http://www.bel-india.com
Annual Reports at: http://www.nseindia.com/marketinfo/comp
Shareholding pattern
Total shares issued: 8 crores (of face value Rs.10/- each).
1. Central Government of India/State Governments (Promoters): 75.86%
2. Insurance Companies: 2.65%
3. FIIs: 8.62%
Recent (moderate!) news updates
Performance highlights 2006-07
http://www.bel-india.com/?q=§ionid=
BEL ranks 58th among Top 100 defence firms worldwide
http://www.bel-india.com/?q=§ionid=
Salient points
Positives:
1. Highly cash rich company (Rs.312/- per share). It is also to be noted that the current market price: Rs.1105/-.
2. A great product range (with high entry barriers due to the way it is patronized by Ministry of Defence, India) - military communication, radars, naval systems, telecom & broadcast, electronic warfare, tank electronics, opto-electronics, professional electronic components and solar photovoltaic systems.
3. Currently, meets 80% of the electronic equipment of Government of India (a virtual monopolistic player).
4. One of the prime beneficiary of increased allocation to Defence budget.
5. A major beneficiary of the Offsets Policy (leading to strong positive export revenue).
6. Due to its consistent financial performance, Central Government of India conferred Navratna status to BEL (Check the website of" Dept of Public Enterprises for the complete methodology - http://dpe.nic.in - About DPE - DPE Guidelines - Navratna / Mini Ratna status of PSUs - Chapter IX - 13 - Annexures II and III). This allows BEL to have greater degrees of financial and operational autonomy (similar to NTPC, SAIL, and ONGC).
Negatives:
1. Generally, QoQ earnings numbers display a huge volatility. Q4 tends to be more brighter and the rest somewhat lacklustre. That's because the Company realizes its revenues from the Government towards the end of the financial year.
A little more information on 'Offsets'
Deals for purchase of aircrafts and defence equipments are very sizeable and can lead to substantial increase in imports for the purchasing country. A clause called an Offset Agreement is often inserted into such deals mandating that the aircraft manufacturer/defence equipment supplier will have to provide Offsets - i.e., source or invest locally a certain percentage of the deal size. These offsets are essentially foreign exchange inflows that may take the form of production facilities, training facilities, maintenance facilities and purchase of related or unrelated goods.
Indian Offset Policy
The Indian Offset Policy for defence procurement was introduced in June 2005. It mandates a 30% offset provisions for all the defence purchases from overseas vendors valued at more than USD 67 million (Rs.300 Crores).
The Indian Offset Policy requires foreign vendors to discharge their offset obligations by buying defence products from Indian companies, or by investing in local defence companies or by investing in Indian organizations engaged in research and development operating within geographical borders of India
P/E:14.6
DIVIDEND:18
DIVIDEND YEILD:1.57
BOOK VALUE:324
PRICE TO BOOK VALUE:3.5
RONW:31
ROE:24
ROCE:27
FAIR PRICE:1290
http://img135.imageshack.us/img135/3340
Current technical positioning
2. Has been beaten down to 1105 all the way from a high of 2170. A good amount of correction has already happened.
3. Great supports at: 1077, 951, and 810.
4. Currently trading well below its 200 dma. One need not hurry up to buy now. A good candidate to keep on the watch list, to initiate long positions (for a longer term) at its lower support levels
1 comment:
A very informative post for traders it is. To learn market movements timely is very important so that you can plan your trading strategy accordingly which can work in your favor .
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