Bharat Electronics down after Q3 profit disappoints but ICICI Securities sees 37% upside
The company's board on January 28 recommended an interim dividend of Re 0.60 per share (on face value of Rs 1 each) on the enhanced share capital of the company post Bonus Issue of equity shares in September 2022.
January 30, 2023 / 09:57 AM IST
Domestic research and broking firm ICICI Securities has maintained its buy rating on the stock with target of Rs 125 per share, an upside of over 37 percent from current market price.
Shares of Bharat Electronics (BEL) declined 4 percent in the first hour of trade on January 30 after the company declared its December quarter earnings.
The Navratna PSU firm missed estimates in terms of profitability during the third quarter of FY23 while higher raw material costs impacted the EBITDA margins.
However, revenue was in line with expectations. The company's board had on January 28 recommended an interim dividend of Re 0.60 per share (on a face value of Rs 1 each) on the enhanced share capital of the company after the bonus issue of equity shares in September 2022. The dividend will be payable to all the eligible shareholders holding shares as of the record date or February 10, 2023.
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At 9:29am, Bharat Electronics was quoting at Rs 91, down Rs 3.30, or 3.50 percent, on the BSE. It touched an intraday high of Rs 93.90 and an intraday low of Rs 89.75.
Domestic research and broking firm ICICI Securities has maintained its 'buy' rating on the stock with a target of Rs 125 per share, an upside of over 37 percent from the current market price.
"Despite order book at two-year low, we see upcoming opportunities across all segments- defence, civil and exports, to propel BEL’s growth. We maintain 'buy' on BEL stock with an unchanged target price of Rs 125 per share on 25x FY24 EPS. Slower-than-expected orderbook build-up is the key risk to our thesis," it said.
The research firm said cashflow pressures can be a downside risk. It expects these pressures to moderate in medium term with ease in defence budgetary allocation. Also, lower-than-expected accretion in defence capital budget is a key risk. It believes the probability is low given the heightened external threat perception.
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