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Bharat Electronics Ltd. is a big cap industrial firm having a market value of Rs. 81,284.74 crore. Bharat Electronics Limited is a Navratna PSU under the Ministry of Defence of the Indian Government (BEL). It manufactures state-of-the-art electronic goods and equipment for the Army, Navy, and Air Force. The firm is debt-free, according to Value Research’s data, which is a positive characteristic of the stock. The company’s decision to issue three bonus shares, which will make investors crorepati in 23 years, adds even more intrigue to the stock. Let’s learn how.
Shares of Bharat Electronics Ltd. closed trading on the NSE at Rs. 111.75 per unit, up 0.59 percent from the previous close of Rs. 111.10. The company traded a total of 27,675,466 shares today, which was more than the 20-Day Average Volume of 25,560,615 shares. As of today’s market pricing, the stock price has soared from ₹0.22 on January 1st, 1999, to all-time high of 50,695.45%, and a multibagger return.
An investor would have 4,54,545 shares in their portfolio if they had invested one lakh rupees in the stock at the company’s inception. After this corporation announced 3 bonus offerings in 2015, 2017 and most recently on September 15, 2022. In 2015, the firm issued bonus shares for the first time in a 2:1 ratio, changing an investor’s original shareholdings and bringing the total number of shares to 13,63,635, which caused the value to increase noticeably.
A short while later, the firm issued bonus shares once more, but this time in a ratio of 1:10, adding 1,36,363 to the existing share count and bringing it to 14,99,998, increasing the percentage of holding, which was profitable in 2017. On September 15, 2022, the corporation issued its most recent bonus share in a 2:1 ratio, giving the investor an additional 29,99,996 shares and increasing their overall ownership to 44,99,994—a number far higher than the original shares.
Investors appear to have profited from each of the company’s bonus issuance, and the original investor who choose to stay with the business for a considerable amount of time made a sizeable profit. The initial investment multiplied more than 1000 times, increasing the value of all 44,99,994 shares to more than ₹50.28 crores at the time of writing at the current market price.
Q1FY23 Results Of BEL
Bharat Electronics Limited (BEL), a Navratna Defense PSU, reported revenue of Rs. 3063.58 Cr. in the first quarter of FY 2022–23, compared to revenue of Rs. 1564.34 Cr. in the same quarter of FY 2021–22. This represents a YoY growth of 95% on a standalone basis.
The company reported a total expense of ₹2694.42 Cr in Q1FY23 compared to ₹1664.08 Cr in Q1FY22 representing a YoY growth of 61.91%. Profit Before Tax (PBT) in Q1FY23 stood at Rs. 578.10 Cr against the Profit Before Tax (PBT) of Rs. 15.17 Cr recorded in Q1FY22 and Profit After Tax (PAT) in Q1FY23 stood at Rs. 431.49 Cr against the Profit After Tax (PAT) of Rs. 11.15 Cr recorded in the same quarter of the previous year. The company’s earnings per share (EPS) climbed to ₹1.77 in Q1FY23 which was ₹0.05 in Q1FY22.
In a report published on Thursday, the research analysts of the brokerage ICICI Securities stated that “The business has issued a statement about bonus issue on August 4, 2022. Two additional bonus equity shares are issued for every existing equity share, or in the ratio of 2:1, when bonus shares are issued. Expiration date for bonuses is today, September 15, and record date is September 16. We thus change our target price following this corporate decision to ₹135 per share. We keep the stock at BUY and assign Bharat Electronics a 30x P/E on FY24 EPS valuation.
The company’s 1) plan to expand into non-defence fields, emphasis on boosting exports, and share of the services market would benefit long-term growth and help derisk its business, they further noted. 2) A ₹55,333 crore order backlog as of June 2022’s end (3.3 times TTM sales). Strong order pipeline for FY23–24E, and three of the most significant orders are:
Major orders are anticipated in FY24E for the Himshakti Electronic Warfare (EW) system worth ₹3,200 billion, the Arudhra Radar system worth ₹3,300 billion, the Akash Prime from Bharat Dynamics system worth ₹4 billion, the EW system for Mi-17 helicopters system worth ₹1,500 billion, the electronic warfare systems for ships system worth ₹12,000 billion, and the quick reaction surface-to-air missile (QRSAM) system worth ₹20,000 billion and the medium range Army is in the process of accepting a post that has been designated as an Acceptance of Necessity (AoN).
Strong balance sheet and double digit returns ratios are the major drivers of the stock’s future price performance. We anticipate sales and EBITDA to expand at a CAGR of 18.5% and 20.1%, respectively, in FY22-FY24E.