Pick of the Week: SBI Securities picks this Navratna PSU stock for up to 15% potential upside; check out details

Brokerage SBI Securities has chosen a Navratna PSU stock for its investors which can provide up to 16 per cent returns in long-term. This stock has provided 25 per cent return in one years and 169 per cent return in two years.

On Tuesday, the benchmark BSE Sensex regained 147 points in range-bound trading, snapping a five-day losing streak thanks to buying in banking and FMCG stocks. However, Nifty fell by 5.80 points or 0.03 per cent to finish at 22,547.55 due to fag-end selling in pharma, metal and IT shares.

Navratna PSU stock to buy 

SBI Securities has picked aerospace and defence electronics company Bharat Electronics Limited (BEL). The brokerage has given a target of Rs 297 per share for 12 months. 

Expected return

Shares of BEL last traded at Rs 256.4 each on Tuesday, February 25. This means the stock has a potential upside of up to 16 per cent from its today's closing price.

BEL business

Bengaluru-headquartered company BEL primarily manufactures advanced electronic products for ground and aerospace applications. BEL is one of sixteen PSUs under the administration of Ministry of Defence of India. The company also has a limited presence in the civilian market.

BEL 3QFY25 update

The PSU firm reported a strong revenue growth driven by healthy order book execution during third quarter of financial year 2025 that ended on 31 December 2024. BEL's EBITDA margin expanded 340 bps (YoY) to 29 per cent, driven by operating leverage. For FY25, the company has maintained its revenue guidance of over 15 per cent revenue growth, with an EBITDA margin between 23-25 per cent and an order inflow of Rs 25,000 crore.

Why should you buy BEL stock?

"The order pipeline for BEL remains strong with few large orders in advanced stage of finalisation and to be concluded in 4QFY25 including Ashwini Radar, Electronic Warfare for MI-17, Atulya radar and Shakti Phase IV. It also received multiple orders amounting to Rs 2,190 crore spread across maintenance of Akash Missile Systems, communication equipment, radars, seekers, jammers, test equipment, thermal imagers, fire, control systems, navigational systems for ships, communication equipment, spares, services. Current order book stands at Rs 71,100 crore as of 1 January 2025 – 3.5x FY24 sales," says brokerage.

The brokerage also says that there are some key risk factors involved. These include slowdown in order inflows, delay in large tender finalisation and increased competition.

The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.