Author: Eqwires

Brokerage firm JPMorgan retailed its “overweight” rating on state-run Nifty 50 constituent Bharat Electronics Ltd. (BEL) on Friday, March 7.

JPMorgan has a price target of ₹343 on Bharat Electronics, which implies a potential upside of 26% from current levels. The price target also implies that BEL has the potential to retest its recent peak of ₹340 from where it has corrected.

The brokerage wrote in its note that a 20% correction from the peak, presents a good entry opportunity in the Navratna PSU due to the structural growth in defence capex in India. BEL is the most diversified and consistent play on this theme, according to JPMorgan.

BEL’s revenue, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and Profit After Tax (PAT), is likely to grow at a Compounded Annual Growth Rate (CAGR) of 15%, 17% and 16% respectively along with an average Return on Equity (RoE) of over 25% over financial year 2024-2027, according to JPMorgan, who called these estimates “compelling.”

The stock is also now trading at a financial year 2026 and 2027 price-to-earnings multiple of 36 times and 31 times respectively, which is down from the peak one-year forward price-to-earnings multiple of 52 times.

Bharat Electronics on Thursday announced new orders worth ₹577 crore, taking the total order inflow for financial year 2025 to over ₹13,000 crore. However, the figure is still well below the company’s guidance for financial year 2025 of ₹25,000 crore.

JPMorgan though believes that there is a high possibility of the company announcing order wins worth over ₹12,000 crore by March 31, which is just three weeks from now, and that, according to the brokerage, will act as a near-term catalyst for the stock price.

Out of the 26 analysts that have coverage on Bharat Electronics, 23 of them have a “buy” rating on the stock, one has a “hold” rating, while two others have a “sell” recommendation.

Shares of Bharat Electronics ended 0.9% lower on Thursday at ₹272.5. The stock has declined 8% so far in 2025.

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Shares of Reliance Industries (RIL) surged as much as 1.9% to ₹1,198 apiece on the NSE in the opening deals on Thursday, March 6, after Jefferies, the global investment bank and financial services company, released its report on the oil-to-telecom conglomerate.

Jefferies said that RIL’s underperformance compared to the benchmark NIFTY50 index is due to a slowdown in retail and subdued earnings in the O2C business.

In the past 12 months, RIL’s stock price has fallen 21% while the NSE’s NIFTY50 index has slipped less than 1%. Moreover, shares of the company (as of Wednesday’s close) are trading 37% lower from its all-time high level of ₹1,608.80, touched on July 8, 2024.

According to a report by The Economic Times that was published in August 2024, as many as 12 listed lifestyle, grocery retailers, and quick-service restaurants (QSRs) cut their workforce by around 26,000, reversing the hiring surge of the previous two financial years as they slowed down store expansion in response to declining demand.

According to their annual reports, this reduction was primarily driven by five major retailers—Reliance Industries’ retail division, Titan, Raymond, Page, and Spencers—which collectively saw their workforce shrink by 17% or 52,000 employees. This figure includes both permanent and contractual staff and accounts for attrition in the retail sector, the second largest employer after agriculture. The total workforce for these retailers dropped to 429,000 in FY24 from 455,000 the previous year.

Jefferies added that pessimism around RIL seems extreme, with the current market capitalisation implying a $48 billion enterprise value for retail vs. $106 billion in the last funding round, as per news reports.

Jefferies further said that the combination of same-store sales growth (SSG) and area addition should restore 15% growth in retail in FY26.

It further said that a tariff hike, listing of Jio, and improvement in O2C profitability are other potential triggers for the stock.

RIL Q3 FY25 Results

RIL reported a 7.4% rise in its December quarter (Q3 FY25) net profit as the retail business rebounded, telecom earnings surged on higher tariffs, and the mainstay oil and petrochemicals business delivered consistent performance.

Its consolidated net profit came in at ₹18,540 crore, or ₹13.70 per share, in October-December—the third quarter of the April 2024 to March 2025 fiscal (FY25)—compared to ₹17,265 crore, or ₹12.76 a share, logged in the same period a year back, according to a company statement.

Profit was also up sequentially from ₹16,563 crore in the July-September quarter.

The profit before tax (EBITDA) rose 7.8% to ₹48,003 crore. This was despite an almost 7% rise in finance cost due to higher debt (₹3.5 lakh crore as of December 31, 2024, compared to ₹3.36 lakh crore in September and ₹3.11 lakh crore in December 2023).

The oil-to-chemical business, which houses the company’s twin refineries at Jamnagar in Gujarat and petrochemical plants, saw EBITDA rise 2.4% to ₹14,402 crore.

The refineries processed more crude, and petchem margins improved.

In the fuel retail business, Jio-bp—its joint venture with BP of the UK—posted “the highest ever quarterly sales across both petrol and diesel,” the statement said.

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Gensol Engineering Chairman and Managing Director Anmol Singh Jaggi, in an exclusive interaction with CNBC-TV18 on Thursday, March 6, said that the company’s promoters will look to buy shares of the company from the open market soon.

However, he did not share a timeline as to when they plan on doing so.

“I think we will be surely doing it (buying shares from the market). I cannot confirm the timeline of doing this, whether today, tomorrow, or next week, but it will be done soon,” Jaggi said.

