Bharat Electronics shares jump 7% on winning orders worth ₹3,000 cr

Shares of Bharat Electronics Limited (BEL) surged nearly 7% in early trade on Monday after the state-owned company said that it has bagged orders worth ₹3,000 crore. The share price of the aerospace and defence electronics company has witnessed stellar rally in the calendar year 2023, thanks to strong order pipeline as well as its strategic position as a dominant supplier of electronic equipment to the Indian defence forces.

Boosted by the development, BEL shares gained as much as 6.85% to hit a high of ₹145 against the previous closing price of ₹135.7 on the BSE. The stock trades close to its 52-week high of ₹147.2 touched on September 11, 2023. The PSU stock has risen 67% against its 52-week low of ₹87 touched on January 30, 2023.  

The counter has given 27% returns in the last one year, while it gained nearly 40% in the calendar year 2023. The largecap stock has climbed 51% in six months and 10% in the last month.

“Bharat Electronics Limited received an order of ₹2,118.57 Crore from Cochin Shipyard Limited for the supply of various equipment consisting of Sensors, Weapon equipment, Fire Control systems, and Communication equipment for six numbers of Next Generation Missile Vessels (NGMV), class of anti-surface warfare corvettes for Indian Navy,” the PSU company said in a BSE filing on September 15.

This project will have the participation of Indian electronics and associated industries, including MSMEs, which are sub vendors of BEL, adding that the equipment manufactured by BEL will be part of 'Aatmanirbhar Bharat' program.

Besides, the company has also received additional orders worth ₹886 crore since the last disclosure on August 25, 2023 and the said orders pertain to upgrade of AFNET SATCOM N/W, upgrade of Akash Missiles with RF Seeker, Inertial Navigation System and other equipments with accessories and spares etc.

Overall, BEL has received orders worth ₹14,384 crore till now in the financial year 2023-24.

Last week, the Defence Ministry’s Defence Acquisition Council (DAC) approved nine capital acquisition proposals worth ₹45,000 crore, which will be procurements from Indian vendors, including BEL, in line with the government’s ‘Aatmanirbhar Bharat’ push.

Earlier in August this year, the defence ministry approved capital acquisition proposals worth around ₹7,800 crore for the armed forces.

According to analysts at ICICI Securities, BEL could benefit from these defence orders. The brokerage has maintained a ‘BUY’ call on BEL with a target price of ₹150. “BEL is best placed among our covered companies, bolstered by the company’s direct or indirect participation in almost every major platform for which orders have been placed or AoN issued.” The brokerage in its report says that in the current proposal of ₹7,800 crore, BEL’s share would be around ₹2,800-3,000 crore from EW suite and others,” it said in a report released last month. 

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