Shares of Navratna PSU jumped around 7 percent in Wednesday’s trading session after reporting an increase in net profits by 111 percent QoQ. In just six months, the stock has given more than 90 percent returns to its shareholders.
With a market capitalization of Rs. 2,00,800 crores, the shares of Bharat Electronics Ltd started Tuesday’s trading session on a higher note at Rs. 283, gaining around 7 percent, also recorded as the company’s fresh 52-week high compared to its previous close of Rs. 258 apiece and are currently trading at Rs. 275 apiece.
Such a bullish movement in the share price was observed after the company announced quarterly and financial year ended 31st March 2024 results. Quarterly, the revenue zoomed by 107 percent from Rs. 4,142.27 crores during the December quarter to Rs. 8,564.08 crores in the March quarter. In addition, the net profits magnified by 111 percent from Rs. 848.12 crores to Rs. 1,785.66 crores during the same period.
Comparing these metrics on a YoY basis, the revenue increased by 35 percent from Rs. 6,344.65 crores during Q4FY23 to Rs. 8,564.08 crores in Q4FY24. On the other hand, the net profits increased by 31 percent from Rs. 1,366.38 crores to Rs. 1,785.66 crores during the same timeframe.
As of 1st April 2024, the order book position of the PSU company, stood at Rs.75,934 crores. Additionally, the Board of Directors recommended a Final Dividend of Rs.0.80 per Equity share (having a face value of Rs.1 each). The same is subject to the approval by the Shareholders in the ensuing Annual General Meeting of the company.
Furthermore, global brokerage firm Jefferies has maintained a ‘buy’ rating on the BEL stock following its strong earnings and has also raised its target price to Rs. 305 per share having a potential upside of 11 percent from the stock’s current price.
Jefferies analysts expect BEL to see double-digit revenue growth from FY24 to FY26. It added that margin strength gives confidence in profitability sustaining.
Moreover, Morgan Stanley has an ‘overweight’ rating on BEL and a revised upward target price of Rs. 300 per share. The brokerage expects some operational efficiencies to remain sticky while raising its EBITDA margin estimates to 24 to 24.5 percent as against 22.5 to 23 percent earlier.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 21.53 percent during FY 22-23 to 24.40 percent in FY 23-24, and, the return on capital employed (RoCE) zoomed from 26.38 percent to 30.13 percent during the same timeframe. Additionally, the net profit margin increased from 16.57 percent during FY22-23 to 19.45 percent during FY23-24.
Headquartered in Bengaluru, Bharat Electronics Ltd was incorporated in 1954. The company is engaged in the business of designing, manufacturing and supplying electronic equipment and systems for the defence and civilian markets in India. Its product portfolio includes defence communication products, naval systems, land-based radars, avionics, electro-optics, tanks, etc.
Written By Vaibhav Patil
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