Crorepati Stock, Defence PSU: 105877% RETURNS! Rs 10000 becomes Rs 1.06 crore

crorepati stock, defence psu: 105877% returns! rs 10000 becomes rs 1.06 crore | bharat electronics bel

Crorepati Stock, Defence PSU: A public sector undertaking (PSU) under the Ministry of Defence of India has delivered multibagger returns of 1,05,877 per cent over the last 25 years, multiplying its long-term investors’ wealth. The aforementioned PSU enjoys Navratna status and has a market cap of Rs 1,70,427.49 crore, as of April 19’s closing price.

The company in question is Bharat Electronics Ltd (BEL) and its shares in Friday’s trading session closed at Rs 233.30 on NSE.

Crorepati Stock: BEL Technical Analysis

On technical setup, BEL’s counter was last seen trading higher than its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day simple moving averages (SMAs). The scrip’s 14-day relative strength index (RSI) came at 71.66, trending from zero towards 100. Traditionally, a level below 30 is considered as oversold while a value above 70 is considered as overbought.

The company’s stock has a price-to-earnings (P/E) ratio of 47.75 against a price-to-book value (P/B) ratio of 10.88.

P/E ratio shows what the market is willing to pay today for a stock based on its past or future earnings. A high P/E ratio could signal that a stock’s price is high relative to earnings and is overvalued. Conversely, a low P/E could indicate that the stock price is low relative to earnings.

The P/B ratio is used to identify undervalued companies. P/B ratios under 1.0 are typically considered solid investments by value investors. A higher P/B ratio could indicate that the stock is overvalued, or that there is an expectation that it will perform well in the near future. On the other hand, a lower P/B ratio might suggest the stock is undervalued or that investors expect the company to generate less value than its peers.

Its Enterprise Value-to-Earnings Before Interest, Taxes, Depreciation, and Amortisation (EV/EBITDA) ratio stands at 35.33. Typically, EV/EBITDA values below 10 are seen as healthy. Many analysts believe EV/EBITDA ratio is a more reliable metric to gauge a company’s valuation as it also factors in the company’s debt and cash flows. Enterprise Value of a company is equal to its Market Cap plus its Debt and minus its Cash Flows.

Crorepati Stock: Rs 10,000 to Rs 1.06 crore

If someone had invested Rs 10,000 in BEL’s shares 25 years ago on January 1, 1999, when it traded at Rs 0.22 per share, given the whopping 1,05,877 per cent returns, their investment would have yielded a profit of Rs 1,05,87,700 or 1.058 crore.

So, including the initial investment of Rs 10,000, their total amount after 25 years would be Rs 1,05,97,700 crore or Rs 1.059 crore.

Bharat Electronics Order Book

As on April 1, 2024, the total order book of BEL stands at around Rs 76,000 crore, providing revenue visibility for the next couple of years. In the fiscal year 2023-24, BEL secured orders worth around Rs 35,000 crore.

The Defence PSU recently entered into a contract valued at Rs 847.70 crore with Larsen & Tourbo Limited (L&T) for the supply of 14 cutting-edge Communication and Electronic Warfare (EW) sensors and systems. These state-of-the-art systems, manufactured domestically by BEL, will be installed on three Cadet Training Ships for the Indian Navy.

Bharat Electronics Share Price Target 2024

Investment banking firm UBS has given ‘buy’ rating to Bharat Electronic limited stock.It has set the 12 month target price of the stock to Rs 257 apiece with an upside of 22 per cent in its March 06 report.

UBS in its reports views that BHE, at the top of the defence manufacturing value chain, should materially benefit from the expanding ecosystem of vendors, supported by the government’s import substitution and export penetration policy.

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