Jaggi also spoke of outstanding warrants that have been paid in part. These warrants were issued at ₹870 per share and promoters had committed to put in ₹130 crore through this issue. He said that 25% or close to ₹30 crore has been paid with the remaining ₹100 crore in the balance. From that price, shares of Gensol are down over 60%.

“I think either we will, to regain the trust of our customers, will go ahead with the open market purchase or we will go ahead and infuse the liquidity into the business by subscribing to our warrants. But like I mentioned, I do not have exact timeline on it as we speak, but over the weekend or over the next week, we will be taking concrete steps on this,” Jaggi added.

Jaggi also denied any wrongdoing in response to ratings agency ICRA’s allegation of falsification of loan repayment documents.

“There has been zero wrongdoing, as far as we are aware, and we will continue to work with high ethical standards,” Jaggi said, adding that an independent committee has been formed to verify the allegations. “We are committed, we are strong and we will bounce back,” Gensol’s Chairman & MD said.

Despite the clarifications from Jaggi, shares of Gensol Engineering continue to remain in a 10% lower circuit. The stock was down in a 10% circuit on Wednesday as well after its circuit limit was revised down from 20% earlier.

Shares of Gensol Engineering are down 70% from their peak of ₹1,124.

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Shares of paints, chemicals and aviation companies were trading in the green today after brent crude oil prices fell to their four-year low. Brent crude oil prices declined to their lowest level today since January 2021. Brent crude oil slipped to $69.4 per barrel, boosting sentiment around paints, chemicals and aviation stocks. Meanwhile, the price of the main US crude contract, fell four percent to $65.53.

Crude oil and crude oil derivatives are key raw materials used in the paints, chemicals and aviation industries.

Here’s a look at stocks that majorly benefited from the fall in crude prices in today’s session.

Paints stocks

Shares of market leader Asian Paints Ltd rose 4.5% intraday to Rs 2,259 against the previous close of Rs 2,65.25 on BSE. The large cap stock opened higher at Rs 2192.95. Market cap of the firm climbed to Rs 2.16 lakh crore.

Berger Paints India Ltd shares climbed 3.51% intraday to Rs 501.20 against the previous close of Rs 484.20 on BSE. The large cap stock opened higher at Rs 485.05. Market cap of the firm climbed to Rs 58,259 crore.

Kansai Nerolac Paints stock too climbed 3.16% to Rs 236. The paints stock opened higher at Rs 236 today. Stock of the new entrant in the industry IndiGo Paints gained 3.23% intraday to Rs 1052.50 on BSE today. Market cap of the firm rose to Rs 4,944.46 crore.

Chemical stocks

Shares of Deepak Nitrite surged 1.5% intraday to Rs 1966 against the previous close of Rs 1,935.65. The large cap stock opened higher at Rs 1949.95 today. Stock of another specialty chemical maker NOCIL gained 5% to Rs 190 in today’s trade. It opened higher at Rs 183.35 on BSE.

Similarly, Alkyl Amines stock climbed 1.43% intraday to Rs 1700 on BSE. It opened flat at Rs 1676.90 today. Balaji Amines stock rose 3.28% to Rs 1353.55 on BSE. Market cap of the firm rose to Rs 4313 crore.

Aarti Industries stock climbed 4.52% to Rs 412 against the previous close of Rs 401.95 on BSE.

Aviation stock

Shares of InterGlobe Aviation rose nearly 2% to Rs 4,776 today amid a fall in brent crude oil price. The stock opened higher at Rs 4,776.95 today.

Meanwhile, Nifty rose for the second straight session on Thursday after closing lower for ten straight sessions. Sensex rose 493 pts to 74,223 and Nifty gained 170 pts to 22,507 in the afternoon session today.

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Shares of state-run Bharat Electronics Ltd rose on Wednesday, March 5, after the company announced an interim dividend for the financial year 2024-25.

The stock was trading 3.32% higher at ₹273.49 apiece on the National Stock Exchange (NSE) at 2:00 pm.

BEL interim dividend announced: Check record date

In an exchange filing, BEL said its Board of Directors has declared an interim dividend of ₹1.50 per share of ₹1 each fully paid up for FY25. The dividend will be paid within 30 days from the date of declaration.

The record date for the payment of the BEL interim dividend on equity shares for the current fiscal year has been fixed as March 11, 2025.

Bharat Electronics Ltd is a public sector undertaking (PSU) under the Ministry of Defence.

The company reported a 47.33% increase in its consolidated Profit after tax (PAT) to ₹1,316.06 crores in the third quarter of the current fiscal year. The net profit was ₹893.3 crore in the year-ago quarter.

Consolidated revenue from operations climbed 38.6% to ₹5,770.69 crore, as against ₹4,162.16 crore in the same period of the previous financial year.

For the nine-month period ended December 2024, BEL recorded a turnover of ₹14,173.68 crore, compared to ₹11,484.92 crore a year ago. The post-tax profit advanced 42.3% to ₹3,183.47 crore in 9M FY25, as against ₹2,236.48 cr in the corresponding period last fiscal.

The order book of the company as of January 1, 2025, stood at ₹71,100 crore.

On February 20, the company received orders worth ₹1,292 crore, including ₹1,034 crore order for the supply of software-defined radios (SDR) and Data Communication Terminals (DCT) for the Indian Coast Guard.

On February 8, BEL secured orders worth ₹962 crore, including an Electro-Optic Fire Control System (EOFCS) supply order from the Indian Navy.

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