Defence stock jumped up to 7% after bagging orders worth ₹ 2118.57 Cr from Cochin Shipyard

Shares of a defence company appreciated to the tune of 7 per cent on Monday’s early trades to reach an intraday high of ₹ 145.00 apiece on the National Stock Exchange (NSE). This happened after the company bagged orders worth approximately ₹ 3,005 crores. Its shares settled at ₹ 140.05 apiece, up 3.21 per cent 

According to an exchange filing, Bharat Electronics Ltd has received an order of ₹ 2118.57 crores from Cochin Shipyard Ltd for the supply of various equipment consisting of sensors, weapon equipment, fire control systems and communication equipment for six Next Generation Missile Vessels (NGMV), a class of anti-surface warfare corvettes for the Indian Navy. 

The company has also received additional orders worth ₹ 886.00 Crore since the last disclosure on 25th August 2023 and the said orders pertain to the upgrade of AFNET SATCOM N/W, Upgrade of Akash Missiles with RF Seeker, Inertial Navigation System and other equipment with accessories and spares and so on. 

With this BEL has received orders worth ₹ 14,384 Crore till now in the financial year 2023-24. 

BEL manufactures and supplies electronic equipment and systems for the defence as well as non-defence markets. It manufactures electronic products for the army, navy and the airforce. Moreover, it offers services for the design and manufacture of optical and optoelectronic products and components operating in the UV, visible and IR spectrum. 

With a market capitalization of ₹ 1,02,264 crores, Bharat Electronics is a small-cap company. It has a high return on equity of 28.01 per cent and an ideal debt-to-equity ratio of 0.00. Its shares were trading at a price-to-earnings ratio (P/E) of 32.38, which is lower than the industry P/E of 33.63, indicating that the stock might be undervalued as compared to its peers. 

The company’s promoters hold a 51.14 per cent stake in it, followed by mutual funds with 19.33 per cent, foreign institutions with 17.35 per cent, retail investors with 7.89 per cent and other domestic institutions with 4.29 per cent. 

Written by Simran Bafna 

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