Multibagger stock gave negative returns in a month; price targets for the defence stock

Shares of Bharat Electronics Ltd (BEL) have delivered negative returns in a month. The multibagger defence stock fell 2% compared to a 2.39% rise in the benchmark BSE 100 index during the period. On the other hand, BEL shares have gained 115% in a year and risen 174% in two years. The stock saw a stellar rally of 369% in three years. Shares of the debt-free firm were trading on a flat note at Rs 296.80 on Monday against the previous close of Rs 299.40 on BSE. Market cap of the PSU firm stood at Rs 2.16 lakh crore.

Total 9.05 lakh shares of the firm changed hands over the counter amounting to a turnover of Rs 26.93 crore on BSE.

In terms of technicals, the relative strength index (RSI) of BEL stock stands at 46.2, signaling it's trading neither in the overbought nor in the oversold zone. BEL shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day but higher than the 100 day, 150 day and 200 day moving averages.

Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets has a buy call with a price target of Rs Rs 347-371. Stop Loss can be fixed at Rs 275.

“We are observing a pullback of the prior uptrend and BEL is approaching the strong demand zone of Rs 285 to Rs 280 on the daily chart. The stock is trading sideways and is giving no clear direction of trend at present. However, the stock is outperforming the benchmark indices. Further, the RSI is positively poised. Hence, a pullback rally is in offing. Hence, one can buy the stock at current levels with a stop loss of Rs 275 for a target Rs 347–371 levels in a couple of weeks,” said Vasudeo.

 Brokerage Sharekhan has a price target of Rs 380 on the PSU stock. It has maintained Buy call on the stock. “BEL has exceeded its FY2024 order intake guidance. The company’s future order pipeline is also promising as orders worth Rs. 65,000 crore (including QRSAM) are to be awarded in the next two years. We believe BEL would play a significant role in successfully implementing the government’s Make in India and AtmaNirbhar Bharat initiatives, as it is a key defence and aerospace player,” said the brokerage.

Bharat Electronics manufactures and supplies electronic equipment and systems to defence sector.