In a notable move within the aerospace and defense industry, Bharat Electronics (BEL) is gearing up to turn ex-dividend, offering shareholders a compelling 70% payout. The company, renowned for its significant dividend yield in the defense segment, has garnered attention from brokerages, with buy recommendations and a target price reaching Rs 210 per share.
BEL Share Price and Market Performance:
As of the latest market update, BEL shares closed at Rs 184.50 apiece, reflecting a 0.60% increase. The company boasts a substantial market capitalization of Rs 1,34,865.42 crore, showcasing its prominence in the defense sector. BEL shares have witnessed an impressive 109% surge from their 52-week low of Rs 88.30, underlining their resilience and growth trajectory.
Dividend Declaration and Record Date:
BEL’s regulatory filing indicates the declaration of an interim dividend of Rs 0.70 per equity share of Rs 1 each fully paid-up, translating to a 70% payout for the financial year 2023-24. Shareholders can anticipate the interim dividend payout within 30 days from the declaration date. The Record Date for this dividend is set for February 10, 2024, making February 9 the ex-dividend date.
Dividend Yield and Past Performance:
With a current dividend yield of 0.98%, BEL stands out among its peers in the defense segment. In 2023, the company distributed dividends totaling 180%, amounting to Rs 1.8 per share, showcasing its commitment to rewarding shareholders.
Brokerage Recommendations and Target Prices:
Several leading brokerages have expressed bullish sentiments on BEL, highlighting its positive outlook and growth prospects. The highest target price on BEL stands at Rs 210 per share, reinforcing the confidence in the stock’s potential.
Key Brokerage Perspectives:
- JM Financial:
- Recommendation: BUY
- Target Price: Rs 210
- Rationale: Positive outlook based on robust order inflows, strong order book, margin improvement, and improving return ratios. Anticipated Revenue/EPS CAGR of 17%/19% over FY23-26E.
- Prabhudas Lilladher:
- Recommendation: HOLD
- Target Price: Rs 182
- Rationale: Positive on BEL’s long-term growth story, considering a strong order backlog, diversification into non-defense verticals, and government initiatives. Downgraded to ‘Hold’ based on current valuation.
- Elara Capital:
- Recommendation: ACCUMULATE
- Target Price: Rs 195
- Rationale: Raised EPS estimates and target price on strong inflows and higher other income. Reiterated Accumulate with an earnings CAGR of 22% in FY23-26E.
In Shorts: BEL’s Defensive Prowess: A 70% Payout and Bullish Broker Calls Shape Promising Outlook”
Bharat Electronics’ upcoming ex-dividend status, coupled with favorable brokerage recommendations and an ambitious target price, positions it as an attractive investment opportunity in the defense sector. Shareholders can expect to benefit from both dividend payouts and potential capital appreciation as BEL continues to navigate a promising trajectory in the aerospace and defense industry.
