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Shares of Bharat Electronics Ltd (BEL) saw a significant rise on Monday, following the announcement that the company had secured defense orders worth Rs 3,000 crore. The company’s shares gained 6.85% to Rs 145 ($1 = Rs 83.05) in early trade against the previous close of Rs 135.70 on BSE, bringing the firm’s market cap to Rs 102,000 crore (Rs 1 crore = $120,409).
The Bengaluru-based state-owned company’s stock surged by as much as 7% to hit an intraday high of Rs 145, inching closer to its 52-week high of Rs 147 per share recorded on September 11, 2023. The stock has risen by 25.90% in one year and gained 39.65% since the start of this year.
The defense orders include a Rs 2,118.57-crore order from Cochin Shipyard Limited for the supply of various equipment for six next-generation missile vessels for the Indian Navy. Additional orders worth Rs 886 crore were also received for the upgrade of AFNET SATCOM N/W and Akash missiles among other equipment.
These latest contracts have brought the company’s order book for FY24 to Rs 14,384 crore. In addition to these recent contracts, the company said it received new defense and non-defense orders worth Rs 3,289 crore during July and August 2023.
BEL reported a rise in profit of 23% to Rs 530.84 crore in the June quarter compared with Rs 431.49 crore in the same quarter last year. Revenue climbed to Rs 3510.8 crore, up by 12.8% against Rs 3112.8 crore in the corresponding quarter last year.
The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) also known as operating profit zoomed 29.4 per cent to Rs 664.4 crore, from Rs 512.5 crore in the same quarter last year. The EBITDA margin jumped 240 basis points to 18.9 per cent against 16.5 percent in the corresponding period in the previous fiscal.
In terms of technicals, the relative strength index (RSI) of BEL stock stands at 51.3, signaling it’s trading neither in the overbought nor in the oversold zone. BEL shares have a beta of 1.2, indicating high volatility within a year. The shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The participation of Indian electronics and associated industries, including MSMEs which are sub vendors of BEL, is expected in the project secured from Cochin Shipyard Limited.
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