R&D infrastructure. BEML also has nationwide network of sales and services.