India used to be one of the top importers of defence technology, however, over the past few years, the country has concentrated on lowering its reliance on foreign defence imports with programs like “Make in India” and “Atmanirbhar Bharat.”
The government’s focus on import substitution, indigenization, and export growth has significantly propelled the defence industry, leading to a 15 percent compound annual growth rate (CAGR) in the turnover of India’s defence industry.
Listed below is a fundamentally strong defence stock with an order book of upto Rs. 33,000 Crores, with a potential upside of upto 20 percent that you can add to your portfolio
Bharat Electronics Limited (BEL) is a Navratna central public sector enterprise that operates in the aerospace and defence sector, it primarily manufactures advanced electronic products for ground and aerospace applications.
With a market capitalization of Rs. 1,47,584 Crores, the shares of Bharat Electronics Limited were trading at Rs. 200, up 1 percent from its previous day’s close price of Rs. 199.40.
The company’s product portfolio includes defense communication products, electronic warfare systems, avionics, land-based radars, naval systems, tank and armored fighting vehicle electronic systems, electro-optics, and many more.
As per the latest press release of Bharat Electronics Limited it has a strong accumulated order book totaling Rs. 32,716.33 Crores and it expects to have an inflow of orders worth Rs 50,000 crores in the coming two years.
Some of the orders recently received by the company are for the supply of 14 cutting-edge Communication and Electronic Warfare (EW) sensors and systems worth Rs. 847.70, to be installed on three Cadet Training Ships for the Indian Navy.
Signing a contract worth Rs. 2,167.47 Crores with the Indian Navy for the supply of state-of-the-art indigenously designed and developed EW suite for use onboard warship
ICICI Direct has given a ‘Buy’ tag on the company’s stock with a target price of Rs. 240, with a potential upside of 20 percent from its current market price of Rs. 200.
The rationale behind providing such a recommendation pertains to the increasing necessity of modernized indigenous defence platforms, healthy order-book position, and robust order
pipeline among others.
Furthermore, the company has provided guidance on its capital expenditure (Capex) which, for FY24, stands at around Rs 700 crores. For the coming couple of financial years, the company plans a capex of Rs 800 crores.
Its revenue from operations grew by 0.21 percent from Rs. 4,153 Crores in Q3FY23 to Rs. 4,162 Crores in Q3FY24, accompanied by increasing profits of Rs. 614 Crores to Rs. 860 Crores.
Written by:- Bharath K.S
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