Defence Stock To Buy After Diwali: Not BEL, Or HAL, But This Midcap PSU Is Technical Pick Ahead; Rs 4,700 TP

One defence PSU stock is a technical pick to buy during the trading week of November 4th to 8th, the first weekly session of SAMVAT 2081, This defence stock is neither large-caps like Bharat Electronics (BEL) nor Hindustan Aeronautics (HAL), but a midcap PSU stock under Defence Ministry, BEML LTD. Brokerage SMC Global Securities has set an upside target of 4650-4700 levels.

BEML Share Price:

During Muhurat trading, BEML stock corrected and dipped marginally to close at Rs 4065.45 apiece on November 1. The company's market cap is around Rs 16,930.36 crore.

The stock's price-to-equity ratio is at 58.86x, while the return on equity is at 10.88%.

SMC On BEML:

As per the brokerage's technical report, the stock closed at Rs.4062 on 31st October 2024. It made a 52-week low at Rs.2001.55 on 01st November 2023 and a 52-week high of Rs.5488 on 05th July 2024. The 200-day Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 3663.

On broader charts, stocks have been consolidating in a broader range of 3500-4050 from last few months with prices seen hovering just above its 200 days exponential moving average on daily interval. Last week a fresh breakout has been observed into the stock after a series of prolong consolidation, SMC's note added.

Technically, it said, "the stock has also given a fresh breakout above the neckline of the Head & Shoulder pattern visible on daily time frame. Therefore, one can accumulate the stock in range of 4050-4060 for the upside target of 4650-4700 levels with SL below 3650 levels."

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.

Going ahead, the company's board meeting is scheduled on Monday, the 11th November, 2024, inter-alia, to consider and approve the Un-audited Financial Results for the Second quarter ended 30.09.2024.

BEML Limited is a leading multi-technology 'Schedule A' company under the Ministry of Defence, plays a pivotal role in serving India's core sectors like Defence, Rail, Power, Mining and Construction by offering world class products. 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, with having very strong R&D infrastructure and nationwide network of sales and services. BEML Limited, a committed player in the field of manufacturing earthmoving, transportation, and construction equipment, celebrates a rich legacy spanning six decades of relentless pursuit of excellence and innovation.