A Navratna PSU with a market valuation of ₹73,280.53 Cr, Bharat Electronics Ltd (BEL) operates in the industrial sector. BEL is an Indian Government-owned aerospace and defence electronics company. Since its inception the company has declared 3 bonus shares till now in a ratio of 2:1, 1:10 and 2:1 and an investment of ₹1 lakh at the beginning of the company would now have given you a return of ₹45 Cr, let's know how.
Share price and bonus issue history of BEL
The shares of BEL closed today on the NSE at ₹100.30 apiece level, up by 0.40% from the previous close of ₹99.90. The stock price has risen from ₹0.22 as of 1st January 1999 to the current market price logging in at an all-time high of 45,490.91%.
If an investor had chosen to invest Rs. 1 lakh in this stock by looking at its growth chances and business model in its initial stage, then he/she would have gained 4,54,545 shares of the company and would have secured a firm base for his/her returns in the near future as the stock is going to take off its price to a highly profitable point. The company issued the bonus shares thrice, looking to its prior development in the respective market. On the date, 14th of September 2015 the company announced its first bonus shares in the ratio of 2:1, which altered the portfolio of investors for good and made the holding's shares 13,63,635 which increased the worth of this stock.
It then issued the bonus shares on the 28th of September 2017 in the ratio of 1:10 which again changed both the value and shareholding of investors and now the shareholding rose up to 14,99,998 shares, with these investors had already gained a good profit, but the company was still going to grow, it once again announced the bonus shares on 15th of September 2022, but this time it was 2:1 and this bonus totally changed the portfolio of investors and made a fortune for them as the share count went from 14,99,998 to 44,99,994 resulting in huge profit for them and making the value of these stock more than Rs. 45 Crore and precisely Rs. 45,13,49,398 on today’s market price.
Should you buy the shares of BEL?
The research analysts of the broking company Ashika Stock Broking Ltd said today in a note that “BEL, a Navratna PSU is India’s leading player with market share of more than 50%, helps meet country’s defence electronics needs. The company is a principal supplier of electronics to all the three arms of defence i.e. Army, Air force and Navy. The focus towards indigenisation and import ban of defence items by the government will augur well for companies like BEL which already is technologically strong and spends ~9% of its revenue on R&D. The share of domestic procurement in the total defence procurement for the government has already increased to 68% in FY22 from 54% in FY19."
They further added that “Besides, the company is also focusing on exports and with recent MoUs will further help to access new technologies and new markets which are various friendly neighbouring countries. The present volatile situation across northern and western borders will imply elevated allocation to defence expenses in upcoming budget. Moreover, the present order book implies revenue visibility of more than 3 years and the management has guided for higher orders in H2FY23 and improvement in margins ahead. At the CMP, the scrip trades at P/E of 22.1x FY24E EPS and investors are advised to ‘BUY’."
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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ABOUT THE AUTHOR
Vipul Das
Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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Published: 02 Jan 2023, 09:32 PM IST
