BEL shares: Two factors that pushed the defence stock to record high today

Shares of Bharat Electronics Ltd (BEL) hit a record high today after the PSU defence firm said it has won orders worth Rs 4878 crore. Sentiments were also positive around the stock after brokerage firm UBS raised the target price to Rs 205.

BEL shares gained 3.81% to a high of Rs 170.15 on BSE. Later, they closed at Rs 169.30, gaining 3.29% on BSE.

The share has gained 63.89% in one year and risen 68.88% since the beginning of this year. Total 17.47 lakh shares of the firm changed hands amounting to a turnover of Rs 29.80 crore on BSE. Market cap of the firm rose to Rs 1.23 lakh crore.

The stock fell to a 52-week low of Rs 87 on January 30, 2023.

In terms of technicals, the relative strength index (RSI) of BEL stock stands at 76.6, signaling it's trading in the overbought zone. BEL shares have a beta of 0.2, indicating very low volatility in a year. BEL shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Also read: BEL shares hit record high as defence firm wins Rs 580 crore order from Indian Army

Bharat Electronics Limited received an order of Rs 4522 crore from Indian Army for the supply of fuses for various calibres.

The company has also received additional orders worth Rs 356 crore . The orders relate to other products like EW (Electronic Warfare) Testers, Medical Systems (Exports), Consumables and Batteries for Electronic Voting Machines (EVMs), Night Vision Devices Spares and Services

Meanwhile, brokerage firm UBS has raised the target price to Rs 205 for the defence sector stock.

In line with their preference for state-owned defence enterprises, they remain bullish on Bharat Electronics’ (BEL) growth/returns, analysts at UBS said.

Improving earnings growth visibility and an expanding order pipeline justified the premium valuation. The analysts raised the target price to Rs 205, recognising potential upgrades to new orders over the next three to five years, and exports.

The company has an identified long-term pipeline in excess of Rs 2 trillion, which saw upward revision as more projects got added, according to the brokerage.

"A prime beneficiary of an expanding defence manufacturing ecosystem, coupled with BEL’s consistent and significant investments in R&D and capex should bolster its competitive edge, allowing exports potential as a tier-1 company," the brokerage said.

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