If you are considering investing in BEL stocks but are still determining whether it is a good idea, we are here to help. For a long time, BEL has been a popular choice among all investors and investment advisory firms. So, diving deeper into its financials is undoubtedly worthwhile.
In this post, we will examine financial performance to determine why BEL stocks pique the curiosity of every investor. Let’s get this party started.
Highlights of BEL’s Glorious History
Bharat Electronics Limited (BEL), founded in 1954, carries a legacy of more than six decades of excellence and innovation. Since then, Bharat Electronics Limited (BEL) has grown to become India’s leading electronics engineering company, with a strong presence in the defence, aerospace, and civilian sectors.
Before making any buy decision on BEL stocks, it’s pertinent to study its financial performance.
Let’s take a brief tour of some of the glorious milestones in BEL’s history:
- In 1966, BEL set up its radar manufacturing facility, marking its entry into the strategic defence domain.
- In 1989, BEL manufactured the first batch of electronic voting machines, revolutionizing India’s electoral process.
- In 1999, BEL achieved a new milestone of becoming a mini-ratna company.
- In 2007, BEL was conferred the Navratna status by the Government of India, giving it more autonomy and flexibility in its operations.
- In 2020, BEL achieved a turnover of ₹ 17,333 crore (in FY 2022-23), registering a growth of 15.22% over the previous year, despite the challenges posed by the COVID-19 pandemic.
BEL’s Financial Performance: An Overview
BEL stocks have shown steady growth in its revenue, net profit, and earnings per share (EPS) in the last five years. The table below summarizes BEL’s key financial indicators from FY 2018-19 to FY 2022-23.
| Financial Year | Revenue (in Rs. Crores) | Profit/Loss After Tax (in Rs. Crores) | EPS (in Rs.) |
|---|---|---|---|
| Mar 19 | 12,254.14 | 1,927.29 | 7.91 |
| Mar 20 | 13,023.05 | 1,793.83 | 7.36 |
| Mar 21 | 14,189.93 | 2,065.42 | 8.48 |
| Mar 22 | 15,547.35 | 2,348.93 | 9.64 |
| Mar 23 | 18,006.72 | 3,006.67 | 4.11 |
BEL stocks have achieved a compound annual growth rate (CAGR) of 8% in revenue and 9.30% in PAT in the last five years.
Google sheet Link:https://docs.google.com/spreadsheets/d/1eZt0aJW4s9gaP7z7e18HRajkQ9O-5ULvsjKxNI5oHUI/edit?usp=sharing
Canva Link: https://www.canva.com/design/DAF00b-Pcv0/B3UYfWxDMlMSSjcgRHTsBQ/edit?utm_content=DAF00b-Pcv0&utm_campaign=designshare&utm_medium=link2&utm_source=sharebutton
It shows that BEL stocks have been able to raise their sales, improve their margins, and increase their profitability over time, delivering value to their investors through stable dividend earnings over the long term.
Explained: The BEL Stocks Growth Story
- One of the main drivers of BEL’s revenue growth is its diversified product portfolio, which caters to various segments of the defence and civilian markets.
- Another factor is its strong order book, which reflects its competitive edge and customer loyalty. As of April 1, 2023, BEL had an order book of Rs. 60,690 crore, equivalent to three times its annual revenue.
This provides high visibility and stability to BEL’s future revenue stream. Moreover, BEL has been winning new orders from domestic and international customers, which indicates its ability to fulfill the changing needs and market expectations.
- BEL has invested in research and development to augment its tech capabilities and create new products and solutions. BEL stocks reinvest about 6% of its annual revenue in R&D to ensure high-quality deliverables.
It shows BEL’s commitment to innovation and quality improvement.
- BEL stocks make a good investment option because of their healthy profits and low leverage. BEL is making conscious efforts to reduce its operational expenses, such as automation, digitization, lean manufacturing, and energy conservation.
It translates to a PAT/Operating Income growth from 14.9% in FY 21 to 15.6% in FY 22.
- BEL’s EPS growth results from its net profit growth and prudent capital management. With a government stake of 51.14 %, BEL has been rewarding its shareholders with regular dividends and bonus issues.
The Bottom Line
Based on the above financial analysis of BEL stocks, we can conclude that BEL is a fundamentally strong and financially sound business with a proven growth and profitability.
BEL stocks enjoy a favorable outlook from almost every investment advisory, as it is well-positioned to benefit from the increasing demand for defence and civilian electronics in India and abroad.
As a result, BEL stocks are an excellent long-term investment option for those seeking consistent returns, regular dividend income, and capital appreciation.
However, only some investments are suitable for some investors. Conduct an independent analysis to determine whether investing in BEL stocks fits your financial goals, risk tolerance, and expected return.