Shares of Bharat Electronics (NSE: BEL) surges over 13% in the last two weeks. Today, the stock has gained a little over 3% in intraday.
BEL has now marked a new all time high of ₹196 closing near its 52 week high. After 2020, this stock has never seen a single bearish phase.
From trading at ₹18 in 2020 to ₹195 4 years later, BEL has seen a massive bullish momentum soaring up by over 900%
Why Share price of BEL is rising
For us to know if the rise in Bharat Electronics is backed by improving fundamentals or its just a pump and dump rise, it’s important that we know exact reasons behind its rise.
Last few months have been quite good for BEL as they received multiple orders for their defence equipment. In December 2023, the company received an order worth ₹2,700 crore from an offshore client. An order totaling ₹4,878 crore was also backed by BEL which was placed by the Indian Army.
With over 75,000 crores of orders on BEL’s book, its share price continues to rise every new day. The Indian Government also increased its spending on the defence sector, which can further help defence companies earn more profits.
BEL, being a leading defence equipment manufacturer, will also benefit from Governments ‘Make in India’ push. The defence electronic giant has also performed quite well financially, with its Quarterly Net profit growing year on year.
Foreign Institutional Investors (FIIs) have also increased their stakes in Bharat Electronics Ltd. This is a positive sign as it boosts investors confidence when Institutions increase their stakes.
How is BEL's valuations at current price?
The average Price to earning (P/E) ratio of the defence sector is at 65x. Currently BEL is trading at a PE of 39x which is significantly below the industry average. This discrepancy seems unjustified given BEL’s strong growth prospects and impressive historical performance.
Experts forecast BEL’s earnings to grow at 14% annually, while the company has delivered an even higher earnings growth rate of 17% over the past five years. With such robust growth potential and a proven track record, BEL’s stock appears undervalued compared to its industry peers.
The market seems to be underappreciating BEL’s true value, presenting an attractive opportunity for investors seeking exposure to a company with promising growth prospects at a relatively cheaper valuation.
BEL Swing Trading forecast
| Bharat Electronics Swing Trading Forecast | Target Price (₹) |
|---|---|
| Forecast 1 | ₹197 |
| Forecast 2 | ₹205 |
| Forecast 3 | ₹213 |
| Forecast 4 | ₹224 |
| Forecast 5 | ₹240 |
BEL's returns generated for investors
| Timeframe | Returns Generated by BEL |
|---|---|
| 7 Day | 4.9% |
| 30 Day | 4.2% |
| 90 Day | 38.8% |
| 1 Year | 107.3% |
| 3 Year | 337.8% |
| 5 Year | 708.8% |
Conclusion
BEL is one such company that will greatly benefit from increased spending on budget and growing orderbook.
With high demand from foreign nations, the company can report more profits, further incresing its share price.
As we are at the end of the article, for long term investors, you can check BEL’s forecast upto 2030.
