JPMorgan Predicts 26% Surge in This ‘Navratna’ PSU Stock—Buy Before It Retests Record Highs!

Bharat Electronics Limited (BEL) has announced its first interim dividend of ₹1.50 per share (150%) for FY 2024-25, with a record date of March 11, 2025. Investors holding shares by March 10, 2025, will qualify for the payout, which will be disbursed within 30 days. In FY 2023-24, BEL paid a total dividend of ₹2.20 per share, up from ₹1.80 in FY 2022-23, reflecting consistent shareholder returns. As of March 7, 2025, BEL’s stock closed at ₹277, with JPMorgan maintaining an “overweight” rating and setting a target price of ₹343, indicating a potential 26% upside.

The firm expects BEL to achieve a 15% revenue CAGR and 16% profit CAGR from FY 2024 to 2027, supported by strong defense sector investments. The company’s order book stands at ₹13,000 crore for FY 2025, with expectations to reach ₹25,000 crore, including potential new orders worth ₹12,000 crore. Currently trading at 36x FY 2026 earnings, down from its peak P/E of 52x, BEL remains an attractive investment with a strong return on equity (over 25%) and a key role in India’s defense capital expenditure growth.

JPMorgan Predicts 26% Surge in This ‘Navratna’ PSU Stock—Buy Before It Retests Record Highs!

BEL Announces Interim Dividend for FY 2024-25: Key Details

Bharat Electronics Limited (BEL), a leading defense public sector company, has declared its first interim dividend of 150% (₹1.50 per share) for the financial year 2024-25. The announcement, made on March 5, 2025, includes a record date of March 11, 2025, to determine shareholder eligibility. Investors holding shares by the end of March 10, 2025—the last trading day before the ex-dividend date—will qualify for the payout.

The dividend is scheduled for disbursement within 30 days of declaration. This move aligns with BEL’s history of rewarding shareholders consistently, even as it invests in scaling its defense manufacturing capabilities. Interim dividends are often viewed as a sign of financial strength, reflecting the company’s confidence in maintaining liquidity while pursuing growth objectives.

Historical Dividend Trends

In FY 2023-24, BEL distributed a total dividend of ₹2.20 per share, up from ₹1.80 per share in FY 2022-23. This upward trend underscores the company’s ability to deliver shareholder value despite macroeconomic challenges. Over the last five years, BEL has maintained an average dividend payout ratio of 45-50%, showcasing a disciplined capital allocation strategy. The company’s dividend growth has been supported by steady cash flows from long-term defense contracts and efficient execution of orders.

BEL Share Performance and Market Outlook

As of March 7, 2025, BEL’s stock closed at ₹277 per share on the BSE, rising 1.54% in the previous session. Despite an 8% year-to-date decline, global brokerage firm JPMorgan remains optimistic, reiterating an “overweight” rating with a target price of ₹343—a 26% upside potential. The firm highlights BEL’s strategic position in India’s defense sector, driven by anticipated revenue and profit growth. Historically, BEL’s stock has demonstrated resilience during market volatility, given its role as a primary supplier to India’s armed forces, ensuring stable demand.

Growth Projections and Analyst Confidence

JPMorgan forecasts a 15% revenue CAGR and 16% profit growth for BEL between FY 2024 and 2027, supported by robust defense spending. India’s defense budget, which surged to ₹6.2 lakh crore ($75 billion) in FY 2024-25, is expected to fuel BEL’s order pipeline. The company’s current order book stands at ₹13,000 crore for FY 2025, with management targeting ₹25,000 crore by year-end. Key projects include advanced radar systems, naval communication suites, and missile guidance technologies. Analysts anticipate near-term catalysts from potential orders worth ₹12,000 crore, including a ₹3,500 crore contract for electronic warfare systems.

Investment Rationale

BEL’s valuation, currently at 36x FY 2026 earnings, appears attractive compared to its peak P/E of 52x. The company’s return on equity (RoE) of over 25%—among the highest in the defense PSU sector—reflects its operational efficiency. With India prioritizing self-reliance in defense manufacturing under initiatives like “Make in India” and “Atmanirbhar Bharat,” BEL is well-positioned to capitalize on $130 billion worth of planned defense modernization projects by 2030. Its partnerships with global tech firms for indigenous production further enhance its growth prospects.

Strategic Positioning and Risks

BEL’s dominance in critical defense segments—such as avionics, missile systems, and cybersecurity—gives it a competitive edge. However, investors should monitor risks such as delays in government contracts, supply chain bottlenecks, and geopolitical tensions affecting defense budgets. The stock’s recent correction offers a strategic entry point for long-term investors, especially as the company is expected to play a pivotal role in India’s border security and space defense programs.

In summary, BEL’s interim dividend announcement, coupled with strong growth visibility and favorable sector tailwinds, reinforces its status as a cornerstone of India’s defense infrastructure. Investors are advised to leverage dips for accumulation while keeping an eye on order announcements and policy developments.