Bharat Electronics Hits 52-Week High Before Q4 Results: Should You Buy, Hold or Book Profits?
BEL stock hits 52-week high ahead of Q4 results. Explore the earnings preview, Q4 performance, technical levels, and short covering trends to know if BEL is a buy or hold.
Introduction:
State-run defence electronics giant Bharat Electronics Ltd (BEL) is in the spotlight as its stock hit a fresh 52-week high, driven by strong expectations from the upcoming Q4 FY24 earnings and sustained investor confidence in the Make in India defence narrative. With the broader defence theme gaining traction and PSU stocks attracting fresh institutional interest, all eyes are on BEL’s financial performance and future growth strategy.
Q4 FY24 Earnings Preview & Summary:
Key Highlights
| Metric | Q4 FY24 (Est.) | Q4 FY23 (YoY) | Q3 FY24 (QoQ) |
|---|---|---|---|
| Revenue | ₹7,100-7,400 Cr | ₹6,479 Cr (+10-14%) | ₹4,162 Cr (+70% QoQ) |
| EBITDA | ₹1,900-2,000 Cr | ₹1,614 Cr (+20% YoY) | ₹893 Cr |
| PAT (Net Profit) | ₹1,350-1,450 Cr | ₹1,382 Cr (flat to +5%) | ₹611 Cr |
| EBITDA Margin | ~26-27% | 24.9% | 21.4% |
| Order Book | ₹70,000+ Cr | ₹60,500 Cr | ₹65,356 Cr |
Strong execution of defence contracts
Focus on indigenous systems (radars, communication, avionics)
Robust order inflow, including recent DRDO and armed forces contracts
Export push to friendly nations
🔸 Risks:
Margin pressure due to input costs
Delay in some large defence orders
High government dependency
Fundamental Analysis:
Company Strengths:
Zero-debt PSU with strong cash flows
Excellent return ratios: ROCE > 25%, ROE > 20%
Large order book visibility: over ₹70,000 Cr
Backed by a long-term government defence spending push
Dividend-paying with a healthy payout history
Valuation:
BEL is trading at ~35x TTM earnings, slightly above its 5-year average
PEG ratio (price/earnings to growth) remains moderate, indicating growth is supporting valuations
Reasonable valuation compared to private defence peers like Data Patterns and MTAR Tech
Technical Analysis:
BEL Stock Price Action:
52-week high: ₹287.40 (hit on May 17, 2025)
Current price: ₹283–285 range (volatile with positive bias)
Support levels: ₹270 and ₹255
Resistance levels: ₹290 and ₹300 (psychological barrier)
RSI: ~68 (near overbought but healthy trend)
50 DMA: ₹250 | 200 DMA: ₹215 — bullish crossover intact
Short-Term View (May Expiry):
Strong short covering seen around ₹265-275 in May futures
Option data shows maximum Call OI at ₹290 and Put OI build-up at ₹270
Expect volatility near expiry; breakout above ₹290 can trigger fresh long buildup
Future Outlook:
Near-term (3–6 months):
Stock may consolidate between ₹270–₹300 post Q4 results
Any order inflow announcement or export deals could act as a fresh trigger
PSU and defence basket remain a hot theme for 2025 due to the upcoming elections and national security focus
Medium to Long-Term (6–24 months):
Expected revenue CAGR of 15-18% driven by order execution and new product lines
Indigenous defence production and exports may drive BEL to new lifetime highs
Stock may target ₹320–₹350 over the next 12 months if order visibility and margins stay intact
Conclusion:
Bharat Electronics continues to be a compelling PSU defence story. Strong financials, a robust order book, and India’s focus on defence indigenisation support the bullish sentiment. While short-term volatility may persist around the Q4 results and expiry, long-term investors can continue to hold, and new investors may consider accumulating on dips toward ₹270.
Short-Term Traders: Watch ₹290 breakout for fresh longs
Long-Term Investors: Stay invested; target ₹320–350 in 1 year
Comments
Post a Comment