ICICI Securities Analyst Sees This Large-Cap Stock Shooting Up 20%

Bharat Electronics Limited (BEL), a leading defense electronics company in India, continues to receive a steady inflow of orders, maintaining its strong position in the defense sector, an analyst said last week, highlighting his bullish stance.

The BEL Analyst: ICICI Securities analyst Amit Dixit has recommended to buy the stock with a price target of ₹150, indicating a 20.6% upside from the current market price.

This recommendation is maintained from Dixit’s previous note, reflecting his continued confidence in the company’s growth potential.

The BEL Thesis: According to Dixit, BEL has won incremental orders worth ₹21.9bn in addition to the ₹59bn won earlier in Q1FY24, taking the total order inflow for the quarter to ₹80.9bn.

This aligns with the management’s guidance of ₹200bn of order inflow in FY24.

Dixit expects the order book at Q1FY24-end to further improve compared to the record end-FY23 level. He also believes that the latest orders are smaller and pertain to platforms already in progress, which should allow for quicker execution through to FY25E.

Dixit maintains that BEL is the best play in the defense space, with a share in almost all the major upcoming orders over the next few years. He sees little risk to his estimate of revenue growth at 17% p.a. through to FY25E.

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Background: BEL bagged defence and non-defence orders worth ₹2,191 crore last week.

The orders include supplying long-range guidance kits with warheads, airborne jammers, battlefield short range surveillance radars upgrades, missile guidance radars, shallow water craft sonars and spares.

This came after the company received ₹5,900 crore worth of orders from the Navy in June.

Price Action: As of Thursday, BEL’s shares traded 2.18% higher at ₹124.4. The stock reached an intraday high of ₹124.45 and a low of ₹121.9.

BEL has a 52-week high of ₹127.35 and a low of ₹74.72.

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