Bharat Electronics shares: Bharat Electronics Ltd (BEL) witnessed a notable surge of over 9 percent in its shares today, May 21st, propelled by its robust performance in the fourth quarter, which surpassed market expectations and was bolstered by robust margins. The company’s gross profit margin has exhibited resilience over the past three quarters, maintaining an impressive average of 48.5 percent. Notably, BEL’s shares ascended by 9.25 percent, reaching a pinnacle of ₹282.80 on the BSE. Over the last year, the company’s stock has recorded a remarkable uptrend, marking a substantial gain of 154 percent.
Nomura India observed, “A significant 225 percent year-on-year surge in other income also contributed to the 17 percent/ 21 percent surpassing of Profit After Tax (PAT) compared to Nomura/consensus projections.”
Nomura further stated, Our optimism towards BEL persists as we anticipate continued steady growth, propelled by its dominant market position and the expansion of project scales, positioning it to advance along the value chain as a system integrator.
The brokerage projected that BEL could exhibit a Profit After Tax Compound Annual Growth Rate (PAT CAGR) of 16 percent from fiscal year 2023 to fiscal year 2026 while recommending a target price of ₹300 for the stock.
Motilal Oswal commented We have raised the valuation multiple to accommodate the expanding market share of BHE, advantages stemming from technology collaborations, Memorandums of Understanding (MoUs), and a growing portion of exports and non-defense revenues in the overall income. Our valuation for BHE is set at 35 times the Price-to-Earnings (PE) ratio based on two-year forward earnings, leading us to revise the target price to INR310. Consequently, we have upgraded our stance on the stock from Neutral to BUY.
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