BEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.4
| Stock Code | BEL | Market Cap | 3,10,921 Cr. | Current Price | 425 ₹ | High / Low | 462 ₹ |
| Stock P/E | 52.2 | Book Value | 29.1 ₹ | Dividend Yield | 0.56 % | ROCE | 39.4 % |
| ROE | 29.5 % | Face Value | 1.00 ₹ | DMA 50 | 412 ₹ | DMA 200 | 384 ₹ |
| Chg in FII Hold | 0.37 % | Chg in DII Hold | -0.41 % | PAT Qtr | 1,590 Cr. | PAT Prev Qtr | 1,286 Cr. |
| RSI | 53.8 | MACD | 8.45 | Volume | 10,97,58,230 | Avg Vol 1Wk | 5,76,19,869 |
| Low price | 240 ₹ | High price | 462 ₹ | PEG Ratio | 1.69 | Debt to equity | 0.00 |
| 52w Index | 83.6 % | Qtr Profit Var | 20.8 % | EPS | 8.14 ₹ | Industry PE | 56.2 |
💹 Financials: Bharat Electronics Ltd (BEL) demonstrates strong fundamentals with ROE at 29.5% and ROCE at 39.4%, reflecting excellent capital efficiency. The company is debt-free (Debt-to-equity: 0.00), ensuring financial stability. Quarterly PAT rose from 1,286 Cr. to 1,590 Cr., showing a healthy 20.8% growth, which highlights improving profitability.
📊 Valuation: The stock trades at a P/E of 52.2, slightly below the industry average of 56.2, making it fairly valued relative to peers. The P/B ratio is ~14.6 (425/29.1), which is high but justified by strong return metrics. PEG ratio of 1.69 indicates valuations are reasonable compared to growth prospects. Dividend yield at 0.56% provides modest income return.
🏢 Business Model & Advantage: BEL operates in the defense electronics sector, manufacturing radar, communication systems, and other strategic equipment. Its competitive advantage lies in government contracts, technological expertise, and monopoly-like positioning in certain defense electronics segments. Strong order book visibility ensures sustained revenue growth.
📈 Overall Health: Financially robust with zero debt, high profitability, and strong growth momentum. RSI at 53.8 suggests neutral momentum, while MACD at 8.45 indicates positive trend continuation. Long-term fundamentals remain solid, supported by defense sector expansion and government focus on indigenization.
🎯 Entry Zone: Attractive entry around 400–420 ₹ range, near DMA 50 levels. Current price of 425 ₹ is reasonable given growth prospects. Long-term investors can accumulate and hold, as BEL offers strong fundamentals with sectoral tailwinds.
Positive
- Debt-free balance sheet enhances financial resilience.
- Strong ROE (29.5%) and ROCE (39.4%) indicate superior capital efficiency.
- Quarterly PAT growth of 20.8% shows improving profitability.
- Government-backed contracts ensure steady demand.
Limitation
- High P/B ratio (~14.6) suggests premium valuation.
- Dividend yield at 0.56% is modest.
- DII holdings decreased by -0.41%, showing reduced domestic institutional confidence.
Company Negative News
- Decline in DII holdings (-0.41%) indicates cautious stance by domestic institutions.
Company Positive News
- Quarterly PAT rose by 20.8%, reflecting strong earnings momentum.
- FII holdings increased by 0.37%, showing foreign investor confidence.
Industry
- Defense electronics industry is expanding due to modernization and government focus on self-reliance.
- Industry P/E at 56.2 suggests BEL is trading at fair valuation compared to peers.
Conclusion
BEL remains a fundamentally strong defense electronics company with robust return ratios, zero debt, and consistent earnings growth. Valuations are premium but justified by strong fundamentals and sectoral demand. Entry around 400–420 ₹ is advisable for long-term investors, with potential for sustained growth and value creation.
Would you like me to extend this into a comparative HTML report against HAL to highlight BEL’s relative strengths in defense electronics versus HAL’s aerospace focus?